Article 13 of the Saudi Commercial Court Law
المادة 13 من النظام التجاري نظام المحكمة التجارية · الفصل الثاني: في الشركات
The article defines the inan company as one with known capital in which each partner has a specific share, and no partner bears a loss beyond his share.
Official text (Arabic)
This article has not been amended since the law was issued.
شركة العنان هي الشركة المنعقدة بين اثنين فأكثر على رأس مال معلوم لكل من الشركاء حصة معينة فيه ولا يتحمل الشريك ضررا ولا خسارة زيادة على حصته من رأس المال.
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 13 explained in plain English
This article defines the inan company, one of the types of company regulated by the law. Its elements according to the text:
- It is formed between two or more people.
- On known capital.
- Each partner has a specific share in it, and the text does not require the shares to be equal as in Article 12.
- The partner bears no harm or loss beyond his share of the capital.
The last rule is the most important in practice: a partner's liability in the inan company is limited to his share, unlike the mufawada company (general partnership) in Article 12, in which all the partners are jointly and severally liable for the undertakings signed by the authorized partners.
Article 14 mentions that among the branches of the inan company is the joint-stock company, whose capital is divided into shares and which is managed by chosen agents.
If you are thinking of entering a partnership and want to know the limits of your liability, consult a lawyer who specializes in companies and commercial cases.
Practical example
Noura enters an inan company in Jeddah as a partner with a share of SAR 100,000 of the capital, and the company runs into difficulty. Under this article, Noura does not bear a loss exceeding her share of the capital.
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 13 of the Saudi Commercial Court Law
What is an inan company?
It is a company between two or more people on known capital, in which each partner has a specific share.
Does a partner in an inan company bear more than his share?
No. The text is explicit that the partner bears no harm or loss beyond his share of the capital.
Is a joint-stock company a type of inan company?
Yes. Article 14 provides that the joint-stock company is a branch of the inan company.
More articles on Companies Under the Commercial Law
- Article 11
The article defines a company as a contract between two or more people to make a lawful profit, and divides companies into mufawada, inan and mudaraba.
الشركة عقد بين اثنين فأكثر يلتزم به تصرف مخصوص لتحصيل ربح مشروع؛ وهي ثلاثة أنواع: شركة المفاوضة ، وشركة العنان ، وشركة المضاربة .
- Article 12
The article defines the mufawada (general partnership) company as one with known equal capital, in which partners are jointly and severally liable for the company's undertakings.
شركة المفاوضة المعبر عنها بشركة التضامن هي الشركة المنعقدة تحت إمضاء عموم الشركاء على رأس مال معلوم متساو ويكون جميع الشركاء متضامنين متكافلين في كل التعهدات وا
- Article 14
The article defines the joint-stock company as a branch of the inan company whose capital is divided into shares and which is managed by chosen agents who are not personally liable for its undertakings.
من فروع شركة العنان المساهمة وهي الشركة المنعقدة على رأس مال معلوم يقسم إلى أسهم، والأسهم إلى حصص متساوية المبالغ من غير تسمية أصحاب الحصص، ويتولى إدارتها وكلاء
- Article 15
The article defines the mudaraba company as one in which one party provides the capital and the other the work, and all share in the profit.
شركة المضاربة هي الشركة المنعقدة على أن يكون رأس المال من طرف والعمل من الطرف الآخر لاشتراك الجميع في الربح الحاصل.
- Article 16
The article provides that there are other partnerships customary among merchants that are not listed, and their customary requirements apply to them.
ما عدا الشركات المذكورة آنفا توجد شركات أخرى متعارفة بين التجارة تجري فيها مقتضياتها.
- Article 17
The article provides that the profits of all partnerships are divided among the partners in the manner they agreed.
كل الشركات تقسم أرباحها على الوجه الذي وقع الاتفاق عليه وبين الشركاء.
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.