Article 243 of the Saudi Companies Law
المادة 243 من نظام الشركات · الباب الثاني عشر: انقضاء الشركة وتصفيتها
The article sets three general grounds on which a company ends: expiry of its fixed term unless extended, agreement of the partners or shareholders to dissolve it, and a final court judgment dissolving it or declaring it void.
Official text (Arabic)
This article has not been amended since the law was issued.
مع مراعاة أسباب الانقضاء الخاصة بكل شكل من أشكال الشركات، تنقضي الشركة لأحد الأسباب الآتية:
أ- انتهاء المدة المحددة لها -إذا كانت محددة المدة- ما لم تمدد وفقًا لأحكام النظام.
ب- اتفاق الشركاء أو المساهمين على حلها.
ج- صدور حكم قضائي نهائي بحلّها أو بطلانها.
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 243 explained in plain English
This article sets out the general grounds on which any company ends, whatever its form, subject to the special grounds for ending that apply to each form of company; that is, these grounds are not the only ones, since the Law may add other grounds for some forms in their own places.
There are three general grounds:
- Expiry of the company's fixed term: If the company has a fixed term and it expires, the company ends, unless it is extended in accordance with the provisions of the Law. This ground does not apply to a company without a fixed term.
- Agreement of the partners or shareholders to dissolve it: This is voluntary dissolution by the will of the company's owners.
- A final court judgment dissolving it or declaring it void: The judgment must be final.
Before voluntary dissolution, Article 242 must be observed. It requires the managers or board members to prepare a statement confirming that the company's assets suffice to pay its debts and that it is not in financial distress under the Bankruptcy Law, and it bars the dissolution decision if the contrary appears.
The ending has an important effect regulated by Article 244: the company enters liquidation and keeps its legal personality to the extent needed for liquidation. A company's ending therefore does not mean its immediate disappearance, but the start of a stage of settling its rights and obligations.
To learn which ground applies to a particular company, or the special grounds for ending that apply to its form, you can consult a lawyer specializing in commercial matters and companies.
Practical example
Three partners in Dammam formed a company with a term of 10 years under its articles of association. When this term ends the company ends, unless they extend it in accordance with the provisions of the Law. If they wish to end it earlier, they may agree to dissolve it, subject to the statement on the sufficiency of assets.
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 243 of the Saudi Companies Law
What are the grounds on which a company ends under the Companies Law?
The general grounds are the expiry of the company's fixed term unless extended, the agreement of the partners or shareholders to dissolve it, and a final court judgment dissolving it or declaring it void, subject to the special grounds for ending that apply to each form.
Does a company end automatically when its term expires?
A company with a fixed term ends when its term expires unless it is extended in accordance with the provisions of the Law.
Is any court judgment enough to dissolve a company?
The article requires the court judgment dissolving the company or declaring it void to be final.
More articles on Company Liquidation
- Article 12
The article requires a company's contracts, receipts and documents to show its name, form, address, e-mail and register number, its capital and the paid-up part, and the words "under liquidation" during liquidation.
يجب أن يوضع على العقود والمخالصات وغيرها من الوثائق التي تصدرها الشركة البيانات الآتية: أ- اسم الشركة وشكلها وعنوان مركزها الرئيس وبريدها الإلكتروني -إن وجد- ور
- Article 33
Article 33 allows a partner's or shareholder's personal creditor to ask the competent judicial body to collect from the debtor's share of net distributed profits, and then from their share of the surplus on liquidation.
للدائن الشخصي للشريك أو المساهم أن يطلب من الجهة القضائية المختصة أن يتقاضى حقه من نصيب الشريك أو المساهم المدين في صافي الأرباح الموزعة. فإذا انقضت الشركة انتق
- Article 46
Article 46 regulates a partner's withdrawal from a general partnership on 60 days' notice, their removal under the contract or by court request, registering it with the commercial register, and judicial dissolution of the company.
1- ما لم ينص عقد تأسيس الشركة على غير ذلك، للشريك الانسحاب من الشركة بإرادته المنفردة بشرط إبلاغ باقي الشركاء بذلك قبل (ستين) يومًا على الأقل من التاريخ الذي حد
- Article 50
Article 50 provides that a general partnership does not end on a partner's death, interdiction, bankruptcy, or exit unless the contract says so, and regulates continuing with heirs and minors and the case of one remaining partner.
1- لا تنقضي شركة التضامن بوفاة أي من الشركاء، ولا بالحجر عليه، ولا بافتتاح أي من إجراءات التصفية تجاهه وفقًا لنظام الإفلاس، ولا بإخراجه، ولا بانسحابه، ما لم ينص
- Article 57
Article 57 provides that a simple limited partnership does not end on a limited partner's death, interdiction, insolvency, bankruptcy, or withdrawal unless the formation contract so provides.
لا تنقضي شركة التوصية البسيطة بوفاة أي من الشركاء الموصين، ولا بالحجر عليه، ولا بإعساره، ولا بافتتاح أي من إجراءات التصفية تجاهه وفقًا لنظام الإفلاس، ولا بانسحا
- Article 132
If losses reach half of the issued capital, the board of a joint-stock company must disclose this within 60 days and call the extraordinary general assembly within 180 days to decide whether to continue or dissolve.
إذا بلغت خسائر شركة المساهمة (نصف) رأس المال المصدر، وجب على مجلس الإدارة الإفصاح عن ذلك وعما توصل إليه من توصيات بشأن تلك الخسائر خلال (ستين) يومًا من تاريخ عل
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.