Article 179 of the Saudi Bankruptcy Law
المادة 179 من نظام الإفلاس · الفصل التاسع: إجراء التصفية الإدارية: إنهاء إجراء التصفية الإدارية
The article regulates ending administrative liquidation by a Bankruptcy Committee decision within 12 months with a possible 90-day extension, dissolving a legal-entity debtor, and removing its name from the bankruptcy register after 30 days.
Official text (Arabic)
This article has not been amended since the law was issued.
1- تصدر لجنة الإفلاس قراراً بإنهاء إجراء التصفية الإدارية بعد اكتمال بيع أصول التفليسة -إن وجدت- وانتهاء الدعاوى التي يكون المدين طرفاً فيها، وذلك خلال (اثني عشر) شهراً من تاريخ افتتاح الإجراء. واستثناء من ذلك، للجنة الإفلاس أن تمدد إجراء التصفية الإدارية لمدة إضافية لا تزيد على (تسعين) يوماً إذا دعت حاجة لذلك.
2- يعد الإجراء منتهياً بإيداع لجنة الإفلاس لقرارها بإنهائه لدى المحكمة مرافقاً له الحسابات الختامية والتقرير النهائي للإجراء وما تحدده اللائحة.
3- يترتب على إنهاء الإجراء حل المدين إذا كان شخصاً ذا صفة اعتبارية.
4- تودع لجنة الإفلاس في سجل الإفلاس والسجل التجاري ما يفيد إنهاء الإجراء، وفقاً لما تحدده اللائحة.
5- يزال اسم المدين من سجل الإفلاس بعد مضي (ثلاثين) يوماً من تاريخ إيداع ما يفيد إنهاء الإجراء في سجل الإفلاس والسجل التجاري، ويشطب قيد المدين في السجل التجاري إن وجد.
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 179 explained in plain English
This article explains how and when administrative liquidation ends and what follows from its ending.
1- The decision to end: the Bankruptcy Committee issues a decision to end the procedure after:
- the sale of the estate's assets, if any, is complete.
- the lawsuits to which the debtor is a party have ended.
This is within 12 months of the date of opening. As an exception, the committee may extend the procedure for an additional period of no more than 90 days if needed.
2- The moment of ending: the procedure is considered ended on the committee's filing its decision with the court, accompanied by the final accounts, the final report and what the Implementing Regulations specify.
3- Dissolution of a legal-entity debtor: the ending results in the dissolution of the debtor if it is a legal person, such as a company.
4- Registration in the registers: the committee files in the bankruptcy register and the commercial register a record that the procedure has ended, as specified by the Implementing Regulations.
5- Removal of the name: the debtor's name is removed from the bankruptcy register after 30 days from the date a record of the ending is filed in both registers, and its entry in the commercial register is struck off, if there is one.
Article 180 provides that the Implementing Regulations specify the procedures to follow if it appears during administrative liquidation that the sale proceeds are enough for the expenses of liquidation or liquidation for small debtors. To learn the effect of the ending on your position, it is advisable to consult a lawyer specialized in bankruptcy and commercial matters.
Practical example
A small company in Jeddah had its administrative liquidation opened, and 13 months after opening, after the Bankruptcy Committee had extended the procedure to await a ruling in a lawsuit, the sale was complete and the lawsuit ended. The committee issued the decision to end and filed it with the court with the final accounts, so the company was dissolved, and 30 days after filing a record of the ending in both registers its name was removed from the bankruptcy register and its commercial entry was struck off.
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 179 of the Saudi Bankruptcy Law
How long does administrative liquidation last?
The Bankruptcy Committee issues the decision to end within 12 months of opening, and may extend for an additional period of no more than 90 days if needed.
When is the administrative liquidation procedure considered ended?
When the Bankruptcy Committee files its decision to end it with the court, accompanied by the final accounts, the final report and what the Implementing Regulations specify.
When is the debtor's name removed from the bankruptcy register?
After 30 days from the date a record of ending the procedure is filed in the bankruptcy register and the commercial register.
What happens to the company after administrative liquidation?
Ending the procedure results in the dissolution of the debtor if it is a legal person, and its entry in the commercial register is struck off, if there is one.
More articles on Administrative Liquidation
- Article 90
The court opens liquidation or administrative liquidation after financial restructuring ends if the debtor is distressed or bankrupt, the procedure's conditions are met, and the ending was for specified grounds.
تقضي المحكمة -من تلقاء نفسها أو بناء على طلب من ذي مصلحة- بافتتاح إجراء التصفية أو التصفية الإدارية إذا تحققت الشروط الآتية: أ - أن يكون المدين متعثراً أو مفلسا
- Article 122
The article sets out two cases in which the court ends the liquidation procedure at the trustee's request, allows it without a hearing, and provides for dissolving a debtor with legal personality.
1- تقضي المحكمة بإنهاء إجراء التصفية في الحالتين الآتيتين: أ- إذا تقدم الأمين بطلب إنهاء الإجراء لعدم كفاية حصيلة بيع أصول التفليسة للوفاء بمصروفات إجراء التصفي
- Article 123
The article requires the court to open administrative liquidation and refer the papers to the Bankruptcy Committee if it ended the liquidation because the sale proceeds were insufficient for its expenses.
تقضي المحكمة بافتتاح إجراء التصفية الإدارية للمدين إذا قضت بإنهاء الإجراء بموجب الفقرة (1/أ) من المادة (الثانية والعشرين بعد المائة) من النظام، وتحيل أوراق الدع
- Article 158
The article lets the court, of its own motion or at an interested party's request, open liquidation for small debtors or administrative liquidation after reorganization ends, on three conditions.
تقضي المحكمة -من تلقاء نفسها أو بناء على طلب ذي مصلحة - بافتتاح إجراء التصفية لصغار المدينين أو التصفية الإدارية إذا تحققت الشروط الآتية: أ- أن يكون المدين الصغ
- Article 164
The article requires the trustee to ask the court to end liquidation for small debtors as soon as it learns that proceeds from selling the estate's assets will not cover the procedure's expenses.
يلتزم الأمين بتقديم طلب إلى المحكمة لإنهاء إجراء التصفية لصغار المدينين فور علمه بعدم كفاية حصيلة بيع أصول التفليسة للوفاء بمصروفات إجراء التصفية لصغار المدينين
- Article 167
The article states that administrative liquidation aims to sell bankruptcy estate assets whose sale is not expected to produce proceeds enough for the expenses of liquidation or small debtor liquidation.
يهدف إجراء التصفية الإدارية إلى بيع أصول التفليسة التي لا يتوقع أن ينتج عن بيعها حصيلة تكفي للوفاء بمصروفات إجراء التصفية أو إجراء التصفية لصغار المدينين.
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.