Article 18 of the Saudi Civil Transactions Law
المادة 18 من نظام المعاملات المدنية · الفرع الثاني: الشخص ذو الصفة الاعتبارية
The article provides that a juridical person enjoys all rights except those inherent in a human being, and has an independent financial liability, capacity, the right to sue, a domicile and a nationality, and must have someone who represents it.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يتمتع الشخص ذو الصفة الاعتبارية بجميع الحقوق إلا ما كان منها ملازمًا لخصائص الشخص ذي الصفة الطبيعية، وذلك في الحدود المقررة بموجب النصوص النظامية.
2- يكون للشخص ذي الصفة الاعتبارية:
أ- ذمةٌ ماليةٌ مستقلة.
ب- أهليةٌ في الحدود التي يعينها سند إنشائه أو التي تقررها النصوص النظامية.
ج- حق التقاضي.
د- موطنٌ مستقلٌ، وهو المكان الذي يوجد فيه مركز إدارته الرئيس. ويجوز اعتبار المكان الذي يوجد فيه أحد فروع الشخص ذي الصفة الاعتبارية موطنًا له، وذلك فيما يتعلق بنشاط هذا الفرع.
هـ- جنسيةٌ وفقًا لما تقرره النصوص النظامية.
3- يجب أن يكون للشخص ذي الصفة الاعتبارية من يمثله ويعبر عن إرادته.
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 18 explained in plain English
This article explains what follows from the entities listed in Article 17 having juridical personality.
First: rights: A person with juridical personality enjoys all rights, except those inherent in the characteristics of a human being, within the limits set by the legal provisions.
Second: what it has under paragraph 2:
- An independent financial liability separate from the liabilities of the persons who make it up.
- Capacity within the limits set by the instrument establishing it or by the legal provisions.
- The right to sue.
- An independent domicile, which is the place of its main center of management. The place of one of its branches may be considered its domicile in relation to the activity of that branch.
- A nationality in accordance with what the legal provisions set.
Third: representation: Paragraph 3 requires that a person with juridical personality have someone who represents it and expresses its will. The article did not specify who this representative is, so that is determined by the establishing instrument and the legal provisions governing each entity.
The practical effect: A person dealing with a company or association is dealing with an independent entity that has its own financial liability and domicile, and in matters relating to the activity of a particular branch, the branch's location may be considered its domicile. To determine the rights of a juridical entity or its representative in a particular case, it is advisable to consult a lawyer who specializes in companies and commercial cases.
Practical example
A company has its main center of management in Riyadh and a branch in Jeddah. A customer contracted with the Jeddah branch for a service the branch provides. Jeddah may be considered the company's domicile in relation to this branch's activity, while its original domicile remains Riyadh, where its main center of management is. The company has a financial liability independent of the partners' liabilities.
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 18 of the Saudi Civil Transactions Law
Does a company have an independent financial liability?
Yes. The article provides that a person with juridical personality has an independent financial liability.
What is the domicile of a company or juridical person?
Its domicile is the place of its main center of management, and the place of one of its branches may be considered its domicile in relation to that branch's activity.
May a juridical person bring claims?
Yes. Among the rights the article sets for a person with juridical personality is the right to sue.
Does a juridical person enjoy all of a human being's rights?
It enjoys all rights except those inherent in the characteristics of a natural person, within the limits set by the legal provisions.
More articles on Capacity and General Provisions
- Article 1
The Article sets the order of what applies to civil matters: the Law's provisions, then the general rules in the final provisions, then the most suitable rulings of Sharia, without prejudice to special statutory provisions.
1- تُطبق نصوص هذا النظام على جميع المسائل التي تناولتها في لفظها أو في فحواها، فإن لم يوجد نص يمكن تطبيقه طُبقت القواعد الكلية الواردة في الأحكام الختامية، فإن
- Article 2
The Article provides that all periods and time limits in the Civil Transactions Law are calculated by the Hijri calendar.
تحسب المدد والمواعيد الواردة في هذا النظام بالتقويم الهجري.
- Article 3
The Article provides that a person's legal personality begins with complete live birth and ends with death, and that the rights of an unborn child in the womb are determined by statutory provisions.
1- تبدأ شخصية الإنسان بتمام ولادته حيًّا وتنتهي بموته. 2- حقوق الحمل المستكن تحددها النصوص النظامية.
- Article 4
The Article refers the rules on the missing person, the absent person and the person of unknown parentage to the statutory provisions specific to them rather than regulating them in the Civil Transactions Law.
تسري على المفقود والغائب ومجهول النسب النصوص النظامية الخاصة بهم.
- Article 5
The Article refers the rules on persons' names, titles, families, kinship and nationalities to the statutory provisions specific to them.
تسري على أسماء الأشخاص وألقابهم وأسرهم وقراباتهم وجنسياتهم النصوص النظامية الخاصة بها.
- Article 6
The article defines direct kinship as the link between ascendants and descendants, and indirect kinship as the bond between persons who share a common ancestor without one being a descendant of the other.
1- القرابة المباشرة هي الصلة بين الأصول والفروع. 2- القرابة غير المباشرة هي الرابطة بين أشخاصٍ يجمعهم أصلٌ مشتركٌ دون أن يكون أحدهم فرعًا للآخر.
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.