Article 121 of the Saudi Companies Law

المادة 121 من نظام الشركات · الفصل الخامس: مالية شركة المساهمة

The article requires the board of a joint-stock company to prepare the financial statements and an annual activity report and give them to the auditor at least 45 days before the annual general assembly.

Official text (Arabic)

This article has not been amended since the law was issued.

1- يجب على مجلس الإدارة في نهاية كل سنة مالية للشركة أن يعد القوائم المالية للشركة وتقريرًا عن نشاطها ومركزها المالي عن السنة المالية المنقضية، ويضمّن هذا التقرير الطريقة المقترحة لتوزيع الأرباح. ويضع المجلس هذه الوثائق تحت تصرف مراجع الحسابات إن وجد، قبل الموعد المحدد لانعقاد الجمعية العامة العادية السنوية (بخمسة وأربعين) يومًا على الأقل.

2- يجب أن يوقع رئيس مجلس إدارة الشركة ورئيسها التنفيذي، ومديرها المالي إن وجد، الوثائق المشار إليها في الفقرة (1) من هذه المادة، وتودع نسخ منها في مركز الشركة الرئيس تحت تصرف المساهمين.

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 121 explained in plain English

This article sets out what the board of directors of a joint-stock company must do at the end of each financial year, so that shareholders have a clear picture of the company's position before their annual meeting.

First: what the board prepares

The company's financial statements for the financial year that has ended.
A report on the company's activity and financial position for that year, which must include the proposed method for distributing profits.

Second: handing them to the auditor

The board places these documents at the disposal of the auditor, if there is one, at least 45 days before the date set for the annual ordinary general assembly, so the auditor can examine them.

Third: signing and filing

The documents are signed by the chairman of the board, the chief executive officer, and the chief financial officer, if there is one.
Copies are deposited at the company's head office at the disposal of the shareholders.

Article 122 complements this rule: it requires the chairman of the board to provide shareholders with the financial statements, the board's report and the auditor's report (if any) at least 21 days before the date of the annual ordinary general assembly, unless they are published by a modern technological means. Anyone with a question about the board's obligations in a particular company should consult a lawyer specializing in companies and commercial cases.

Practical example

A joint-stock company in Jeddah has a financial year ending on December 31, and its board has set the date of the annual ordinary general assembly. The board must prepare the financial statements and the annual report, including the proposed profit distribution, and place them at the auditor's disposal at least 45 days before the assembly. The chairman, the chief executive officer and the chief financial officer must sign them, and copies are then deposited at the head office for the shareholders to review.

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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