Article 1 of the Saudi Commercial Books Law
المادة 1 من نظام الدفاتر التجارية
The article requires every merchant to keep regular commercial books in Arabic that show their financial position, at least the original journal, the inventory book and the general ledger, and exempts a merchant whose capital does not exceed SAR 100,000.
Official text (Arabic)
This article has not been amended since the law was issued.
يجب على كل تاجر أن يمسك الدفاتر التجارية التي تستلزمها طبيعة تجارته وأهميتها بطريقة تكفل بيان مركزه المالي بدقة، وبيان ما له من حقوق وما عليه من التزامات متعلقة بتجارته، ويجب أن تكون هذه الدفاتر منتظمة وباللغة العربية، ويجب أن يمسك على الأقل الدفاتر الآتية:
- دفتر اليومية الأصلي.
- دفتر الجرد.
- الدفتر الأستاذ العام.
ويعفى من مسك هذه الدفاتر التاجر الذي لا يزيد رأس ماله على مائة ألف ريال.
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 1 explained in plain English
This article is the foundation on which the Commercial Books Law rests; it requires every merchant to keep the commercial books that the nature, size and importance of their trade call for.
The purpose of these books is to show accurately:
- The merchant's financial position.
- The rights they hold and the obligations they owe in connection with their trade.
The article sets two conditions for these books: they must be regular, and they must be in Arabic. It also sets a minimum that may not be gone below, which is three books:
- The original journal.
- The inventory book.
- The general ledger.
The words "at least" mean that a merchant may need other books if the nature and importance of their trade require it; the test is what ensures that the financial position is shown accurately.
The exemption: a merchant whose capital does not exceed SAR 100,000 is exempt from keeping these books. If their capital exceeds this amount, they must keep them.
Article 2 completes this provision by allowing establishments and companies that use computers for their accounts to record the books' data on them, according to procedures and rules set by the Implementing Regulations.
Anyone unsure whether the exemption applies to them, or which books suit their business, would do best to consult an accountant or a lawyer specializing in commercial and company cases.
Practical example
Khaled opened an electrical appliances store in Dammam with capital of SAR 400,000. He must keep, at the least, the original journal, the inventory book and the general ledger, in Arabic and in a regular manner. His neighbor Saad, who runs a small shop with capital of SAR 80,000, is exempt from keeping these books.
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 1 of the Saudi Commercial Books Law
Must every merchant keep commercial books?
Yes, as a rule every merchant must, except a merchant whose capital does not exceed SAR 100,000.
Which commercial books must a merchant keep at a minimum?
The original journal, the inventory book and the general ledger, and the merchant may need others depending on the nature and importance of their trade.
May commercial books be kept in a language other than Arabic?
The article requires the books to be in Arabic and to be regular.
More articles on Keeping Commercial Books
- Article 2
The article allows establishments and companies that use computers for their accounts to record commercial books data on them, and leaves it to the Implementing Regulations to set rules ensuring the validity and integrity of the data.
يجوز أن تدون البيانات الخاصة بالدفاتر التجارية عن طريق الحاسب الآلي، وذلك بالنسبة للمؤسسات والشركات التي تستخدم الحاسب الآلي في حساباتها، وتحدد اللائحة التنفيذي
- Article 7
The article requires the commercial books provided for in the Law to follow the form set by the Ministry of Commerce and to have numbered pages.
يجب أن تكون الدفاتر المنصوص عليها في هذا النظام وفقا للنموذج الذي تحدده وزارة التجارة على أن تكون صفحات هذه الدفاتر مرقمة.
- Article 14
The article repeals Articles 6, 7, 8, 9 and 10 of the Commercial Court Law issued by Order No. 32 dated 15/1/1350 AH, and every provision that conflicts with the Commercial Books Law.
تلغى أحكام المواد (6 ،7 ،8 ،9 ،10) من نظام المحكمة التجارية الصادرة بالأمر رقم (32) وتاريخ 15 / 1 / 1350 هـ، وكل حكم يتعارض مع أحكام هذا النظام.
- Article 15
The article requires the Minister of Commerce to issue the regulations and decisions needed to implement the Commercial Books Law.
على وزير التجارة إصدار اللوائح والقرارات اللازمة لتنفيذ هذا النظام.
- Article 16
The article provides that the Commercial Books Law is published in the Official Gazette and takes effect six months after the date of its publication.
ينشر هذا النظام بالجريدة الرسمية ، ويعمل به بعد ستة أشهر من تاريخ نشره.
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.