Article 234 of the Saudi Companies Law
المادة 234 من نظام الشركات · الفصل الثالث: تقسيم الشركات
The article refers to the regulations to set the controls for dividing a company, including its procedures, arrangements and conditions, according to the company's form.
Official text (Arabic)
This article has not been amended since the law was issued.
تحدد اللوائح الضوابط المتعلقة بتقسيم الشركة بما في ذلك الإجراءات والأوضاع والشروط التي يجب توافرها للتقسيم وذلك بحسب شكل الشركة.
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 234 explained in plain English
This is a referral article that completes the provisions on company division. It provides that the regulations set the controls relating to the division of a company, including:
- The procedures that must be followed for the division.
- The arrangements under which it takes place.
- The conditions that must be met for the division.
The article provides that these controls are set according to the company's form, that is, what applies to dividing a joint stock company may differ from what applies to dividing a limited liability company or a general partnership, as the regulations provide. The article itself does not state the content of these controls.
This referral comes alongside what the Law itself provides directly on the subject, including Article 233, which makes a company arising from a division the successor of the company being divided to the extent of what passed to it under the division decision, and allows creditors of the company being divided to claim against the resulting companies jointly, unless it is agreed with them that their rights pass to the company to which the debts passed.
Anyone planning to divide a company should therefore consult both the provisions of the Law and the regulations, and is advised to use a lawyer specializing in company matters to verify that the conditions specific to their company's form are met.
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 234 of the Saudi Companies Law
Where can I find the conditions and procedures for dividing a company?
This article refers to the regulations to set the controls relating to dividing a company, including the procedures, arrangements and conditions.
Do the conditions for division differ according to the company's form?
Yes. The article provides that the regulations set these controls according to the company's form.
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 222
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.
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 يقد
- 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
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.