Article 2 of the Saudi Implementing Regulations of the Bankruptcy Law
المادة 2 من اللائحة التنفيذية لنظام الإفلاس · الفصل الأول: أحكام عامة
This article of the Regulations specifies what is a regulated entity: health and education companies meeting the competent authority's criteria, and payment systems and their operators and service providers.
Official text after amendments (Arabic)
Compiled from the original text and every officially published amendment; the amendments are shown in full below for comparison.
1 - يعد ما يأتي كياناً منظَّماً:
أ - الشركات التي يكون نشاطها تقديم الخدمات والمنتجات الصحية وتنطبق عليها معايير الكيان المنظم التي تضعها الجهة المختصة.
ب - الشركات التي يكون نشاطها تقديم الخدمات والمواد التعليمية وتنطبق عليها معايير الكيان المنظم التي تضعها الجهة المختصة.
ج- نظم المدفوعات ومشغلوها ومقدمو خدماتها
2- تحدد الجهة المختصة الكيانات المنظمة في نطاق اختصاصها وفق معايير تضعها لذلك، بالتنسيق مع لجنة الإفلاس.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 2 explained in plain English
This article of the Implementing Regulations of the Bankruptcy Law specifies the bodies that are considered a "regulated entity." Paragraph 1 mentions three categories:
- Health companies: companies whose activity is providing health services and products, provided that they meet the criteria for a regulated entity set by the competent authority.
- Education companies: companies whose activity is providing educational services and materials, with the same condition: meeting the criteria for a regulated entity set by the competent authority.
- Payment systems: payment systems and their operators and service providers. This sub-paragraph (c) was added by Council of Ministers Resolution No. 171 dated 20/3/1443 AH.
Note that for the first two categories, merely carrying on a health or educational activity is not enough on the text; the company must meet the criteria for a regulated entity set by the competent authority.
The role of the competent authority: paragraph 2 provides that the competent authority determines the regulated entities within its jurisdiction, according to criteria it sets for that purpose, and in coordination with the Bankruptcy Committee. The article does not give details of these criteria, so refer to what each competent authority issues.
This article does not state the consequences that follow from being a regulated entity; it is limited to specifying who falls within this description. This matters to companies operating in these sectors and to their creditors in knowing whether the debtor falls within this category. Anyone dealing with a distressed health or education company or payment services provider would do well to consult a lawyer specializing in bankruptcy and commercial cases.
Practical example
A medical complex run by a company in Jeddah is facing financial difficulties. To know whether the company is a "regulated entity" under this article, it is not enough that its activity is health-related; consideration is given to whether it meets the criteria for a regulated entity set by the health-sector competent authority in coordination with the Bankruptcy Committee.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentCommercial & Corporate Law lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Commercial & Corporate Law lawyers
Lawyers who handle this kind of case
Ibrahim Al Salem Law Firm
Active contributor
Dr. Ali Al-Rubaie Law Office and Ittihad Al-Asr Legal Company
Frequently asked questions about Article 2 of the Saudi Implementing Regulations of the Bankruptcy Law
What is a regulated entity in the Implementing Regulations of the Bankruptcy Law?
It is health companies and education companies that meet the criteria for a regulated entity set by the competent authority, in addition to payment systems and their operators and service providers.
Is every health company a regulated entity?
No. The text requires that it meet the criteria for a regulated entity set by the competent authority.
Do payment companies fall among regulated entities?
Yes. Payment systems and their operators and service providers were added by Council of Ministers Resolution No. 171 dated 20/3/1443 AH.
Who determines regulated entities?
The competent authority determines them within its jurisdiction according to criteria it sets, in coordination with the Bankruptcy Committee.
Amendment history
Amendment — 20/3/1443 AH
Official amendment text (Arabic)
- إضافة فقرة فرعية إلى الفقرة (1) من هذه المادة وذلك بموجب قرار مجلس الوزراء رقم (171) وتاريخ 1443/3/20هـ، بالنص الآتي:
"ج- نظم المدفوعات ومشغلوها ومقدمو خدماتها".
Original text before the amendments (Arabic)
1 - يعد ما يأتي كياناً منظَّماً:
أ - الشركات التي يكون نشاطها تقديم الخدمات والمنتجات الصحية وتنطبق عليها معايير الكيان المنظم التي تضعها الجهة المختصة.
ب - الشركات التي يكون نشاطها تقديم الخدمات والمواد التعليمية وتنطبق عليها معايير الكيان المنظم التي تضعها الجهة المختصة.
2- تحدد الجهة المختصة الكيانات المنظمة في نطاق اختصاصها وفق معايير تضعها لذلك، بالتنسيق مع لجنة الإفلاس.
More articles on Definitions and Final Provisions
- Article 1
This article of the Regulations refers the meaning of its terms to Article 1 of the Bankruptcy Law, and defines three specific terms: bankruptcy procedure, information and documents, and rules for managing meetings.
1 - يكون للألفاظ والمصطلحات الواردة في هذه اللائحة المعاني المبينة أمام كل منها في المادة (الأولى) من نظام الإفلاس، الصادر بالمرسوم الملكي رقم (م/50) وتاريخ 28
- Article 15
The meeting management rules apply to any meeting of creditors or the creditors' committee held under the Bankruptcy Law or its Regulations, unless otherwise agreed.
تطبق قواعد إدارة الاجتماعات على أي اجتماع -للدائنين أو لجنة الدائنين- يُعقد بموجب أحكام النظام أو اللائحة، ما لم يتفق على غير ذلك.
- Article 95
Allows the transactions provided for in the Bankruptcy Law or its Implementing Regulations to be carried out electronically.
يجوز أن تجرى التعاملات المنصوص عليها في النظام أو اللائحة إلكترونيًّا.
- Article 96
Allows the private sector to be used in carrying out support services for applying the provisions of the Bankruptcy Law and its Implementing Regulations.
يجوز الاستعانة بالقطاع الخاص في تنفيذ الخدمات المساندة لتطبيق أحكام النظام واللائحة.
- Article 97
Specifies the bodies that issue the rules on cross-border bankruptcy, running meetings, procedures in bankruptcy cases, and fees of trustees and experts.
1 - يصدر الوزير -بالتنسيق مع وزير العدل- القواعد المنظمة لإجراءات الإفلاس العابرة للحدود. 2- يصدر الوزير قواعد إدارة الاجتماعات. 3- يصدر وزير العدل بالاتفاق مع
- Article 98
Provides for publishing the Regulations and the rules issued under them in the Official Gazette, with each taking effect from the date of its publication.
تنشر اللائحة والقواعد التي تصدر بموجبها في الجريدة الرسمية، ويعمل بها من تاريخ نشر كل منها.
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.