Article 246 of the Saudi Companies Law
المادة 246 من نظام الشركات · الباب الثاني عشر: انقضاء الشركة وتصفيتها
The article ends the authority of the manager or board when the company ends, while they remain in management until a liquidator is appointed, and keeps the company's assemblies and the partners' right to inspect during liquidation.
Official text (Arabic)
This article has not been amended since the law was issued.
1- تنتهي سلطة مدير الشركة أو مجلس إدارتها بانقضائها. ومع ذلك، يظل هؤلاء قائمين على إدارة الشركة، ويعدون بالنسبة إلى الغير في حكم المصفي إلى أن يُعين المصفي.
2- تبقى جمعيات الشركة قائمة خلال مدة التصفية، ويقتصر دورها على ممارسة اختصاصاتها التي لا تتعارض مع اختصاصات المصفي.
3- يبقى للشريك أو المساهم خلال مدة التصفية حق الاطلاع على وثائق الشركة المقرر له في النظام أو عقد تأسيس الشركة أو نظامها الأساس.
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 246 explained in plain English
This article answers a practical question: who manages the company after it ends and during its liquidation?
1- The manager or board: Their authority ends when the company ends. Even so, the company is not left without management; they remain in charge of its management and are treated, with respect to third parties, as liquidators, until a liquidator is appointed. Anyone dealing with the company in this period therefore deals with them in that capacity.
2- The company's assemblies: They remain in place during the liquidation period, but their role is limited to exercising their powers that do not conflict with the powers of the liquidator.
3- The partner's or shareholder's right to inspect: During liquidation they keep the right to inspect the company's documents that is granted to them by the Law or by the articles of association or bylaws; liquidation does not deprive them of following what is going on.
Article 247 provides that liquidation is carried out by one or more liquidators from among the partners or shareholders or from others, and that its period does not exceed 3 years and is not extended except by order of the competent judicial authority. As for the method of liquidation, Article 245 states that it follows the articles of association, bylaws or the partners' agreement, and otherwise the provisions of the Law.
If a dispute arises over management powers or the right to inspect during liquidation, it is advisable to consult a lawyer specializing in commercial matters and companies.
Practical example
A joint stock company in Al-Khobar ended by agreement of the shareholders, and the liquidator has not yet been appointed. During this period the board remains in charge of its management and is treated as a liquidator with respect to suppliers and customers. Any shareholder may still ask to inspect the company's documents that they have the right to inspect.
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 246 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 246 of the Saudi Companies Law
Does the authority of a company's manager end after it is dissolved?
Yes. His authority ends when the company ends, but he remains in charge of its management and is treated with respect to third parties as a liquidator until a liquidator is appointed.
Does the general assembly remain during liquidation?
The company's assemblies remain in place during the liquidation period, and their role is limited to their powers that do not conflict with the powers of the liquidator.
Does a partner have the right to inspect the company's documents during liquidation?
Yes. They keep the right to inspect granted to them by the Law, the articles of association or the bylaws.
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.