In the name of Allah, the Most Gracious, the Most Merciful
Royal Decree No. (M/132) dated 1/12/1443 AH
By the grace of Allah the Exalted
Based on Article (Seventy) of the Basic Law of Governance, issued by Royal Order No. (A/90) dated 27/8/1412 AH.
Based on Article (Twenty) of the Council of Ministers Law, issued by Royal Order No. (A/13) dated 3/3/1414 AH.
Based on Article (Eighteen) of the Shura Council Law, issued by Royal Order No. (A/91) dated 27/8/1412 AH.
After reviewing Shura Council Decision No. (242/39) dated 14/11/1443 AH.
After reviewing Council of Ministers Decision No. (678) dated 29/11/1443 AH.We, Salman bin Abdulaziz Al Saud
King of the Kingdom of Saudi Arabia
Have decreed the following:
First:Approval of the Companies Law, in the attached form.
Second:Nothing in the law - referred to in item (First) of this decree - shall prejudice the provisions, jurisdictions, and authorities granted to the Saudi Central Bank and the Capital Market Authority pursuant to the relevant statutory provisions.
Third:Companies existing at the time of the law’s entry into force - referred to in item (First) of this decree - shall amend their status in accordance with its provisions within a period not exceeding (two years) starting from the date of its entry into force. Exceptionally, the Ministry of Commerce and the Capital Market Authority - each within its jurisdiction - shall determine the provisions therein that apply to those companies during that period.
Fourth:His Highness the Deputy Prime Minister, the Ministers, and the heads of the relevant independent bodies - each within their jurisdiction - shall implement this decree.
Salman bin Abdulaziz Al Saud
In the name of Allah, the Most Gracious, the Most Merciful
Council of Ministers Decision No. (678) dated 29/11/1443 AH
The Council of Ministers
Upon the correspondence received from the Royal Court No. 71964 dated 18/11/1443 AH, including the letter of His Excellency the Minister of Commerce No. 22315 dated 24/7/1442 AH, regarding the draft Companies Law.
After reviewingthe aforementioned draft law.
After reviewingtheCompanies Law, issued by Royal Decree No. (M/3) dated 28/1/1437 AH.
After reviewingtheProfessional Companies Law, issued by Royal Decree No. (M/17) dated 26/1/1441 AH.
After reviewingmemorandums No. (1721) dated 30/7/1443 AH, No. (2219) dated 27/9/1443 AH, and No. (2706) dated 28/11/1443 AH, prepared by the Bureau of Experts at the Council of Ministers.
After reviewingthe minutes prepared by the Council of Economic and Development Affairs No. (1099/43/M) dated 27/11/1443 AH.
After consideringShura Council Decision No. (242/39) dated 14/11/1443 AH.
After reviewingthe recommendation of the General Committee of the Council of Ministers No. (10464) dated 28/11/1443 AH.It is decided as follows:
First:Approval of the Companies Law, in the attached form.
Second:Nothing in the law - referred to in item (First) of this decision - shall prejudice the provisions, jurisdictions, and authorities granted to the Saudi Central Bank and the Capital Market Authority pursuant to the relevant statutory provisions.
Third:Companies existing at the time of the law’s entry into force - referred to in item (First) of this decision - shall amend their status in accordance with its provisions within a period not exceeding (two years) starting from the date of its entry into force. Exceptionally, the Ministry of Commerce and the Capital Market Authority - each within its jurisdiction - shall determine the provisions therein that apply to those companies during that period.
A draft Royal Decree has been prepared accordingly, its text attached hereto.
Fourth:The Ministry of Commerce and the Capital Market Authority shall coordinate with the Saudi Central Bank - as appropriate - when preparing the regulations referred to inArticle (Two Hundred and Seventy-Seven) of the law- referred to in item (First) of this decision -, in connection with the provisions related to its jurisdiction over financial institutions subject to its supervision and control. The Bank shall coordinate with the Ministry of Commerce and the Capital Market Authority - as appropriate - when preparing any regulation that has a direct impact on the application of the law’s provisions.
