The Responsibilities of Board Members in Joint Stock Companies: A Comprehensive Guide

Joint stock companies are a type of corporation that consists of a number of individuals who contribute to a specified capital divided into shares. These shareholders bear the losses of the company in proportion to their contribution. Joint stock companies are among the most common corporate forms in Saudi Arabia due to numerous advantages such as:
According to the new Company Law, the issued capital of a joint stock company should not be less than five hundred thousand Saudi riyals, with at least a quarter paid up upon incorporation. The issued capital of a joint stock company represents the subscribed shares.

Key Responsibilities of Board Members in Joint Stock Companies

The new Company Law places certain responsibilities on the shoulders of the company director and board members:

Guidelines for Termination or Resignation of Board Members

In the event of an inability to elect a new board and the current board’s term has ended, the members will continue their duties until a new board is elected, provided that this period does not exceed ninety days from the end of their term. The board must take the necessary steps to elect a replacement before the end of this period.
If the chairman and board members resign, they must call an ordinary general assembly to elect a new board. The resignation will not take effect until a new board is elected, provided that the duration of the resigning board’s continuation does not exceed one hundred and twenty days from the date of resignation.
In conclusion, the new Company Law determines the responsibility of partners in different companies in line with each company’s nature and the rights and duties of partners therein. This law aims to protect the legitimate interests of partners and third parties and enhance confidence in the Kingdom’s investment environment. Partners must respect the provisions of this law and assume responsibility for any violations or negligence in performing their duties.

ونود ان نشير الي بعض الاستثناءات التي اضافها النظام الجديد للمسوؤولية التقصرية وهما :

إذن في النهاية ، يمكننا ملاحظة أن هناك فروق جوهرية بين انواع المسؤولية في نظام المعاملات المدنية الجديد، سواء من حيث مصادرها أو شروطها أو أغراضها. وتشكل هذه الفروق تحديات قانونية وممارسات قضائية جديدة .
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