Article 222 of the Saudi Companies Law
المادة 222 من نظام الشركات · الفصل الأول: تحول الشركات
The article gives a partner or shareholder who objects to a company's conversion resolution the right to withdraw by written request within 15 days, with payment of the value of their stakes or shares.
Official text (Arabic)
This article has not been amended since the law was issued.
دون إخلال بأحكام التنازل عن الحصص أو الأسهم المقررة بحسب شكل الشركة، للشركاء أو المساهمين الذين يعترضون على قرار التحول التخارج من الشركة بناء على طلب مكتوب يقدم إليها خلال (خمسة عشر) يومًا من تاريخ صدور القرار. وفي هذه الحالة، يكون الوفاء بقيمة حصصهم أو أسهمهم وفقًا للقيمة المتفق عليها أو وفقًا لتقرير يعد من مقيم معتمد أو أكثر يُبين فيه تقديرًا للقيمة العادلة لحصصهم أو أسهمهم في تاريخ التحول، ما لم ينص عقد تأسيس الشركة أو نظامها الأساس على غير ذلك. وللمعترض في حال الخلاف اللجوء إلى الجهة القضائية المختصة.
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 222 explained in plain English
A resolution to convert a company to another form may be issued without the approval of all partners or shareholders. To protect someone who does not wish to remain in the new form, this article gives them the right to withdraw from the company.
Conditions for exercising the right:
- The partner or shareholder must have objected to the conversion resolution.
- They must submit a written request to the company.
- They must submit it within 15 days of the date the resolution was issued.
How the value of the stakes or shares is determined: They are paid for at the agreed value, or according to a report prepared by one or more accredited valuers stating their fair value at the date of conversion, unless the articles of association or bylaws provide otherwise.
In case of dispute: The objecting person may resort to the competent judicial authority.
This right applies without prejudice to the provisions on assigning stakes or shares that apply according to the form of the company, so those provisions remain in force alongside it.
It is useful to know that conversion does not create a new legal person under Article 223; the company keeps its rights and remains liable for its obligations. Because the period for objecting is short, an objecting partner is advised to consult a lawyer specializing in company matters as soon as the resolution is issued.
Practical example
The majority partners in a limited liability company in Jeddah decided to convert it into a joint stock company, and the partner Majid objected. Majid submitted a written withdrawal request to the company 10 days after the resolution was issued. He is paid for his stakes at the agreed value or according to the report of an accredited valuer at the date of conversion, and he may resort to the competent judicial authority if they disagree.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentA question about Article 222 of Companies Law?
Describe what happened and specialist lawyers answer. You can write in English.
- Completely free
- Lawyers from the directory answer
- Your name stays hidden
Commercial & Corporate Law lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Commercial & Corporate Law lawyers
Lawyers who handle this kind of case
شركة امتداد النظام للمحاماة والاستشارات المهنية
- Labour & Employment Law
- Criminal Law
- Criminal Law
- Commercial & Corporate Law
Frequently asked questions about Article 222 of the Saudi Companies Law
Can a partner leave the company if they reject its conversion?
Yes. A partner or shareholder who objects to the conversion resolution may withdraw from the company by a written request submitted to it within 15 days of the date the resolution was issued.
How is the value of an objecting partner's stake determined?
At the agreed value, or according to the report of one or more accredited valuers stating the fair value at the date of conversion, unless the articles of association or bylaws provide otherwise.
What can an objecting partner do if they disagree with the company on the value?
They may resort to the competent judicial authority.
More articles on Company Conversion and Merger
- Article 215
The article allows the partners or shareholders to convert a professional company into another form of company listed in Article 4, after meeting the conditions of the Law and the regulations.
يجوز للشركاء أو المساهمين في الشركة المهنية تحويلها إلى شكل آخر من أشكال الشركات الواردة في المادة (الرابعة) من النظام، وذلك بعد استيفاء الشروط والضوابط التي ين
- Article 220
The article regulates converting a company from one form to another, the conditions for converting to a simplified joint stock or joint stock company, and transferring sole proprietorship assets to companies.
1- يجوز تحول الشركة إلى شكل آخر من الشركات بقرار يصدر وفقًا للأوضاع المقررة لتعديل عقد تأسيسها أو نظامها الأساس وبعد استيفاء شروط التأسيس والقيد والشهر المقررة
- Article 221
The article states when a private non-profit company may convert to another form and on what conditions, and permits any company to convert to a non-profit company by unanimous consent of the partners.
1- مع مراعاة حكم الفقرة (1) من المادة (العشرين بعد المائتين) من النظام، يجوز تحول الشركة غير الربحية الخاصة دون العامة إلى أي شكل من الشركات ما لم ينص عقد تأسيس
- Article 223
The article provides that a company's conversion does not create a new legal person, so the company keeps its rights and remains liable for its pre-conversion obligations.
لا يترتب على تحول الشركة نشوء شخص ذي صفة اعتبارية جديد، وتظل الشركة محتفظة بحقوقها ومسؤولة عن التزاماتها السابقة للتحول.
- Article 224
The article provides that converting a general or simple limited partnership does not discharge the partners with joint liability from pre-conversion debts, unless the creditors expressly accept or none objects within 30 days.
لا يترتب على تحول شركة التضامن أو شركة التوصية البسيطة إلى أي شكل من أشكال الشركات، إبراء ذمة الشركاء المتضامنين من مسؤوليتهم عن ديون الشركة السابقة للتحول، إلا
- Article 225
The article sets out the two forms of company merger, what a merger proposal must contain and how it is approved, and the conditions for a valid merger and the consideration in it.
1- يكون الاندماج بضم شركة أو أكثر إلى شركة أخرى قائمة، أو بمزج شركتين أو أكثر لتأسيس شركة جديدة. 2- يجب أن يعد مقترح الاندماج للموافقة عليه من كل شركة طرف فيه و
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.