Article 46 of the Saudi Implementing Regulations of the Bankruptcy Law
المادة 46 من اللائحة التنفيذية لنظام الإفلاس · الفصل الرابع: إجراء إعادة التنظيم المالي
This article of the Regulations sets the quorum of the owners' meeting and the majority for their approval of the proposal, the creditors' vote, the filing of the result, and what the trustee does if the creditors' vote is impossible.
Official text (Arabic)
This article has not been amended since the law was issued.
1 - لا ينعقد اجتماع الملاك إلا بحضور ملاك يمثلون ربع رأس مال الشركة على الأقل، ويصدر قرار الملاك بالموافقة على المقترح بأغلبية ثلثي الأسهم أو الحصص المصوتة، ما لم ينص عقد تأسيس الشركة أو نظامها الأساس على غير ذلك.
2- يصوت الدائنون على المقترح في الموعد المحدد، وإن صوَّت الملاك برفضه أو تعذر تصويتهم عليه.
3- يودع الأمين نتيجة التصويت على المقترح لدى المحكمة، ويطلب التصديق عليه أو إنهاء إجراء إعادة التنظيم المالي.
4- في حال تعذر تصويت الدائنين على المقترح؛ على الأمين التقدم إلى المحكمة بطلب النظر في تحديد موعد آخر للتصويت أو إنهاء الإجراء, وأن يرفق بطلبه المعلومات والوثائق المحددة لذلك.
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 46 explained in plain English
This article of the Implementing Regulations of the Bankruptcy Law regulates voting on the proposal in the financial restructuring procedure, on the part of the owners and on the part of the creditors:
1- The owners' vote:
- The owners' meeting is not quorate unless owners representing at least a quarter of the company's capital attend.
- Their decision approving the proposal is made by a majority of two thirds of the shares or quotas voting.
- This applies unless the company's articles of association or bylaws provide otherwise.
2- The creditors' vote: the creditors vote on the proposal on the specified date, even if the owners voted to reject it or were unable to vote on it. The owners' rejection does not stop the creditors' vote.
3- Filing the result: the trustee files the result of the vote with the court and requests either approval of the proposal or termination of the financial restructuring procedure.
4- Creditors' vote impossible: if the creditors' vote is impossible, the trustee must ask the court to consider setting another date for the vote or terminating the procedure, attaching the information and documents specified for this purpose.
This article follows Article 45, which obliges the debtor to notify the affected creditors and owners of the voting date, and is followed by Article 47 on the debtor's periodic reports on implementation of the plan. An owner or creditor who wants to assess the effect of their vote may consult a lawyer specialized in bankruptcy and commercial cases.
Practical example
A limited liability company in Riyadh is in the financial restructuring procedure, and its articles of association do not state a special quorum. Owners representing 30% of the capital attended the owners' meeting, so it was quorate, but the proposal did not obtain two thirds of the quotas voting. Even so, the creditors voted on the specified date, and the trustee then filed the result with the court and requested approval or termination of the procedure.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 46 of the Saudi Implementing Regulations of the Bankruptcy Law
What is the quorum of the owners' meeting in financial restructuring?
Attendance of owners representing at least a quarter of the company's capital, unless the articles of association or bylaws provide otherwise.
What majority is needed for the owners to approve the proposal?
Two thirds of the shares or quotas voting, unless the articles of association or bylaws provide otherwise.
Do creditors vote if the owners reject the proposal?
Yes. The creditors vote on the specified date even if the owners voted to reject it or were unable to vote.
What happens if the creditors' vote is impossible?
The trustee asks the court to consider setting another date for the vote or terminating the procedure.
More articles on Financial Reorganization
- Article 16
This article of the Regulations specifies the details the proposal must include, as the case may be, such as the debtor's financial position, assets and debts, the proposed settlement, classification of creditors and the plan's timetable.
يجب أن يتضمن المقترح -بحسب الأحوال- ما يأتي: أ - معلومات عن المدين ونشاطه. ب- بيان الوضع المالي للمدين وتأثيرات الوضع الاقتصادي عليه. ج - تحديد أصول المدين وتقد
- Article 17
The meeting management rules apply to managing the vote on the proposal, the debtor or trustee prepares minutes of the voting meeting with specified details, then deposits the voting result with the court.
1- تسري قواعد إدارة الاجتماعات على إدارة عملية التصويت على المقترح. 2- يعد المدين أو الأمين -بحسب الإجراء- محضراً لاجتماع الدائنين للتصويت على المقترح، يقيد فيه
- Article 31
This article of the Regulations sets the cases in which the court agrees to put a proposal to amend the plan to creditors and owners for a vote, and allows a stay of claims.
1 - توافق المحكمة -بناءً على طلب المدين أو الأمين بحسب الإجراء- على تقديم مقترح لتعديل الخطة للدائنين والملاك وتحدد موعداً للتصويت عليه، وذلك في أي من الحالات ا
- Article 42
This article exempts the debtor, its owners, managers and auditor from the Companies Law provisions on reaching the specified loss level if the financial reorganization request is registered in time.
يعفى المدين أو المالك أو المدير أو المسؤول أو عضو مجلس الإدارة أو مراجع الحسابات, من تطبيق أحكام نظام الشركات فيما يخص بلوغ خسائر المدين النسبة المحددة في نظام
- Article 43
This article of the Regulations allows a person who owns assets in the debtor's possession or held by the debtor to ask the court to recover them, with the specified information and documents.
يقدم من يملك أصولاً تقع في حيازة المدين أو محجوزة لديه، طلباً إلى المحكمة لاستردادها، مرافقة له المعلومات والوثائق المحددة لذلك.
- Article 44
This article requires the trustee to allow a creditor to inspect the list of claims approved by the court.
على الأمين تمكين الدائن من الاطلاع على قائمة المطالبات التي تعتمدها المحكمة.
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.