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The New Companies Law comes into force In The Kingdom Of Saudi Arabia

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 
1Sections (1, 2) of Article 17Accounting Records and Financial Statements
2Section (2) of Article 20Obligations of the Company’s Auditor
326Duty of Care and Loyalty
427Conflict of Interests, Competition and Asset Utilization
531Decision Evaluation Rule
6Section (5), Article (68)Election of Members of Board of Directors
769End of Board of Directors Term or Resignation of Members
871Disclosure of Interest in Business and Contracts
975Sale of Company’s assets
1080Board of Directors’ Meetings
1181Representation for Attendance of Meetings and Validity of Board of Directors’ Resolutions
1288Ordinary General Assembly Meeting
13Article 90General and Special Assemblies
14Article 91Call for an Assembly Meeting
1592Quorum for Holding an Ordinary General Assembly Meeting
1693Quorum for Holding an Extraordinary General Assembly Meeting
1794Effectiveness of Ordinary Assembly’s Resolution
1896General Assembly Meeting Agenda
19Section (2), Article 112Shareholders’ Register
20Article 122Providing Shareholders with Financial Statements and Uploading Them
21Article 32Company’s Losses
22Article 134Issuing a Resolution to Decrease Share Capital
23Article 162Vacancy of Director’s Position
24Article 164Removal of Director
25Article 182Company’s Losses
26Article 216Holding Company
27Article 217Subsidiary
28Article 218Owning Shares or Stocks in a Holding Company
29Article 244Liquidation of Company
30Article 248Resolution to Appoint a Liquidator
31Article 254Insufficient Assets



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