Article 202 of the Saudi Companies Law
المادة 202 من نظام الشركات · الباب الثامن: الشركة المهنية
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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 المتعاملين معها كتابة بحسب الإجراءات التي تحددها اللوائح.
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 202 explained in plain English
This article deals with the beginning and end of the professional company by the will of its owners.
1- Formation: the professional company is formed in accordance with the formation procedures prescribed for the company form it takes. This article contains no formation procedures specific to the professional company; it follows the procedures of its form.
2- Dissolution: the partners and shareholders in a professional company may not dissolve it except after two things:
- Announcing it.
- Notifying all those dealing with it in writing.
This is done according to the procedures set by the regulations. The reason is plain: the clients of a professional company, such as the clients of law, accounting or consulting firms, rely on it for continuing work, so they should not be surprised by its dissolution.
The article does not state the content, means or period of the announcement; these are left to the regulations.
The article is connected to Article 201, which regulates a professional partner's participation in another professional company, and to Article 203, which limits the practice of the profession in the company to licensed partners or shareholders and the licensed persons it engages. When considering the dissolution of a professional company, it is advisable to consult a lawyer specializing in companies and commercial cases so that the correct procedures are followed.
Practical example
Two partners in a professional accounting company in Al Khobar decided to dissolve the company. Before the dissolution they must announce it and notify all the company's clients and those dealing with it in writing, following the procedures set by 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 202 of the Saudi Companies Law
How is a professional company formed?
It is formed in accordance with the formation procedures prescribed for the company form it takes.
Can a professional company be dissolved directly by a decision of the partners?
The partners or shareholders may not dissolve it except after announcing it and notifying everyone dealing with it in writing, according to the procedures set by the regulations.
Must clients be notified when a professional company is dissolved?
Yes. All those dealing with the company must be notified in writing before its dissolution.
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 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 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.