Article 209 of the Saudi Companies Law
المادة 209 من نظام الشركات · الباب الثامن: الشركة المهنية
The article makes each partner or shareholder in a professional company personally liable for his professional errors toward the company and the other partners, and makes the company liable to compensate third parties for its partners' and staff's professional errors.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يُسأل كل شريك أو مساهم في الشركة المهنية بصفة شخصية عن أخطائه المهنية تجاه الشركة وباقي الشركاء أو المساهمين، بحسب الأحوال.
2- تُسأل الشركة المهنية عن تعويض الضرر الذي يصيب الغير بسبب الأخطاء المهنية للشركاء أو المساهمين -بحسب الأحوال- أو منسوبيها.
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 209 explained in plain English
This article regulates liability for professional errors on two levels:
1- Liability of the partner or shareholder (internally): each partner or shareholder in the professional company is personally liable for his professional errors toward:
- The company.
- The other partners or shareholders, as the case may be.
A partner who commits a professional error therefore bears its consequences personally before the company and before his partners.
2- Liability of the company (toward third parties): the professional company is liable to compensate the harm suffered by third parties, such as clients, because of the professional errors of:
- The partners or shareholders, as the case may be.
- Its staff.
A person harmed by a professional error can therefore claim compensation from the company.
The article does not specify the amount of compensation or how the error is proved, and it does not address the company's recourse against staff who are not partners.
This rule is connected to Article 203, which allows the company to engage other licensed persons under its supervision and responsibility, and to Article 210, which allows the Minister to tie the professional company's practice of certain activities or dealings to obtaining insurance coverage for professional errors. Anyone harmed by a professional error or involved in a dispute over one should consult a lawyer specializing in companies and commercial cases.
Practical example
A client turned to a professional engineering consultancy in Riyadh, and one of the partner engineers made an error in the design calculations for a building, harming the client. The client may claim compensation from the company for the harm suffered. Internally, the partner engineer is personally liable for his professional error toward the company and the other partners.
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 209 of the Saudi Companies Law
Who compensates the client for a professional error in a professional company?
The professional company is liable to compensate the harm suffered by third parties because of the professional errors of its partners, shareholders or staff.
Is the partner who made the error personally liable?
Yes. Each partner or shareholder is personally liable for his professional errors toward the company and the other partners or shareholders, as the case may be.
Is the company liable for the errors of its professional employees?
Yes. The professional company is liable to compensate the harm suffered by third parties because of the professional errors of its staff.
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.