Article 140 of the Saudi Companies Law
المادة 140 من نظام الشركات · الفصل الثاني: تأسيس شركة المساهمة المبسطة
The article sets out what the articles of association of a simplified joint-stock company must contain and the documents attached to the formation application.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يجب أن يشتمل النظام الأساس لشركة المساهمة المبسطة بصفة خاصة على البيانات الآتية:
أ- اسم الشركة.
ب- المركز الرئيس للشركة.
ج- غرض الشركة.
د- رأس مال الشركة المصرح به -إن وجد- والمصدر والمدفوع منه.
هـ- عدد الأسهم، وأنواعها وفئاتها إن وجدت، والقيمة الاسمية، والحقوق المتصلة بكل نوع أو فئة.
و- مدة الشركة، إن وجدت.
ز- إدارة الشركة والأحكام الخاصة بذلك.
ح- التنازل عن الأسهم.
ط- اجتماعات المساهمين، والنصاب اللازم لصحتها.
ي- قرارات المساهمين، والنصاب اللازم لصدورها.
ك- تاريخ بدء السنة المالية وانتهائها.
ل- أي أحكام أو شروط أو بيانات أخرى يتفق المؤسسون أو المساهمون على تضمينها في نظام الشركة الأساس ولا تتعارض مع أحكام النظام.
2- يجب أن يرفق بالنظام الأساس عند تقديم طلب تأسيس الشركة الآتي:
أ- أسماء المؤسسين، وعناوينهم، وجنسياتهم.
ب- بيان عن الأعمال والنفقات المتوقعة لتأسيس الشركة.
ج- إقرار المؤسسين بالاكتتاب بكل أسهم الشركة، وقيمة المدفوع منها.
د- شهادة إيداع القدر المدفوع من رأس المال المصدر لدى أحد البنوك المرخص لها في المملكة.
ه- قرار من المؤسسين بتعيين رئيس الشركة أو مديرها أو مجلس إدارتها، بحسب الأحوال، متضمنًا أسماءهم وجنسياتهم، وعناوينهم، وتواريخ ميلادهم.
و- إقرار المؤسسين بالالتزام بجميع متطلبات النظام ذات الصلة بتأسيس الشركة.
ز- بيان أو تقرير معد من مقيم معتمد أو أكثر يُبين فيه القيمة العادلة للحصص العينية (إن وجدت)، وإقرارٌ من باقي المؤسسين بالموافقة على المقابل المحدد لها.
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 140 explained in plain English
This article gives a practical checklist for anyone who wants to form a simplified joint-stock company.
First: the articles of association must include, in particular:
- The company's name, head office and purpose.
- The authorized capital if any, and the issued and paid-up capital.
- The number of shares, their types and classes if any, the nominal value, and the rights attached to each type or class.
- The company's term, if any.
- The management of the company and the provisions on it.
- Assignment of shares.
- Shareholders' meetings and their quorum, and shareholders' decisions and the quorum for issuing them.
- The start and end dates of the financial year.
- Any other provisions agreed by the founders or shareholders that do not conflict with the provisions of the law.
Second: what is attached to the formation application:
- The names, addresses and nationalities of the founders.
- A statement of the expected formation work and expenses.
- The founders' declaration that they subscribe for all of the company's shares and the amount paid up on them.
- A certificate of deposit of the paid-up part of the issued capital with a bank licensed in the Kingdom.
- The founders' decision appointing the company's chairman, manager or board of directors, with their names, nationalities, addresses and dates of birth.
- The founders' declaration that they will comply with all the requirements of the law relating to formation.
- A statement or report from one or more accredited valuers of the fair value of the in-kind contributions, if any, and a declaration by the other founders that they approve the consideration set for them.
Note that the founders subscribe for all the shares themselves. Article 141 governs when in-kind contributions must be valued by an accredited valuer. To draft the articles of association, it is advisable to consult a lawyer specializing in companies.
Practical example
Ahmed and Salman decided to form a simplified joint-stock company for logistics services in Dammam. In the articles of association they wrote the company's name, head office, purpose, capital, number of shares, management method, restrictions on share assignment and decision quorums. They attached to the formation application a certificate of deposit of the paid-up capital at a licensed bank, a decision appointing Ahmed as manager of the company with his details, and their declaration that they subscribe for all the shares.
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 140 of the Saudi Companies Law
What must the articles of association of a simplified company include?
Among other things: the company's name, head office and purpose; the capital; the number, types and nominal value of shares; the company's management; assignment of shares; shareholders' meetings, decisions and quorums; and the financial year.
What documents are required with the formation application for a simplified joint-stock company?
The founders' names and details, a statement of formation expenses, a declaration of subscription for all shares, a certificate of deposit of the paid-up capital, the decision appointing the management, a declaration of compliance with the law's requirements, and a valuation report for in-kind contributions if any.
Must the capital be deposited in a bank?
Yes. A certificate of deposit of the paid-up part of the issued capital with a bank licensed in the Kingdom is attached to the formation application.
More articles on Simplified Joint Stock Company
- Article 138
The article provides that the joint-stock company provisions apply to the simplified joint-stock company where there is no special provision, except for listed articles, and gives its shareholders freedom to organize its structure in the articles of association.
1- تسري على شركة المساهمة المبسطة فيما لم يرد به نص خاص في هذا الباب، وبما يتفق مع طبيعتها، أحكام شركة المساهمة عدا المواد: (الحادية والستين)، و(الثالثة والستين
- Article 139
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.
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 الم
- Article 141
The article exempts in-kind contributions in a simplified joint-stock company from accredited valuation if they do not exceed half of the capital, requires it if they do, and makes founders or shareholders liable if valuation is not done or is departed from.
1- إذا قدمت حصص عينية عند تأسيس الشركة أو عند زيادة رأس مالها لا يتجاوز مجموع قيمتها (نصف) رأس مال الشركة، فلا يجب تقييمها من مقيم معتمد، ما لم يتفق المؤسسون أو
- Article 142
The article leaves the management of a simplified joint-stock company to its articles of association, gives management the widest powers, and binds the company by acts done in its name even beyond its authority, except against bad-faith dealers or those who know of the excess.
1- تحدد طريقة إدارة شركة المساهمة المبسطة في نظامها الأساس، ويجوز أن يتولى إدارتها رئيس أو مدير أو أكثر أو مجلس إدارة أو غير ذلك. ويُبين في نظام الشركة الأساس ط
- Article 143
The article makes the provisions on the liability of the board of a joint-stock company apply to the chairman, manager or board of directors of a simplified joint-stock company, as the case may be.
تسري الأحكام الخاصة بمسؤولية مجلس إدارة شركة المساهمة على رئيس شركة المساهمة المبسطة أو مديرها أو مجلس إدارتها بحسب الأحوال.
- Article 144
The article makes the rule of Article 72 of the Companies Law apply to the chairman, manager or board of directors of a simplified joint-stock company, as the case may be.
يسري حكم المادة (الثانية والسبعين) من النظام على رئيس شركة المساهمة المبسطة أو مديرها أو مجلس إدارتها بحسب الأحوال.
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.