Article 15 of the Saudi Companies Law
المادة 15 من نظام الشركات · الفصل الأول: تأسيس الشركة
Article 15 makes every partner a debtor to the company for their share and, if they delay contributing it by the deadline, lets the company demand performance or suspend their share-related rights, while keeping its right to compensation in all cases.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يعد كل شريك مدينًا للشركة بالحصة التي تعهد بها.
2- إذا تأخر الشريك عن تقديم حصته في رأس مال الشركة، في الأجل المحدد لذلك، كان للشركة مطالبته بتنفيذ ما تعهد به تجاهها، أو تعليق نفاذ الحقوق المتصلة بحصصه كالحق في الحصول على أرباح أو حق التصويت في الجمعية العامة أو على قرارات الشركاء، مع احتفاظ الشركة في جميع الأحوال بالحق في مطالبته بالتعويض عن الضرر المترتب على ذلك.
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 15 explained in plain English
This article deals with a common situation: a partner undertook a share and did not contribute it on time.
The rule: every partner is considered a debtor to the company for the share they undertook; the share is a debt owed by them to the company.
If they delay contributing it by the set deadline, the company has one of two options:
- Demand performance: that is, demand that they contribute what they undertook.
- Suspend the rights attached to their shares: such as the right to receive profits, or the right to vote in the general assembly or on the partners' resolutions.
In all cases the company retains its right to claim compensation for the harm resulting from the delay, whether it chooses to demand performance or to suspend the rights.
Note that suspension applies to "the rights attached to their shares," with profits and voting mentioned as examples. The article does not specify which body within the company takes the suspension decision or its procedures; these are therefore left to the formation contract or bylaws and the other provisions of the Companies Law.
This article follows Article 14, which sets out the partner's obligations in contributing and guaranteeing their share. Anyone facing a dispute with a delinquent partner would do well to consult a lawyer specialized in companies and commercial matters.
Practical example
Omar undertook to contribute a cash share in a limited liability company in Jeddah within a set deadline, but he was late. The company may demand that he pay or suspend his right to profits and voting, while also claiming compensation for the harm the delay caused.
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 15 of the Saudi Companies Law
What happens if a partner does not pay their share on time?
The company may demand that they perform what they undertook or suspend the rights attached to their shares, and it keeps its right to compensation for the harm in all cases.
Can the profits of a partner who is late paying their share be stopped?
Yes. One of the rights that may be suspended is the right to receive profits.
Does a late partner lose their right to vote?
The company may suspend the right to vote in the general assembly or on the partners' resolutions as part of suspending the rights attached to their shares.
More articles on Company Formation
- Article 1
This article defines the key terms of the Companies Law, such as the Ministry, the Authority, the competent authority, relatives and day, and leaves the definition of other terms to the regulations.
1- يقصد بالكلمات والعبارات الآتية -أينما وردت في هذا النظام- المعاني الموضحة أمام كل منها، ما لم يقتضِ السياق غير ذلك: المملكة: المملكة العربية السعودية. النظام
- Article 2
Article 2 defines a company as a legal entity in which two or more persons contribute to a profit-seeking venture to share its profit and loss, and allows a company to be formed by one person or as a non-profit.
الشركة كيان قانوني يؤسس وفقًا لأحكام النظام بناء على عقد تأسيس أو نظام أساس يلتزم بمقتضاه شخصان أو أكثر بأن يساهم كل منهم في مشروع يستهدف الربح بتقديم حصة من ما
- Article 3
Article 3 provides that every company formed under the Companies Law is of Saudi nationality and must have its principal center in the Kingdom.
تعد الشركة التي تؤسس وفقًا لأحكام النظام سعودية الجنسية، ويجب أن يكون مركزها الرئيس في المملكة.
- Article 4
Article 4 sets out the five forms, one of which every company formed under the Companies Law must take.
تتخذ الشركة التي تؤسس وفقًا لأحكام النظام أحد الأشكال الآتية: أ- شركة التضامن. ب- شركة التوصية البسيطة. ج- شركة المساهمة. د- شركة المساهمة المبسطة. هـ- الشركة ذ
- Article 5
The article regulates a company's trade name: its language and sources, the former partner's consent to the use of his name, the indication of the company's form, and amendment of the name without affecting its rights and obligations.
1- يكون لكل شركة اسم تجاري باللغة العربية أو بلغة أخرى، ويجوز أن يكون الاسم مشتقًا من غرضها، أو اسمًا مميزًا، أو اسم واحد أو أكثر من الشركاء أو المساهمين فيها ا
- Article 6
Article 6 states who counts as a founder, regulates submitting the formation application to the commercial register, and gives founders the right to appeal a refusal to the Ministry and then to the competent judicial body.
1- يعد مؤسسًا كل من اشترك فعليًّا في تأسيس الشركة وساهم في رأس مالها بحصة نقدية أو عينية. 2- يقدم المؤسسون طلب تأسيس الشركة وقيدها إلى السجل التجاري، مرافقًا له
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.