Fifth:The Ministry of Commerce shall coordinate with the National Center for Non-Profit Sector Development regarding the provisions related to non-profit companies within the Center’s jurisdiction over the non-profit sector.
Sixth:The financial fee referred to inArticle (Two Hundred and Seventy-Nine) of the law- referred to in item (First) of this decision - shall be determined in agreement with the Ministry of Finance and the Non-Oil Revenues Development Center, until the issuance and enforcement of the (Regulation on the Practice of Public Authorities and Institutions and Equivalent Entities Imposing Financial Fees for Services and Works They Provide).
Prime Minister
Companies Law and its Executive Regulations
Chapter 1: General Provisions
Preliminary Chapter
Article 1: Definitions
1. In this Law, the following words and phrases shall have the meanings assigned thereto, unless the context requires otherwise:
Kingdom: Kingdom of Saudi Arabia.
Law: Companies Law.
Regulations: Regulations issued for the implementation of the provisions of this Law.
Ministry: Ministry of Commerce.
Minister: Minister of Commerce.
CMA: Capital Market Authority.
Competent Authority: The Ministry, except for joint-stock companies listed in the capital market, where the Competent Authority is the CMA.
Relatives:
a) Parents and grandparents and their ascendants.
b) Children and grandchildren and their descendants.
c) Spouses.
Day: A calendar day, whether a business day or not.
2. Without prejudice to the provisions of this Law, the Regulations shall include the definitions of other words and phrases provided for in this Law.
Article 2: Definition of a Company
A company is a legal entity incorporated in accordance with the provisions of this Law pursuant to articles of incorporation or articles of association under which two or more persons undertake to participate in a for-profit enterprise by contributing property or work, or both, to share any profit realized or loss incurred from such enterprise. As an exception, a company may, under this Law, be incorporated by a single person, and a non-profit company may be incorporated pursuant to the provisions of Part 7 of this Law.
Article 3: Nationality of a Company
A company incorporated in accordance with the provisions of this Law shall have the Saudi nationality, and its headquarters shall be in the Kingdom.
Chapter 1: Establishment of the Company
Article 4: Forms of Companies
A company incorporated in accordance with the provisions of this Law shall take one of the following forms:
a) General partnership.
b) Limited partnership.
c) Joint-stock company.
d) Simplified joint-stock company.
e) Limited liability company.
Article 5: Name of a Company
1. A company shall have a tradename in Arabic or in any other language. The name may reflect the company’s purpose or may be a distinctive name or the name of one or more of the company’s current or former partners or shareholders, or a combination of the above. The name shall not be inconsistent with the Law of Tradenames and other laws and regulations applicable in the Kingdom.
2. If a company’s tradename includes the name of a former partner or shareholder, the consent of such partner or shareholder must be obtained. If said partner or shareholder dies without providing his approval, the consent of his heirs must be obtained.
3. The form of a company must be included in its tradename.
4. A company’s tradename may be amended in accordance with the conditions prescribed for amending articles of incorporation or articles of association. The amendment shall not affect the company’s rights or obligations nor the validity of legal measures taken by the company or against it prior to such amendment.
Article 6: Application for Incorporation
1. A person who participates in the incorporation of a company and contributes to its capital with cash or in-kind contributions shall be deemed an incorporator.
2. Incorporators shall file the company’s application for incorporation and registration with the Commercial Register, along with the articles of incorporation or articles of association and any required information and documents.
3. The Commercial Register shall decide on applications that include the required information and documents in accordance with the provisions of this Law.
4. If an application is rejected, the rejection must be reasoned; incorporators may appeal the decision before the Ministry within 60 days from the date of notification of the rejection decision.
5. If the appeal is rejected or if no decision is rendered within 30 days from the filing date, incorporators may appeal before the competent judicial authority