Article 45 of the Saudi Bankruptcy Law
المادة 45 من نظام الإفلاس · الفصل الرابع: إجراء إعادة التنظيم المالي: طلب افتتاح الإجراء
The debtor, owner, manager, officer, board member and auditor are exempted from the Companies Law provisions on a company's losses reaching a specified percentage, as the Implementing Regulations specify.
Official text (Arabic)
This article has not been amended since the law was issued.
يعفى المدين أو المالك أو المدير أو المسؤول أو عضو مجلس الإدارة أو مراجع الحسابات من تطبيق أحكام نظام الشركات فيما يخص بلوغ خسائر الشركة نسبة محددة في ذلك النظام، وفقاً لما تحدده اللائحة.
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 45 explained in plain English
This article addresses the relationship between the Bankruptcy Law and the Companies Law on one specific matter: the provisions concerning a company's losses reaching a specified percentage under the Companies Law.
Who is covered by the exemption? The article names six parties:
- The debtor.
- The owner.
- The manager.
- The officer.
- The board member.
- The auditor.
Scope of the exemption: It is limited to the provisions of the Companies Law regarding a company's losses reaching the percentage specified in that law, and by the text of this article it does not extend to other provisions of the Companies Law. The article does not state the amount of that percentage or what follows from reaching it, so the Companies Law itself must be consulted for that.
Reference to the Implementing Regulations: The exemption applies as the Implementing Regulations specify, so its details and rules are left to the Implementing Regulations and the article does not set them out.
The article appears among the provisions on requesting the opening of the financial reorganization procedure. Related provisions include Article 44, which provides for notifying the debtor of a request submitted by another and its right to object to it, and Article 46, which provides for a stay of claims for 180 days upon filing the request or opening the procedure.
Because applying this exemption depends on the Implementing Regulations and the provisions of the Companies Law, it is advisable to consult a lawyer specializing in bankruptcy and commercial cases before relying on it.
Practical example
A limited liability company in Riyadh reached a level of losses to which the Companies Law attaches certain provisions, and it was at the same time in the financial reorganization stage. Its manager wonders whether those provisions apply to him. Article 45 provides for exempting the manager and others from them as the Implementing Regulations specify, so he needs to review the Implementing Regulations to learn the rules of the exemption.
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 45 of the Saudi Bankruptcy Law
Does the Bankruptcy Law exempt from the Companies Law provisions on company losses?
Yes. The article exempts the debtor, owner, manager, officer, board member and auditor from the Companies Law provisions on a company's losses reaching a specified percentage, as the Implementing Regulations specify.
Does the exemption cover all provisions of the Companies Law?
No. The text is limited to the provisions on a company's losses reaching a specified percentage in the Companies Law.
Where do I find the details of the exemption?
The article refers to the Implementing Regulations to specify the provisions of the exemption.
More articles on Financial Reorganization
- Article 41
After a protective settlement ends, the court, on its own initiative or at an interested party's request, opens the appropriate bankruptcy procedure if three conditions are met together.
تقضي المحكمة -من تلقاء نفسها أو بناء على طلب ذي مصلحة- بافتتاح إجراء الإفلاس المناسب إذا تحققت الشروط الآتية: أ- أن يكون المدين متعثراً أو مفلساً. ب- استيفاء شر
- Article 42
The article states who may request the opening of financial reorganization and its three cases, and bars the request if the debtor underwent this procedure in the previous 12 months.
1- دون الإخلال بأحكام الأنظمة ذات العلاقة، للمدين أو الدائن أو الجهة المختصة التقدم إلى المحكمة بطلب افتتاح إجراء إعادة التنظيم المالي للمدين في أي من الحالات ا
- Article 43
A request to open the financial reorganization procedure is filed with the court after submission, accompanied by the relevant information and documents as the Implementing Regulations specify.
يقيد طلب افتتاح إجراء إعادة التنظيم المالي لدى المحكمة بعد تقديمه مرافقاً له المعلومات والوثائق ذات العلاقة، وفقاً لما تحدده اللائحة.
- Article 44
If someone other than the debtor submits a financial reorganization request, the court notifies the debtor within 5 days, and the debtor may object at the hearing in three cases.
إذا تقدم غير المدين بطلب افتتاح إجراء إعادة التنظيم المالي، فعلى المحكمة تبليغ المدين به خلال مدة لا تزيد على (خمسة) أيام من تاريخ تقديمه، وللمدين الاعتراض على
- Article 46Amended by M/89
Filing a financial reorganization request or opening the procedure stays claims for 180 days, extendable by up to 180 days, with cases for an early end.
1- يترتب على قيد طلب افتتاح إجراء إعادة التنظيم المالي أو افتتاحه، تعليق المطالبات لمدة (مائة وثمانين) يوماً، وللمحكمة من تلقاء نفسها، أو بناءً على طلب الأمين أ
- Article 47
The article governs opening financial reorganization: a hearing within 40 days of filing, a ruling to open, reject or adjourn for up to 21 days, and notice to an absent debtor.
1- يفتتح إجراء إعادة التنظيم المالي بناء على حكم المحكمة بموجب المادة (الحادية والأربعين) من النظام، أو بموجب الفقرة (2) من هذه المادة. 2- تحدد المحكمة موعداً ل
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.