Article 147 of the Saudi Companies Law
المادة 147 من نظام الشركات · الفصل الرابع: المساهمون
The article requires the management of a simplified joint-stock company to prepare the financial statements and an annual report and present them, with the auditor's report, to the shareholders within 6 months of the end of the financial year, and to file them as the regulations provide.
Official text (Arabic)
This article has not been amended since the law was issued.
يجب على رئيس شركة المساهمة المبسطة أو مديرها أو مجلس إدارتها -بحسب الأحوال- 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 إن وجدت. وتعرض هذه الوثائق وتقرير مراجع الحسابات، إن وجد، على المساهمين، وذلك خلال (ستة) أشهر من تاريخ انتهاء السنة المالية للشركة، وعليه إيداع هذه الوثائق وفقًا لما تحدده اللوائح.
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 147 explained in plain English
This article sets the financial obligations of the management of the simplified joint-stock company at the end of each year.
Who is bound? The company's chairman, manager or board of directors, as the case may be.
What is required?
- Prepare the company's financial statements for the financial year that has ended.
- Prepare a report on the company's activity and financial position, including the proposed method for distributing profits, if any.
- Present these documents, with the auditor's report if there is one, to the shareholders within 6 months of the end of the financial year.
- File these documents as determined by the regulations; the article does not state where or how they are filed.
What distinguishes it: the article does not impose detailed periods before a specific meeting but sets one period only, 6 months from the end of the financial year to present the documents to the shareholders, which suits the flexibility of the simplified company. The phrase "if any" after profit distribution means the report includes the proposed method of distribution whenever there are profits proposed for distribution.
If the documents are presented at a shareholders' meeting, Article 146 governs the call to it: the call is sent at least 5 days before the date with the agenda, and in certain meetings a shareholder has the right to obtain and review the information and documents relating to them during the 5 days before the meeting. Anyone with a question about the obligations of their company's management can consult a lawyer specializing in companies.
Practical example
A simplified joint-stock company in Madinah has a financial year ending on December 31. Its manager prepares the financial statements and a report on the company's activity proposing the distribution of part of the profits, presents them with the auditor's report to the shareholders in May, within 6 months of the end of the year, and then files them as the regulations provide.
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 147 of the Saudi Companies Law
When must the financial statements be presented to the shareholders of a simplified company?
Within 6 months of the end of the company's financial year.
Who prepares the financial statements in a simplified company?
The company's chairman, manager or board of directors, as the case may be.
What does the annual report include?
The company's activity and financial position for the year that has ended, and the proposed method for distributing profits, if any.
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 140
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.
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 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.
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.