Article 545 of the Saudi Civil Transactions Law
المادة 545 من نظام المعاملات المدنية · الفرع الثالث: انتهاء عقد الشركة
A partner may withdraw from a partnership of unspecified duration with prior written notice and without fraud or unsuitable timing, but from a fixed-term partnership he can leave only if the court removes him, with compensation.
Official text (Arabic)
This article has not been amended since the law was issued.
1- إذا كانت مدة الشركة غير معينة جاز للشريك أن ينسحب منها في أي وقت على أن يعلم جميع الشركاء -كتابة- بإرادته الانسحاب قبل حصوله بمدة معقولة، وألا يكون انسحابه عن غش أو في وقت غير مناسب.
2- إذا كانت مدة الشركة معينة؛ فليس للشريك أن ينسحب منها قبل انقضاء المدة، وللمحكمة إخراجه منها إذا طلب ذلك وتقدم بأسباب مقبولة، على أن يعوض الشركاء عن أي ضرر يلحقهم بسبب ذلك.
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 545 explained in plain English
This article regulates a partner's withdrawal from the partnership, and distinguishes between two cases according to the partnership's term.
The first case: a partnership of unspecified duration. A partner may withdraw from it at any time, provided that:
- He notifies all the partners in writing of his intention to withdraw.
- The notice is given a reasonable period before the withdrawal.
- His withdrawal is not in fraud.
- It is not at an unsuitable time.
The article does not specify the length of the reasonable period, so it is considered according to the circumstances of each partnership.
The second case: a fixed-term partnership. A partner may not withdraw before the term expires. But the court may remove him from it if he asks for that and presents acceptable reasons, provided he compensates the partners for any harm they suffer because of his leaving.
The article is linked to Article 544, which makes the partners' continuing to work after the term expires a renewal to which the rules of a partnership of unspecified duration apply, so the rule of the first case applies to it. Article 546 deals with removing a partner on the basis of the partners' agreement or at another partner's request.
Before deciding to withdraw, it is advisable to review the partnership contract and consult a lawyer specializing in company matters.
Practical example
Majed joined a civil partnership of unspecified duration for car rental in Riyadh, and then wanted to devote himself to other work. He may withdraw after sending each of his partners a written notice a reasonable period before his withdrawal, and so long as he does not choose an unsuitable time such as the peak of the holiday season. Had the partnership been fixed at five years, he could not withdraw before it ended except by asking the court to remove him for acceptable reasons, with compensation to his partners for their harm.
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 545 of the Saudi Civil Transactions Law
May a partner withdraw from the partnership at any time?
Yes, if the partnership is of unspecified duration, provided he notifies all the partners in writing a reasonable period before withdrawing, and the withdrawal is not in fraud or at an unsuitable time.
Can a partner withdraw from a fixed-term partnership before it ends?
A partner may not, but the court may remove him if he asks and presents acceptable reasons, provided he compensates the partners for any harm they suffer.
Is it enough to tell the partners orally about the withdrawal?
The text requires notifying all the partners in writing of the intention to withdraw.
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1- يجب أن تكون عقود المشاركة الواردة في هذا الباب مكتوبة، وإلا كانت باطلة، ولا يجوز أن يحتج المتعاقد بالبطلان تجاه الغير، ولا يكون للبطلان أثر فيما بين المتعاقد
- Article 529
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1- الشركة عقد يسهم بمقتضاه شريكان أو أكثر بتقديم حصة من مال أو عمل أو منهما معًا في مشروع لاقتسام ما ينشأ عنه من ربح أو خسارة. 2- لا تسري أحكام هذا الفصل على ال
- Article 530
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1- لا يصح أن تكون الحصة أو بعضها ما للشريك من نفوذ أو سمعة أو ثقة مالية. 2- إذا كانت حصة الشريك غير نقدية، قُدرت الحصة بقيمتها عند التعاقد أو بما يتفق عليه الشر
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The article allows a partnership to be based on the partners' joint liability for what they undertake in their obligations for its benefit, makes each partner's share in the capital equal to what he undertook unless otherwise agreed, and allows partners to differ in their obligations.
1- يصح أن تقوم الشركة على أساس تضامن الشركاء فيما يلتزمون به في ذممهم من مال أو عملٍ لمصلحة الشركة، وتكون حصة كل منهم في رأس مال الشركة بقدر ما التزم به في ذمته
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The article provides that each partner's share is determined by what he undertook in the partnership contract, and that he may not increase it except with the consent of the other partners.
تتحدد حصة كل شريك بالحصة التي التزم بها في عقد الشركة، ولا يجوز للشريك زيادة حصته عن الحصة المحددة في عقد الشركة إلا بموافقة باقي الشركاء.
- Article 533
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إذا كانت حصة الشريك حق ملكية أو أي حق عينيّ آخر فإن أحكام البيع هي التي تسري على ضمان الحصة إذا هلكت أو استحقت أو ظهر فيها عيب، وإذا كانت الحصة مجرد الانتفاع با
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.