Article 182 of the Saudi Companies Law
المادة 182 من نظام الشركات · الفصل الرابع: رأس المال والحصص
The article requires the company's manager, once losses reach half the capital, to call the partners' general assembly within 60 days of learning of it to consider continuing the company or dissolving it.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا بلغت خسائر الشركة نصف رأس مالها، وجب على مدير الشركة دعوة الجمعية العامة للشركاء إلى الاجتماع خلال (ستين) يومًا من تاريخ العلم ببلوغ الخسارة هذا المقدار للنظر في استمرار الشركة مع اتخاذ أي من الإجراءات اللازمة لمعالجة تلك الخسائر، أو حلها.
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 182 explained in plain English
This article sets an early warning that protects the partners and those who deal with the company when its funds are being eroded by losses.
When does the provision apply? When the company's losses reach half of its capital.
Who bears the obligation? The company manager; they are bound to act and do not wait for the partners to take the initiative.
What is required of them? To call the partners' general assembly to meet within 60 days starting from the date they learn that the loss has reached this amount, not from the date it occurred.
What does the assembly consider? The assembly decides one of two things:
- Continuing the company, taking whatever steps are needed to deal with those losses.
- Or dissolving the company.
The article does not specify the kind of remedial steps, leaving the partners to choose what they consider necessary. It does not provide that the company is dissolved automatically as soon as the loss reaches half; it leaves the decision to the partners after they are called.
In the same context, Article 183 regulates extending the term of a fixed-term company by a decision of the partners' general assembly. If your company faces large losses, it is useful to consult a lawyer who specializes in companies and commercial disputes to assess the options available.
Practical example
A company in Jeddah has capital of SAR 1 million, and its manager discovered when reviewing the accounts that its accumulated losses had reached SAR 500,000. He must call the partners to a general assembly meeting within 60 days of the date he learned of it, so that they decide either to continue and take steps to deal with the losses, or to dissolve the company.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentA question about Article 182 of Companies Law?
Describe what happened and specialist lawyers answer. You can write in English.
- Completely free
- Lawyers from the directory answer
- Your name stays hidden
Commercial & Corporate Law lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Commercial & Corporate Law lawyers
Lawyers who handle this kind of case
شركة امتداد النظام للمحاماة والاستشارات المهنية
- Labour & Employment Law
- Criminal Law
- Criminal Law
- Commercial & Corporate Law
Frequently asked questions about Article 182 of the Saudi Companies Law
What happens if the company loses half of its capital?
The company's manager must call the partners' general assembly to meet within 60 days of the date they learn of it, to consider continuing the company while dealing with the losses, or dissolving it.
Is the company dissolved automatically if it loses half of its capital?
No. The article does not provide for automatic dissolution, but requires the partners' general assembly to be called to decide on continuing or dissolving.
When does the 60-day period start?
From the date of learning that the loss has reached half of the company's capital.
More articles on Limited Liability Company
- Article 25
The article states when ownership of shares and stock transfers: by commercial register entry for partnership and limited liability shares, by shareholders' register entry for unlisted joint stock and simplified companies, and under the Capital Market Law for listed ones.
1- تنتقل ملكية الحصص في شركة التضامن وشركة التوصية البسيطة والشركة ذات المسؤولية المحدودة بالقيد لدى السجل التجاري، ولا يُعتد بنقل ملكية الحصة في مواجهة الشركة
- Article 156
The article defines the limited liability company as a company with a separate financial liability formed by one or more persons, in which a partner is liable for its debts only to the extent of their share in the capital.
الشركة ذات المسؤولية المحدودة: هي شركة يؤسسها شخص واحد أو أكثر من ذوي الصفة الطبيعية أو الاعتبارية، وتعد ذمتها مستقلة عن الذمة المالية لكل شريك فيها أو المالك ل
- Article 157
The article regulates a limited liability company owned by one person: their powers, documenting their decisions, appointing a manager, and the company having articles of association in place of a memorandum of association.
1- في حال تأسيس الشركة ذات المسؤولية المحدودة من شخص واحد، أو إذا آلت جميع حصصها إلى شخص واحد، يترتب ما يأتي: أ- أن تكون لهذا الشخص صلاحيات وسلطات المدير ومجلس
- Article 158
The article sets out the details that must be stated in the memorandum of association of a limited liability company, and the documents attached to it when applying for formation.
1- يجب أن يشتمل عقد تأسيس الشركة ذات المسؤولية المحدودة بصفة خاصة على البيانات الآتية: أ- أسماء الشركاء، وبياناتهم. ب- اسم الشركة. ج- المركز الرئيس للشركة. د- غ
- Article 159
For valuing in-kind shares in a limited liability company, the article refers to the provisions of Article 141 of the Companies Law.
يتبع في تقييم الحصص العينية الأحكام المنصوص عليها في المادة (الحادية والأربعين بعد المائة) من النظام.
- Article 160
The article provides that a limited liability company is managed by one or more managers appointed by the partners in the memorandum of association or a separate contract, and that a board of managers may be formed.
يدير الشركة مدير أو أكثر من الشركاء أو من غيرهم، ويعين الشركاء المدير أو المديرين في عقد تأسيس الشركة أو في عقد مستقل، لمدة محددة أو غير محددة. ويجوز بقرار من ا
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.