Article 21 of the Saudi Companies Law
المادة 21 من نظام الشركات · الفصل الثاني: مالية الشركة
Article 21 confirms the right of partners and shareholders to oversee the company's accounts in accordance with the Companies Law and the formation contract or bylaws.
Official text (Arabic)
This article has not been amended since the law was issued.
للشركاء والمساهمين حق الرقابة على حسابات الشركة وفقًا للأحكام المنصوص عليها في النظام وعقد تأسيس الشركة أو نظامها الأساس.
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 21 explained in plain English
This article states a general principle: partners and shareholders have the right to oversee the company's accounts.
But the article does not leave this right unrestricted; it ties its exercise to two references:
- The provisions of the Companies Law: that is, the details set out in the Companies Law according to the company's form.
- The formation contract or bylaws: that is, what the partners agreed or what the company's bylaws provide.
The practical meaning is that a partner or shareholder does not need management's permission to have this right in principle, but the way it is exercised, such as timing, means, and limits of inspection, is governed by the specific provisions of the law and the company's founding document. The article itself does not detail this method.
This right complements the auditor's role under Article 20, where the auditor gives the partners, the general assembly, or the shareholders a report on the financial statements and their opinion on whether they are fairly presented; the auditor is independent professional oversight, while the partners' right is oversight by the interested parties themselves. Article 22 then regulates the distribution of profits.
Anyone prevented from exercising their right of oversight would do well to review the formation contract or bylaws and consult a lawyer specialized in companies.
Practical example
Haifa holds a share in a limited liability company in Riyadh and wishes to inspect the company's accounts. This article gives her the right to oversee the accounts, which she exercises in accordance with the provisions of the Companies Law and the company's formation contract.
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 21 of the Saudi Companies Law
Does a partner have the right to oversee the company's accounts?
Yes. Partners and shareholders have the right to oversee the company's accounts in accordance with the Companies Law and the formation contract or bylaws.
How does a partner exercise their right to oversee the accounts?
In accordance with the provisions of the Companies Law and the company's formation contract or bylaws; the article does not detail the method.
More articles on Company Management and Managers' Liability
- Article 11
The article allows founders, partners and shareholders to conclude agreements regulating their relationship, and a family charter for family companies, and makes them binding provided they do not contravene the Law or the company's founding document.
1- يجوز للمؤسسين أو الشركاء أو المساهمين -سواء خلال مدة تأسيس الشركة أو بعدها- ما يأتي: أ- إبرام اتفاق أو أكثر ينظم العلاقة فيما بينهم أو مع الشركة، بما في ذلك
- Article 16
Article 16 sets a company's financial year at twelve months fixed by the formation contract or bylaws, with the first financial year allowed to run between 6 and 18 months from registration.
تكون السنة المالية للشركة (اثني عشر) شهرًا تُحدد في عقد تأسيسها أو نظامها الأساس. ومع ذلك، يجوز أن تحدد السنة المالية الأولى بما لا يقلّ عن (ستة) أشهر ولا يزيد
- Article 17
Article 17 requires keeping accounting records, preparing annual financial statements and filing them within 6 months of the end of the financial year, and supplying a controlling company with the information it needs.
1- على الشركة الاحتفاظ بالسجلات المحاسبية والمستندات المؤيدة لها لتوضيح أعمالها وعقودها وقوائمها المالية في مركز الشركة الرئيس أو في أي مكان آخر يحدده مدير الشر
- Article 18
Article 18 requires a company to have a licensed auditor appointed by the partners, general assembly, or shareholders, and regulates the auditor's removal, with notice to the competent authority within 5 days, and resignation by reasoned written notice.
1- يكون للشركة مراجع حسابات (أو أكثر) من المراجعين المرخص لهم في المملكة يعينه ويحدد أتعابه ومدة عمله ونطاقه الشركاء أو الجمعية العامة أو المساهمون بحسب الأحوال
- Article 19
The article exempts micro and small companies and the general partnership company from the requirement to appoint an auditor in Article 18, with specified exceptions, and allows holders of 10% of voting rights to request that one be appointed.
1- لا يسري على الشركة متناهية الصغر والصغيرة الحكم المتعلق بإلزامية تعيين مراجع الحسابات الوارد في المادة (الثامنة عشرة) من النظام، عدا الشركة متناهية الصغر وال
- Article 20
The article sets the auditor's obligations: independence and the bar on combining roles or conflicts, his right to inspect company documents, submitting his report to the partners or general assembly, keeping secrets, and liability for his errors.
1- يجب أن يتصف مراجع حسابات الشركة بالاستقلال وفقًا لما تحدده المعايير المهنية المعتمدة في المملكة. 2- لا يجوز الجمع بين عمل مراجع الحسابات والاشتراك في تأسيس ا
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.