Amendments to the Saudi Arabian commercial register systems
On the 25/07/1439Hijri corresponds to 10/04/2018, royal decree no (M/80) was issued, which dictates that some of the current commercial register systems are to be modified
The amendments obligate the merchant to register his name in the commercial register located in the area of his commercial place, whether it is a head office, a branch or an agency.
Recent amendments also obliged companies of any kind to register their branch with the Commercial Records Department within a maximum period of thirty days from the date of starting the activity.
Stated that merchants who are dependent on former municipal licenses must open their shops without issuing a commercial record and only a municipal license to engage in commercial activity.
Where the system came to oblige companies that carry or are located in cities or regions outside their headquarters to issue a sub-register for their facility.
According to previous, the Council of Ministers decided to approve the amendments of both articles the (2nd) and the (3rd) of the Commercial Registry System, where the amendment of Article (2nd) to read as follows: “Every merchant must submit an application to register his name in the Commercial Registry in his jurisdiction. His commercial store, whether it is a head office, a branch, or an agency.”
And the amendment of Article (3rd) of the system came as follows: –
- Companies incorporated in the Kingdom are registered in the Commercial Register as specified by the Executive Regulations.
- An application must be submitted to register any branch of the company within (30) days from the date of its establishment, and a copy of the company’s articles of incorporation and articles of association, if any, must be attached to the application.
We believe that the most recent remarkable amendments in the articles of the commercial registry system are very important, and that account these amendments are the source of the obligation and the legal basis that obligated each merchant to apply for his name to be entered in the registered commercial system that belongs to his area at which the commercial store is located and prohibited the merchants who previously relied on municipal licenses to open their stores without issuing a commercial register for it.
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