Article 100 of the Saudi Companies Law
المادة 100 من نظام الشركات · الفرع الثاني: جمعيات المساهمين
The article allows the articles of association of an unlisted joint stock company to provide for general assembly resolutions to be passed by circulation without a meeting, with certain resolutions excluded and conditions for validity.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يجوز أن يُنص في نظام الشركة الأساس على أن يكون لرئيس مجلس إدارة شركة المساهمة غير المدرجة في السوق المالية اقتراح إصدار قرار الجمعية العامة بعرضه على المساهمين بالتمرير، دون الحاجة إلى انعقادها ما لم يطلب أي من المساهمين -كتابة- اجتماع الجمعية العامة للمداولة فيه. ومع ذلك، يشترط لإصدار قرارات الجمعية العامة المتعلقة بانتخاب أعضاء مجلس إدارة الشركة وعزلهم، وتعيين مراجع حسابات الشركة -إن وجد- وعزله، ويشترط كذلك للاطلاع على القوائم المالية للسنة المالية المنقضية ومناقشتها؛ انعقادُ الجمعية العامة وفقًا للأحكام ذات الصلة.
2- يشترط لصحة القرار المقترح إصداره وفقًا للفقرة (1) من هذه المادة، أن ترسله الشركة مرافقًا له الوثائق ذات العلاقة إلى جميع المساهمين، مع بيان ما يتعين على المساهم اتباعه للموافقة عليه والتاريخ الذي يتعين فيه صدوره.
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 100 explained in plain English
This article gives joint stock companies not listed on the capital market a faster way to pass general assembly resolutions: the resolution by circulation, meaning that a resolution is put to the shareholders for approval without holding a meeting.
Conditions for using this method:
- The company's articles of association must provide for it.
- The proposal to pass a resolution by circulation is made by the chairman of the board of directors.
- If any shareholder requests in writing that the general assembly meet to deliberate on the resolution, it may not be passed by circulation.
Resolutions that cannot be passed by circulation: the general assembly must meet in accordance with the relevant provisions for:
- Electing and removing members of the board of directors.
- Appointing and removing the company's auditor, if there is one.
- Reviewing and discussing the financial statements for the past financial year.
Condition for the validity of the proposed resolution: the company must send it to all shareholders with the relevant documents, stating what the shareholder must do to approve it and the date by which it must be passed.
The percentages required to pass a resolution by circulation are set out in Article 101: a majority of voting rights for ordinary general assembly resolutions, and at least 75% for extraordinary general assembly resolutions, unless the articles of association set a higher percentage. When drafting the articles of association to include this mechanism, it is advisable to consult a lawyer who specializes in companies and commercial disputes.
Practical example
The chairman of the board of an unlisted family joint stock company in Makkah wanted to approve opening a new branch, and the company's articles of association allow resolutions by circulation. He sent the proposed resolution to all shareholders with the necessary documents and explained how to approve it and the date by which it had to be passed. Had any shareholder requested in writing that a meeting be held to deliberate, the general assembly would have had to meet instead of using circulation.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentA question about Article 100 of Companies Law?
Describe what happened and specialist lawyers answer. You can write in English.
- Completely free
- Lawyers from the directory answer
- Your name stays hidden
Commercial & Corporate Law lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Commercial & Corporate Law lawyers
Lawyers who handle this kind of case
شركة امتداد النظام للمحاماة والاستشارات المهنية
- Labour & Employment Law
- Criminal Law
- Criminal Law
- Commercial & Corporate Law
Frequently asked questions about Article 100 of the Saudi Companies Law
Can a general assembly resolution be passed without a meeting?
It can in an unlisted joint stock company if its articles of association provide for it, on a proposal from the chairman of the board, unless any shareholder requests in writing that a meeting be held.
Which resolutions cannot be passed by circulation?
Electing and removing board members, appointing and removing the auditor, and reviewing and discussing the financial statements for the past year, since these require the assembly to meet.
What are the conditions for a resolution by circulation to be valid?
The company must send it, with the relevant documents, to all shareholders, stating how to approve it and the date by which it must be passed.
More articles on Joint Stock Company
- Article 58
Article 58 defines the joint stock company as formed by one or more persons, with capital divided into tradable shares, liable alone for its debts, with a shareholder's liability limited to the value of the shares subscribed.
شركة المساهمة: هي شركة يؤسسها شخص واحد أو أكثر، من ذوي الصفة الطبيعية أو الاعتبارية، ويكون رأس مالها مقسمًا إلى أسهم قابلة للتداول، وتكون الشركة وحدها مسؤولة عن
- Article 59
Article 59 requires a joint stock company's issued capital to be at least SAR 500,000, with not less than one quarter paid at formation.
يجب ألا يقلّ رأس مال شركة المساهمة المصدر عن (خمسمائة ألف) ريال، ويجب ألا يقلّ المدفوع منه عند التأسيس عن (الربع).
- Article 60
Article 60 states that a joint stock company has an issued capital representing subscribed shares and may have an authorized capital, within which the board may increase the issued capital once it has been paid in full.
1- يكون لشركة المساهمة رأس مال مصدر يمثل الأسهم المكتتب بها، ويجوز أن يحدد نظام الشركة الأساس رأس مال مصرحًا به. 2- يجوز بقرار من مجلس إدارة الشركة زيادة رأس ال
- Article 61
The article lists what the articles of association of a joint stock company must contain and the documents attached to them when applying to incorporate the company.
1- يجب أن يشتمل النظام الأساس لشركة المساهمة بصفة خاصة على البيانات الآتية: أ- اسم الشركة. ب- المركز الرئيس للشركة. ج- غرض الشركة. د- رأس مال الشركة المصرح به -
- Article 62
The article requires the founders, if they do not subscribe to all the company's shares themselves during incorporation, to offer the remaining shares for subscription in accordance with the Capital Market Law.
إذا لم يقصر المؤسسون خلال مرحلة التأسيس الاكتتاب بجميع الأسهم على أنفسهم، وجب عليهم طرح الأسهم التي لم يكتتبوا بها للاكتتاب وفقًا لنظام السوق المالية.
- Article 63
The article gives the Ministry and the Authority the power to set the controls, procedures, documents and approvals for incorporating a joint stock company whose shares are offered for public subscription during incorporation or which is listed on the capital market.
للوزارة والهيئة وضع الضوابط والإجراءات وتحديد الوثائق والموافقات اللازمة لتأسيس شركة مساهمة تطرح أسهمها للاكتتاب العام خلال مرحلة التأسيس أو تدرج في السوق المال
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.