Signs of Economic Recession / Is It Time To Apply The Law Of Preventative Settlement from bankruptcy?
Thus, the application of the law of preventive settlement from bankruptcy established by Royal Decree No. meem/16 dated 04/09/1416 A.H. appears to be a solution that may assist investors and businessmen to maintain the stability of their businesses.
Looking into the text of this law, we find that the First Article thereof states that: “Every, merchant, individual or corporate, whose financial conditions have worsened to a degree presaging the failure to pay debts, may petition for amicable settlement with creditors to the committees to be formed for this purpose with the Chambers of Commerce and Industry, in accordance with the rules and procedures prescribed in the Executive Regulations”.
Those judicial receivers to be appointed by the Court may be chartered accountants, lawyers or legal counselors and experts in the relevant laws.
Additionally, the Saudi Arabian Monetary Agency (SAMA) has issued several controls and conditions for the opening of banking settlement accounts including, but not limited to the following:
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