On June 28, 2022, The Ministry of Commerce and the Capital Market Authority (CMA) announced the new corporate law (the ‘New Companies Law’). It came into force as of Thursday, Jan 19, 2023.
The New Law will replace the recently published Companies Law of 2015, as well as the Professional Companies Law of 2019 (collectively referred to as the ‘Old Companies Law’) and has been widely hailed as a catalyst in helping to develop the KSA economy and encourage foreign investment, in line with the Kingdom’s Vision 2030. The ministry and the authority confirmed the contribution of the new law in enabling companies to develop and expand, address challenges and keep abreast of the economic developments the Kingdom witnesses at all levels.
Among the provisions that businesses must implement as of the date the law takes effect are the following:
| S/N | Article No. | Subject-matter |
| 1 | Sections (1, 2) of Article 17 | Accounting Records and Financial Statements |
| 2 | Section (2) of Article 20 | Obligations of the Company’s Auditor |
| 3 | 26 | Duty of Care and Loyalty |
| 4 | 27 | Conflict of Interests, Competition and Asset Utilization |
| 5 | 31 | Decision Evaluation Rule |
| 6 | Section (5), Article (68) | Election of Members of Board of Directors |
| 7 | 69 | End of Board of Directors Term or Resignation of Members |
| 8 | 71 | Disclosure of Interest in Business and Contracts |
| 9 | 75 | Sale of Company’s assets |
| 10 | 80 | Board of Directors’ Meetings |
| 11 | 81 | Representation for Attendance of Meetings and Validity of Board of Directors’ Resolutions |
| 12 | 88 | Ordinary General Assembly Meeting |
| 13 | Article 90 | General and Special Assemblies |
| 14 | Article 91 | Call for an Assembly Meeting |
| 15 | 92 | Quorum for Holding an Ordinary General Assembly Meeting |
| 16 | 93 | Quorum for Holding an Extraordinary General Assembly Meeting |
| 17 | 94 | Effectiveness of Ordinary Assembly’s Resolution |
| 18 | 96 | General Assembly Meeting Agenda |
| 19 | Section (2), Article 112 | Shareholders’ Register |
| 20 | Article 122 | Providing Shareholders with Financial Statements and Uploading Them |
| 21 | Article 32 | Company’s Losses |
| 22 | Article 134 | Issuing a Resolution to Decrease Share Capital |
| 23 | Article 162 | Vacancy of Director’s Position |
| 24 | Article 164 | Removal of Director |
| 25 | Article 182 | Company’s Losses |
| 26 | Article 216 | Holding Company |
| 27 | Article 217 | Subsidiary |
| 28 | Article 218 | Owning Shares or Stocks in a Holding Company |
| 29 | Article 244 | Liquidation of Company |
| 30 | Article 248 | Resolution to Appoint a Liquidator |
| 31 | Article 254 | Insufficient Assets |
source: mc.gov.sa
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