Wednesday 17, May 2017 by Georgina Enzer

New Saudi Arabia Companies Law

In May 2016, Saudi Arabia’s new Companies Law was enacted, providing Saudi based companies with 12 months to bring their affairs into compliance with the new law.

In May 2016, Saudi Arabia’s new Companies Law was enacted, providing Saudi based companies with 12 months to bring their affairs into compliance with the new law.

If you have not already done so, you should aim to update your companies constitutional documents as soon as possible, so as to avoid any potential penalties or other related issues going forward, according to a statement by Al Tamimi & Co.

MoCI has published template AoA and bylaws for the different forms of entity including LLCs and joint stock companies (“JSCs”). MOCI have told us that it is mandatory for a company to have constitutional documents in this format.

The new templates AoA for LLCs reflect, for example, the following changes under the new law:

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Financial statements to be prepared within three months of year end and filed within a further one month (previously four months and two months);

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Suspension of set aside of statutory reserve when it reaches 30 per cent of capital (previously 50 per cent);

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Changes to statutory pre-emption process including added flexibility on valuation

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New procedures and effects where losses reach 50 per cent of capital.

 

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