Saudi Arabia’s Corporate Law (Company Law)

by | Mar 1, 2019 | Corporate Law | 0 comments

March 1, 2019

If you are planning to start any type of company in Saudi Arabia, you need to understand corporate law (Company law). Understanding such laws allows you to avoid going against the law which could lead to legal issues. In the recent past, there have been several adjustments to Saudi Arabia’s corporate law (Company Law) to attract foreign investment.

Various amendments were made to the laws governing the operations of Limited Liability Companies (LLC) in Saudi Arabia. For instance, the number of shareholders allowed to form a limited liability company is Saudi Arabia can be one. An individual can establish an LLC alone but is not supposed to be the only shareholder in another single limited liability company. This law implies merely that you can only be an individual shareholder of one single LLC only.

In case the number of shareholders in a limited liability company exceeds 50, it is supposed to be converted to a joint stock company. In fact, there are more than 50 shareholders, and an LLC has not yet converted to a joint stock company, the LLC is deemed dissolved according to the law. An exception to that rule only applies when the number of shareholders increases as a result of inheritance. The provisions of a will can also lead to a different scenario if the number of shareholders exceeds 50.

Another important corporate law in Saudi Arabia that you should understand is the number of shareholders in a joint stock company (JSC). The least number of shareholders in a JSC is two. However, government-related entities can establish a single shareholder company. Also, a sole shareholder joint stock company may exist in Saudi Arabia if the share capital is more than SAR 5 million. It is worth noting that the least share capital for a JSC is SAR 500,000 which was initially SAR 2 million.

Need advice regarding Company Law in Saudi Arabia.
Visit Nasreen Alissa Law Firm

Related Posts