Article 201 of the Saudi Companies Law
المادة 201 من نظام الشركات · الباب الثامن: الشركة المهنية
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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 الشركة أو نظامها الأساس على ذلك، ودون إخلال بالأنظمة ذات العلاقة. وتبين اللوائح الأحكام والضوابط التي يجوز فيها للشريك أو المساهم المرخص له المشاركة أو المساهمة في شركة مهنية أخرى.
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 201 explained in plain English
This article deals with the question of multiple partnerships for members of the liberal professions.
The rule: a partner or shareholder in a professional company who practices a liberal profession may not take part or invest in another professional company that practices the same liberal profession.
Scope of the prohibition:
- It covers a partner or shareholder who practices the profession; the text does not address those who do not practice it.
- It is limited to other professional companies that practice the same profession, so under the text of the article it does not extend to a professional company that practices a different profession.
The exception: this is permitted if the company's formation contract or articles of association provide for it, without prejudice to the relevant laws, meaning that what other laws regulating the profession provide must still be observed.
The role of the regulations: the regulations set out the rules and conditions under which a licensed partner or shareholder may take part or invest in another professional company.
This article is connected to Article 202, which provides that the professional company is formed in accordance with the formation procedures prescribed for its form, and to Article 200, which sets out the ways of forming a professional company. Before entering a second professional partnership, it is advisable to review the formation contract and consult a lawyer specializing in companies and commercial cases.
Practical example
A licensed engineer is a partner in a professional engineering consultancy in Riyadh, and he was offered the chance to become a partner in another professional engineering company in Jeddah. He may not do so unless his company's formation contract or articles of association permit it, and subject to the relevant laws and the rules set out in the regulations.
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 201 of the Saudi Companies Law
May a partner in a professional company be a partner in another professional company?
A partner or shareholder who practices the profession may not take part in another professional company practicing the same profession, unless the formation contract or articles of association provide for it, and without prejudice to the relevant laws.
Does the prohibition cover companies practicing a different profession?
The text of the prohibition concerns other professional companies that practice the same liberal profession.
Who sets the rules for taking part in more than one professional company?
The regulations set out the rules and conditions under which a licensed partner or shareholder may take part in another professional company.
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 198
The article provides that a professional company takes any of the company forms set out in Article 4 of the Companies Law.
تتخذ الشركة المهنية أيًّا من أشكال الشركات الواردة في المادة (الرابعة) من النظام.
- 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 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.