Article 245 of the Saudi Companies Law
المادة 245 من نظام الشركات · الباب الثاني عشر: انقضاء الشركة وتصفيتها
The article provides that a company is liquidated as its articles of association or bylaws provide or as the partners agree, and if there is no such provision, in accordance with the provisions of the Law.
Official text (Arabic)
This article has not been amended since the law was issued.
ما لم ينص عقد تأسيس الشركة أو نظامها الأساس، أو يتفق الشركاء أو الجمعية العامة أو المساهمون، بحسب الأحوال، على كيفية تصفية الشركة عند انقضائها، تكون التصفية وفقًا للأحكام المنصوص عليها في النظام.
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 245 explained in plain English
This article specifies the reference by which the method of liquidating a company is followed when it ends, and arranges it as follows:
- First: what the company's articles of association or bylaws provide on how liquidation is carried out.
- Or: what the partners, the general assembly or the shareholders, as the case may be, agree on this.
- If there is neither a provision nor an agreement: liquidation is carried out in accordance with the provisions of the Companies Law.
This means that a company's owners have room to regulate its liquidation method in advance in the articles of association or bylaws, or by agreement when it ends, and that the provisions of the Law apply in the absence of that. The provisions of the Law in this part set, for example, the rules for managing the company during liquidation: Article 246 provides that the authority of the manager or board ends when the company ends, while they remain in charge of its management and are treated as liquidators with respect to third parties until a liquidator is appointed.
This article does not mean that an agreement replaces the obligations set by Article 244. That article requires liquidation procedures to be taken and the statement on the sufficiency of assets to be prepared, refers a company unable to pay to the procedures of the Bankruptcy Law, and requires the Ministry's approval to liquidate a public non-profit company.
When drafting liquidation provisions in the articles of association or agreeing on them, it is wise to consult a lawyer specializing in commercial matters and companies.
Practical example
The articles of association of a limited liability company in Makkah included a clause regulating how it is liquidated when it ends. When the partners decided to dissolve it, this clause was followed in organizing the liquidation. If the contract had not contained this and the partners had not agreed on a particular method, the liquidation provisions in the Companies Law would have applied.
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 245 of the Saudi Companies Law
How is a company liquidated?
As its articles of association or bylaws provide or as the partners, the general assembly or the shareholders agree, and if there is no such provision, in accordance with the provisions of the Companies Law.
Can the partners agree on the liquidation method?
Yes. The partners, the general assembly or the shareholders, as the case may be, may agree on how the company is liquidated when it ends.
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.