Article 4 of the Saudi Chambers of Commerce Law
المادة 4 من نظام الغرف التجارية · الفصل الأول: التشكيل والمهمات
The fourth article gives the Chamber legal personality and financial and administrative independence under the Ministry's supervision, allows it to own property, and bars it from engaging in commercial activities.
Official text (Arabic)
This article has not been amended since the law was issued.
1- تتمتع الغرفة بالشخصية الاعتبارية والاستقلال المالي والإداري، وتعمل تحت إشراف الوزارة، ويمثلها رئيس مجلس إدارتها أمام القضاء والغير، وله تفويض من يراه في هذا الشأن.
2- للغرفة حق التملك، ولا يجوز لها الاشتغال -بنفسها أو بالمشاركة مع غيرها- في الأنشطة التجارية.
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 4 explained in plain English
This article sets out the legal status of the chamber of commerce and the limits of what it may do.
Paragraph 1: Personality, independence and representation
- The Chamber has legal personality: it is an entity in its own right with rights and obligations, and can be a party to contracts and litigation.
- It has financial and administrative independence, while working under the supervision of the Ministry, that is, the Ministry of Commerce as defined in Article 1.
- It is represented by the chair of its board of directors before the courts and third parties, and he may delegate whomever he sees fit in this regard.
Paragraph 2: Ownership and the ban on trading
- The Chamber has the right to own property.
- It may not engage in commercial activities, either on its own or in partnership with others.
The reason for this ban is clear from Article 2, which describes the Chamber as a non-profit entity aiming to develop, represent and protect commercial activities; it would not make sense for the Chamber to compete with the businesses it represents. Article 3 also provides that the Chamber is established by decision of the Minister and may set up branches and offices by decision of its board of directors, and Article 5 follows to list the tasks the Chamber carries out in order to develop commercial activities.
Anyone wishing to contract with the Chamber or sue it knows from this article that the Chamber is represented by the chair of its board of directors or whomever he delegates. If you have a dispute with a chamber of commerce, it is appropriate to consult a lawyer specializing in commercial and company cases.
Practical example
A contracting company in Jeddah contracted with the chamber of commerce to maintain a building the Chamber owns, then a dispute arose over amounts due. In this dispute the Chamber is dealt with as an independent legal person, and it is represented before the courts by the chair of its board of directors or whomever he delegates.
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 4 of the Saudi Chambers of Commerce Law
Who represents the chamber of commerce before the courts?
The chair of its board of directors represents it before the courts and third parties, and he may delegate whomever he sees fit in this regard.
May a chamber of commerce carry on a commercial activity?
It may not engage in commercial activities, either on its own or in partnership with others.
Can a chamber of commerce own real estate?
Yes. The article provides that the Chamber has the right to own property.
Is the chamber of commerce independent of the Ministry of Commerce?
It has financial and administrative independence, but it works under the Ministry's supervision.
More articles on Establishing and Supervising a Chamber of Commerce
- Article 1
The first article sets the meanings of the key terms in the Chambers of Commerce Law, such as the Chamber, the Ministry, the member, the subscriber, the Federation of Chambers and commercial activities.
يقصد بالكلمات والعبارات الآتية -أينما وردت في هذا النظام- المعاني المبينة أمام كل منها، ما لم يقتضِ السياق غير ذلك: النظام: نظام الغرف التجارية. اللائحة: اللائح
- Article 2
The second article provides that the chamber of commerce is a non-profit entity aiming to develop, represent, protect and improve commercial activities within a specified geographic scope.
الغرفة كيان غير ربحي، يستهدف تنمية شتَّى الأنشطة التجارية على مستوى القطاعات التجارية، وتمثيلها لدى الوزارات والهيئات والمؤسسات العامة، والعمل على حمايتها وتطوي
- Article 3
The third article regulates establishing a chamber of commerce by decision of the Minister, with one chamber per administrative region, and the Chamber's right to set up branches and sub-offices.
1- تُنشأ الغرفة -بقرار من الوزير- ويكون في كل منطقة إدارية غرفة واحدة، ويُحدد القرار مقر الغرفة ونطاق اختصاصها المكاني. وللوزير -بناءً على معايير تصدر بقرار منه
- Article 61
Article 61 subjects the staff of the chambers of commerce and the Federation of Chambers to the Labor Law and the Social Insurance Law.
يخضع منسوبو الغرف واتحاد الغرف لأحكام نظام العمل ونظام التأمينات الاجتماعية.
- Article 62
In cases he sees fit, the Minister may appoint a representative to a chamber or the Federation to follow the implementation of laws; the representative attends meetings and sees minutes and accounts without a vote.
يجوز للوزير -في حالات يراها- أن يعين لدى الغرفة أو اتحاد الغرف مندوبًا تكون مهمته متابعة تنفيذ الأنظمة والقرارات ويكون له حق حضور اجتماعات الجمعية العمومية، واج
- Article 63
The Minister of Commerce or his or her delegate supervises the application of the provisions of the Chambers of Commerce Law.
يتولى الوزير أو من يفوضه الإشراف على تطبيق أحكام النظام.
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.