Article 139 of the Saudi Companies Law

المادة 139 من نظام الشركات · الفصل الأول: أحكام عامة

The article requires the articles of association to state the issued and paid-up capital of a simplified joint-stock company, allows an authorized capital, and does not apply to it the minimum capital set for a joint-stock company.

Official text (Arabic)

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

1- يحدد في نظام الشركة الأساس مقدار رأس مالها المصدر وقيمة المدفوع منه، ويجوز أن يُنص فيه على أن يكون لها رأس مال مصرح به.

2- لا يسري متطلب الحد الأدنى لرأس المال المقرر لشركة المساهمة على شركة المساهمة المبسطة.

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 139 explained in plain English

This article governs the capital of the simplified joint-stock company, one of the main things that distinguishes this form from the ordinary joint-stock company:

1- What the articles of association state

The amount of the issued capital.
The amount paid up of it.
They may also provide that the company has an authorized capital, which is optional.

2- No minimum capital

The minimum capital requirement set for a joint-stock company does not apply to the simplified joint-stock company. The founders set in the articles of association the capital that suits their project, without being bound by that minimum. The article does not state the amount of the minimum set for a joint-stock company.

Practical effect: this makes the simplified company suitable for start-ups and small projects that want a share structure without needing large capital at formation.

This article is linked to Article 138, under which the joint-stock company provisions apply to the simplified company where there is no special provision; this article is a special provision that removes the minimum. Article 140 also requires the articles of association to include the authorized capital, if any, and the issued and paid-up capital, and requires a certificate of deposit of the paid-up amount with a bank licensed in the Kingdom to be attached to the formation application. To help determine the right capital, you can consult a lawyer specializing in companies.

Practical example

Noura and her partner set up a simplified joint-stock company for an online store in Jeddah. In the articles of association they set a small issued capital that suits the size of their project, and the amount paid up. They were not bound by the minimum capital set for a joint-stock company, because it does not apply to the simplified company.

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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