Article 193 of the Saudi Companies Law
المادة 193 من نظام الشركات · الباب السابع: الشركة غير الربحية
The article allows the public non-profit company to accept gifts, bequests and endowments and to manage and invest them under their donors' conditions, and to ask the competent judicial authority to amend the conditions if the donor's consent cannot be obtained.
Official text (Arabic)
This article has not been amended since the law was issued.
مع مراعاة أحكام الأنظمة ذات العلاقة ونظام الشركة الأساس، يجوز للشركة غير الربحية العامة قبول الهبات والوصايا والأوقاف النقدية والعينية أو إدارتها أو استثمارها والإنفاق من ريعها وفقًا لشروط الواهب أو الموصي أو الواقف إن وجدت. وإذا رغبت الشركة في تعديل هذه الشروط أو التحلل منها، وتعذر عليها الحصول على موافقة الواهب أو الموصي أو الواقف لوفاته أو عجزه أو غيابه، فلها التقدم إلى الجهة القضائية المختصة بطلب ذلك، وتبت الجهة القضائية المختصة في الطلب وفق ما تراه محققًا لشرط الواهب أو الموصي أو الواقف.
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 193 explained in plain English
This article opens an important door of funding for the public non-profit company: charitable funds.
1- What the company may do: subject to the relevant laws and the company's articles of association, it may:
- Accept gifts, bequests and endowments, whether in cash or in kind.
- Manage or invest them.
- Spend from their proceeds.
This is done in accordance with the conditions of the donor, testator or endower, if any, and the company is bound by those conditions.
2- Amending the conditions or being released from them: if the company wishes to amend these conditions or be released from them, and it cannot obtain the consent of the donor, testator or endower because of his death, incapacity or absence, it may apply to the competent judicial authority for that. The judicial authority decides the request as it sees fit to fulfill the condition of the donor, testator or endower.
The company may therefore not amend the conditions by a unilateral decision. It needs the consent of the owner of the funds, or a decision of the competent judicial authority when his consent cannot be obtained for the reasons stated.
The rule applies to the public non-profit company by the text of the article. It is connected to Article 194, which requires the non-profit company to spend its profits on the outlets and fields stated in its formation contract or articles of association. For anyone who wishes to make an endowment or bequest to a non-profit company, or a company that wants to amend a condition, it is advisable to consult a lawyer specializing in companies and commercial cases.
Practical example
A man endowed a building in Taif for the benefit of a public non-profit company, on condition that its proceeds be spent on teaching the Quran in a particular neighborhood. After his death the neighborhood's circumstances changed and the company wanted to spend the proceeds in another neighborhood. Because the endower's consent cannot be obtained due to his death, the company may apply to the competent judicial authority, which decides the request as it sees fit to fulfill the endower's condition.
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 193 of the Saudi Companies Law
May a non-profit company accept endowments and bequests?
Yes. The public non-profit company may accept cash and in-kind gifts, bequests and endowments and manage and invest them, subject to the relevant laws and its articles of association.
Is the company bound by the conditions of the endower or donor?
Yes. It spends from their proceeds in accordance with the conditions of the donor, testator or endower, if any.
How can the company amend the endower's condition after his death?
If his consent cannot be obtained because of his death, incapacity or absence, the company applies to the competent judicial authority, which decides the request as it sees fit to fulfill his condition.
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تعرّف المادة الشركة بأنها كيان قانوني يقوم على مساهمة شخصين أو أكثر في مشروع ربحي لاقتسام الربح والخسارة، مع جواز تأسيسها بإرادة شخص واحد وتأسيس شركات غير ربحية.
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 185
The article defines public and private non-profit companies, sets the forms they may take, prohibits offering their shares for public subscription, and applies the rules of their form where this chapter is silent.
1- الشركة غير الربحية العامة: هي شركة تتخذ شكل شركة المساهمة وليس لها اتخاذ أي شكل آخر، وتنفق الأرباح المتحققة من ممارسة نشاطها في أي من المصارف والمجالات غير ا
- Article 186
The article requires the public non-profit company's articles of association to state its public non-profit fields, and allows a non-profit company to collect returns and carry on a lawful activity whose profits are spent on those fields.
1- يشترط للموافقة على تأسيس الشركة غير الربحية العامة النص في نظامها الأساس على المصارف والمجالات غير الربحية العامة، ويجوز للشركة غير الربحية الخاصة النص في عق
- Article 187
The article requires the Ministry's approval for an amendment to a public non-profit company's articles of association to take effect if it covers rules on disposing of assets, the board's powers, or the company's outlets and fields.
إذا اشتمل قرار تعديل النظام الأساس للشركة غير الربحية العامة على تعديل أحكام التصرف في الأصول أو تعديل صلاحيات مجلس الإدارة أو مصارف ومجالات الشركة، فلا يكون هذ
- Article 188
The article makes every partner or shareholder in a non-profit company a member, lets the formation documents regulate membership classes, powers, fees and certificates, and lets the Ministry regulate aspects of membership.
1- يكون كل شريك أو مساهم في الشركة غير الربحية عضوًا. 2- يجوز أن ينص في عقد تأسيس الشركة غير الربحية أو نظامها الأساس على الآتي: أ- تحديد فئات وشروط وأحكام العض
- Article 189
The article provides that each membership class in a non-profit company gives rise to equal rights and obligations, and that a member holds the rights of his membership, including taking part in assembly deliberations and inspecting records.
ترتب كل فئة من فئات العضوية حقوقًا والتزامات متساوية، وتثبت للعضو جميع الحقوق المتصلة بعضويته بما في ذلك الحق في الاشتراك في مداولات جمعيات الأعضاء، وحق الاطلاع
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.