Article 210 of the Saudi Companies Law
المادة 210 من نظام الشركات · الباب الثامن: الشركة المهنية
The article allows the Minister, by decision and after coordinating with the body supervising the profession, to tie a professional company's practice of certain activities or dealings to obtaining insurance coverage for professional errors.
Official text (Arabic)
This article has not been amended since the law was issued.
للوزير -بقرار منه- أن يقرن ممارسة الشركة المهنية لأنشطة أو تعاملات معينة بالحصول على تغطية تأمينية للأخطاء المهنية، وذلك بعد التنسيق مع الجهة أو الجهات المعنية نظامًا بالإشراف على ممارسة المهنة.
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 210 explained in plain English
This article deals with insurance against professional errors for professional companies. It does not impose insurance directly on all companies but gives the Minister the power to impose it in certain cases.
Elements of the rule:
- Who holds the power: the Minister, by decision.
- Content of the power: to tie the professional company's practice of certain activities or dealings to obtaining insurance coverage for professional errors.
- The procedural condition: that this be after coordinating with the body or bodies legally responsible for supervising the practice of the profession.
What does this mean in practice? If the Minister issues a decision concerning a particular activity or dealing, the professional company may not practice that activity or dealing until it has obtained the required insurance coverage. As for anything a decision does not cover, the article does not itself impose insurance on it.
The article does not specify the activities covered or the limits or amount of coverage; these will be known from the Minister's decision when it is issued.
The article is linked to Article 209, which makes the professional company liable to compensate the harm suffered by third parties because of the professional errors of its partners, shareholders or staff, and insurance is a means of covering that liability. It is also linked to Article 211, which regulates the effect of a partner or shareholder losing the license to practice his profession. To find out whether your company's activity is covered by a decision of this kind, it is advisable to consult a lawyer specializing in companies and commercial cases.
Practical example
A professional medical company in Jeddah provides specialized treatment services. If the Minister, after coordinating with the body supervising the profession, issues a decision tying the practice of this type of service to obtaining insurance against professional errors, the company must obtain this insurance coverage in order to practice those services.
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 210 of the Saudi Companies Law
Is insurance against professional errors mandatory for professional companies?
The Minister may, by decision, tie a professional company's practice of certain activities or dealings to obtaining insurance coverage for professional errors, so insurance is required for what the decision covers.
Who decides to impose insurance on professional companies?
The Minister, by decision, after coordinating with the body or bodies legally responsible for supervising the practice of the profession.
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.