Article 198 of the Saudi Companies Law
المادة 198 من نظام الشركات · الباب الثامن: الشركة المهنية
The article provides that a professional company takes any of the company forms set out in Article 4 of the Companies Law.
Official text (Arabic)
This article has not been amended since the law was issued.
تتخذ الشركة المهنية أيًّا من أشكال الشركات الواردة في المادة (الرابعة) من النظام.
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 198 explained in plain English
This article settles the question of the professional company's legal form in a short text: the professional company takes any of the company forms set out in Article 4 of the Law.
What does this mean in practice?
- The professional company is not an independent form of company; it is a description attached to a company that takes one of the forms set out in Article 4.
- The founders are free to choose the form that suits them from among those forms.
Why does the choice of form matter? Because Article 199 provides that the professional company is subject, on matters not covered by a special provision in the chapter dedicated to it, to the rules for the company form it takes, to the extent they do not conflict with its nature. The chosen form therefore determines a large part of the rules that govern the company.
This article completes the definition in Article 197, which explains that the professional company is formed by those licensed in one or more liberal professions, or by them together with others, for the purpose of practicing those professions.
This article alone does not state whether there are restrictions on a particular form in special cases; for that, the rest of the chapter's provisions are referred to. To choose the form best suited to your professional practice, it is advisable to consult a lawyer specializing in companies and commercial cases.
Practical example
Two licensed certified accountants in Jeddah want to form a professional company. They may choose any of the company forms set out in Article 4 of the Law, and they will then be subject, on matters not covered by a special provision for the professional company, to the rules of the form they chose.
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 198 of the Saudi Companies Law
What is the legal form of the professional company?
The professional company takes any of the company forms set out in Article 4 of the Companies Law.
Is the professional company an independent type of company?
No. It takes one of the company forms set out in Article 4, and the rules of that form apply to it on matters not covered by a special provision for it under Article 199.
Articles this article refers to
More articles on Professional Company
- Article 197
The article defines the professional company as a company formed by one or more persons licensed in one or more liberal professions, or by them together with others, for the purpose of practicing those professions.
الشركة المهنية هي شركة يؤسسها شخص أو أكثر من المرخص لهم نظامًا في ممارسة مهنة حرة واحدة أو أكثر، أو منهم مع غيرهم، ويكون غرضها ممارسة تلك المهن.
- Article 199
The article applies the rules of its form to the professional company where there is no special provision, and provides that a partner or shareholder in it does not acquire the status of merchant by virtue of the partnership.
1- تسري على الشركة المهنية -فيما لم يرد به نص خاص في هذا الباب- الأحكام الخاصة بشكل الشركة الذي تتخذه، وبما لا يتعارض مع طبيعتها. 2- لا يكتسب الشريك أو المساهم
- Article 200
The article sets the ways to form a professional company: between licensed persons, by one person, across several professions or with a non-Saudi professional company, and participation by unlicensed persons under the regulations.
1- للأشخاص المرخص لهم في ممارسة مهنة حرة واحدة أن يؤسسوا فيما بينهم شركة مهنية بأي شكل من الأشكال الواردة في المادة (الرابعة) من النظام. 2- للشخص المرخص له في م
- Article 201
The article bars a partner or shareholder who practices the profession in a professional company from taking part in another professional company practicing the same profession, unless the formation contract or articles of association provide for it.
لا يجوز للشريك في شركة مهنية ولا للمساهم فيها، الممارسين لمهنة حرة، المشاركة ولا المساهمة في شركة مهنية أخرى تمارس المهنة الحرة ذاتها، ما لم ينص عقد تأسيس الشرك
- Article 202
The article provides that a professional company is formed under the formation procedures prescribed for its form, and that partners may dissolve it only after announcement and written notice to everyone dealing with it, under the regulations.
1- تؤسس الشركة المهنية وفقًا لإجراءات التأسيس المقررة لشكل الشركة. 2- لا يجوز للشركاء ولا للمساهمين في الشركة المهنية حلها إلا بعد الإعلان عن ذلك وإبلاغ جميع ال
- Article 203
The article limits practice of the profession in a professional company to licensed partners or shareholders, and allows it to engage other licensed persons under its supervision and responsibility.
لا تمارس الشركة المهنية المهنة أو المهن الحرة محل نشاطها إلا عن طريق الشركاء أو المساهمين المرخص لهم. ومع ذلك، يجوز لها الاستعانة في أعمالها بأشخاص آخرين مرخص ل
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.