Article 203 of the Saudi Companies Law
المادة 203 من نظام الشركات · الباب الثامن: الشركة المهنية
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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 لهم بممارسة المهنة أو المهن محل نشاطها، على أن يخضعوا في ذلك لإشراف الشركة ومسؤوليتها.
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 203 explained in plain English
This article ensures that the professional work in the professional company is performed only by licensed persons.
1- The rule: the professional company practices the liberal profession or professions that are its activity only through licensed partners or shareholders. An unlicensed partner or shareholder, whose participation Article 200 permits in some cases, does not practice the profession in the company's name.
2- Engaging others: the company may engage in its work other persons who are licensed to practice the profession or professions that are its activity, even if they are not partners or shareholders, on condition that:
- They are licensed to practice the same profession.
- They work under the company's supervision and responsibility.
The result is that a license is a necessary condition for anyone who practices the profession through the company, whether a partner, a shareholder, or a person the company engages.
Article 204 completes this rule by providing that the professional company practices only the profession or professions that are its activity and does not engage in commercial business. To organize the company's relationship with those it engages, it is advisable to consult a lawyer specializing in companies and commercial cases.
Practical example
A professional law firm in Riyadh is owned by two licensed lawyers and an investor who is not a lawyer. The two lawyers practice the profession in the company's name, and the investor may not plead or give professional advice in its name. The company may engage a third licensed lawyer, who works under its supervision and responsibility.
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 203 of the Saudi Companies Law
Who is entitled to practice the profession in a professional company?
Licensed partners or shareholders, and the company may engage other persons licensed to practice the same profession under its supervision and responsibility.
May a professional company engage professionals who are not partners?
Yes. It may engage other persons licensed to practice the profession that is its activity, provided they are under the company's supervision and responsibility.
Does an unlicensed partner practice the profession in the company?
No. The professional company practices the profession only through licensed partners or shareholders, or the licensed persons it engages.
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 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
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.