Simplified Joint Stock Companies According to the new Companies Law issued in 1443 H / 2022 AD

When the new Companies Law take effect and apply?

The new Companies Law was published in the Official Gazette (Umm Al-Qura Newspaper) No. 4940, dated 12/23/1443 AH corresponding to 07/22/2022 AD. This law shall be effective after 180 days from the date of its publication in the Official Gazette.

What is meant by simplified joint stock companies?

A company established by one or more persons and it does not require a minimum capital in its articles of association and has the possibility of issuing multiple types and classes of shares with varying rights, obligations and restrictions. its management shall be by one or more directors, a board of directors, or otherwise and it doesn’t require general assemblies. the shareholders exercise these competencies and determine who will carry out them. The quorum required for the validity of shareholders’ meetings and the issuance of decisions shall be determined in the company’s articles of association. It is one of the most modern types of companies in the world nowadays.

What are the advantages of simplified joint stock companies?

What is expected of simplified joint stock companies?

Can a sole proprietorship turn into a simple joint stock company?

Yes, it can very easily and without any consequences.

What are the most important positive effects that simplified joint stock companies will have?

What data should be available in simplified joint stock companies?

The articles of association of a simplified joint stock company must include particularly the following data:

The following shall be attached to the articles of association upon applying for the company’s establishment:

How to manage the simplified joint stock companies:

What are the responsibilities of the board of directors in simplified joint stock companies?

The provisions on liability of the board of directors of the shareholding company shall apply to the director or board of directors of a simple joint-stock company, as the case may be.

Are there new simplified joint stock companies consisting of one person?

Yes, a simple joint stock company can be established by one person. If the simplified joint stock company is established by one person, or if all of its shares are transferred to one person, the following shall result:

Is it permissible to impose restrictions on me on the disposal of shares?

Yes, it is permissible to:
Any disposal of shares in violation of these restrictions shall be null and void.

Can disputes be settled in simplified joint stock companies?

Yes, Except for the criminal acts, the company’s articles of association may provide for the settlement of disputes of whatever nature that may occur between shareholders or between the company and its director or any of its board members – as the case may be – by resorting to arbitration or other alternative means to settle the dispute.

What is the minimum capital for a simplified joint stock company?

The minimum capital of a simplified joint-stock company is only 20 thousand Saudi riyals.
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