Article 150 of the Saudi Companies Law

المادة 150 من نظام الشركات · الفصل الرابع: المساهمون

The article allows a simplified joint-stock company to have a single person, whose liability is limited to the money allocated as capital and who exercises the shareholders' powers through written decisions entered in a special register.

Official text (Arabic)

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

في حال تأسيس شركة المساهمة المبسطة من شخص واحد، أو إذا آلت جميع أسهمها إلى شخص واحد، يترتب ما يأتي:

أ- اقتصار مسؤولية هذا الشخص على ما خصصه من مال ليكون رأس مال للشركة.

ب- أن تكون له صلاحيات وسلطات المساهمين المنصوص عليها في هذا الباب، وتصدر قراراته كتابة وتدون في سجل خاص لدى الشركة.

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 150 explained in plain English

This article deals with the simplified joint-stock company owned by one person, whether it was:

formed by one person from the start, or
later all its shares came to one person, for example where one shareholder buys the others' shares.

Two consequences follow:

Limited liability: this person's liability is limited to the money they allocated to be the company's capital. As a rule, their other personal assets do not stand as security for the company's debts under this provision.
Shareholders' powers: they have the powers and authorities of the shareholders set out in the part of the law on the simplified company, and their decisions are issued in writing and entered in a special register kept by the company.

The importance of writing: because there are no other shareholders to meet with, writing down their decisions in a special register takes the place of the minutes of meetings and serves as evidence of what they decided.

Article 149 governs decisions by circulation among shareholders when there are several; a sole owner's decisions are issued by them directly in writing. Anyone thinking of forming a company alone is advised to consult a lawyer specializing in companies.

Practical example

Saud formed a simplified joint-stock company on his own to provide design services in Riyadh, and allocated an amount to it as capital. When the company fell behind in paying a supplier's debt, Saud's liability was limited to the money he had allocated as the company's capital. When he decided to open a new branch, he wrote down his decision and entered it in the company's special register.

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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