Explore our New Companies Law Series Below: Simplified Joint Stock Companies versus Limited Liability Companies Under New Law One of the first steps that should be determined by investors and entrepreneurs when setting up a business is determining the right form of company from both the business and legal perspectives. The new Saudi Companies Law that became effective as of 19 January 2023 (Law) provides for five distinct forms of companies, namely general partnership, limited partnership, joint stock, simplified joint stock, and limited liability. This short article discusses the key differences between the simplified joint stock company (SJSC) and limited liability company (LLC) forms to help businesses understand the pros and cons of both forms, and provide a glimpse of

Explore our New Companies Law Series Below: Closure of Companies Under New Companies Law As companies are set up to carry out economic activities, they sometimes need to be closed down or terminated for a variety of reasons. Understanding the requirements, procedures, and processes for the closure of companies is important for several reasons.  Besides the direct interests of partners and shareholders, there may be other stakeholders whose interests, too, need to be duly protected before the closure of a company or its merger with another entity or division into several entities. The Saudi Arabian Companies Law promulgated vide Royal Decree No: (M\132) dated 01\02\1443 H. along with the Rules of its Implementation (Law), which became effective as of 19

Explore our New Companies Law Series Below: Responsibilities of Managers Under New Companies Law The powers and authorities of managers of companies assume greater importance and significance for a variety of reasons. As the assets of the company are placed at the disposal of managers, and they receive unhindered access to all information about the company, its short-term and long-term business plans, and financial and investment perspectives, their powers and authorities must be properly regulated. Managers and board members of LLCs and JSCs enter into contracts and agreements with third parties whose interests, too, must be protected. To gain a comprehensive understanding of the Saudi Arabian Companies Law, 1443 H. we have put together this downloadable guide, which duly covers

Explore our New Companies Law Series Below: Provisions for Debt Instruments & Financing Sukuk Under New Companies Law Corporations have traditionally been dependent on equity, debt, or a combination of the two to raise capital for the financing of projects. Over time, both the equity and debt markets have evolved, and there are now new concepts and products worldwide to be used by businesses. Both equity and debt require an appropriate regulatory regime to protect the interests of all involved in these transactions, like convertible bonds, redeemable share, and Financing Sukuk. With the enactment of the new Companies Law of 1443 H. (Law) in Saudi Arabia, new provisions have been implemented for debt instruments and Financing Sukuk in Saudi Arabia to help

Explore our New Companies Law Series Below: Provisions for Not-For-Profit Companies Under New Companies Law The Not-for-Profit sector in the Kingdom of Saudi Arabia has great economic potential and is poised for rapid growth. In line with Vision 2030, Saudi Arabia set up a National Center for Non-Profit Sector in 2019 with the objective of developing the Non-Profit sector and achieving greater impact in the social and economic arenas through different means. With the enactment of the new Companies Law of 1443 H. (Law) in Saudi Arabia, new provisions have been implemented for Not-for-Profit companies (NPC) in Saudi Arabia to help that the nature and objectives of NPCs are maintained through their existence and closure. In this downloadable PDF, we have created

Explore our New Companies Law Series Below: Provisions for Joint Stock Companies Under New Companies Law Introduction: The newly enacted Companies Law of 1443 H. (Law) in Saudi Arabia became effective on 16 January, 2023. The companies are required to change their constitutional documents (Articles of Association or Articles of Incorporation) in order to amend, change and remove the articles that are in conflict with the provisions in the Law and more importantly to do away with the restrictions that were mandated in the old law or avail of flexibility accorded by the Law. The part which has undergone an extensive and comprehensive revisions is  the ‘Joint Stock Companies’  Section which is quite understandable as JSCs needs to be more

Explore our New Companies Law Series Below: An Overview of Simplified Joint Stock Companies As of 19 January 2023, the new Saudi Arabian Companies Law introduced a new form of company, namely, the Simplified Joint Stock Company (SJSC). SJSCs have been designed to offer small and medium-sized enterprises (SMEs) greater flexibility to conduct their businesses while availing the benefits of a joint stock company form. SJSCs provide advantages similar to those provided by the law for limited liability companies and the benefits enjoyed by joint stock companies. To gain a comprehensive understanding of SJSCs in Saudi Arabia, AlGhazzawi & Partners has prepared a free PDF guide. This guide offers insights into the unique features of SJSCs and important features such

Explore our New Companies Law Series Below: New Foreign Investment Guidelines Under New Saudi Arabian Companies Law The Saudi Arabian Ministry of Investment regularly updates its investment guide covering conditions, criteria, and requirements for foreign investors to set up and conduct business activities in Saudi Arabia. This schedule highlights requirements in regard to minimum capital, minimum Saudi Shareholdings for undertaking certain activities, and special criteria and conditions for carrying out some forms of business. AlGhazzawi & Partners

Explore our New Companies Law Series Below: The new Companies Law of 1443 H. (Law) in Saudi Arabia became effective in January 2023, and companies are now required to change their constitutional documents (Articles of Association, Articles of Incorporation) accordingly. This note highlights changes in the Companies Law of 1443 H. concerning the set up and operation of professional companies (free professions) which were earlier governed under a separate Professional Companies Law of 1441 H. Besides the general provisions of the Companies Law that are applicable to companies engaged in practicing free provisions, and provisions related to the specific company form which the professional company may opt, there are specific conditions that govern professional companies. As the Professional Companies Law

Explore our New Companies Law Series Below: About Saudi Arabia’s New Companies Law The new Companies Law of 1443 H. (Law) in Saudi Arabia became effective last month and companies will be required to change their constitutional documents (Articles of Association, Articles of Incorporation). While the new law has placed proper safeguards to protect the interests of all stakeholders, at the same time, it has enabled businesses and industries to structure their entities in the manner that suits their needs.  The Law prescribes minimum requirements, yet it allows the partners and shareholders to adopt higher thresholds if they deem those percentages appropriate. Companies will be required to change their constitutional documents (Articles of Association, Articles of Incorporation) as several Articles in the