Article 250 of the Saudi Companies Law

المادة 250 من نظام الشركات · الباب الثاني عشر: انقضاء الشركة وتصفيتها

The article provides that the liquidator is removed in the way he was appointed, and allows the competent judicial authority to remove him at the request of partners, shareholders or creditors for acceptable reasons, with a replacement appointed.

Official text (Arabic)

This article has not been amended since the law was issued.

1- يعزل المصفي بالطريقة التي عُين بها. وفي جميع الأحوال، يجوز للجهة القضائية المختصة، بناء على طلب أي من الشركاء أو المساهمين أو دائني الشركة لأسباب مقبولة، أن تقضي بعزله.

2- يجب أن يشمل القرار أو الحكم بعزل المصفي تعيين من يحل محله وتحديد سلطاته وأتعابه.

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 250 explained in plain English

This article regulates removing the liquidator before his task ends, and sets two routes for this:

1- Removal in the same way he was appointed: If the partners, the general assembly or the shareholders appointed him, his removal is by a decision from them in the same way, and if the judicial authority appointed him, his removal is by it.

2- Judicial removal in all cases: The competent judicial authority may rule to remove the liquidator at the request of any of:

the partners or shareholders;
the company's creditors.

The request must be made for acceptable reasons. The article does not specify these reasons, so assessing them is for the judicial authority. The importance of this route is that it is available even if the liquidator was appointed by the partners, so it protects the minority and the creditors.

Content of the removal decision: The decision or judgment removing the liquidator must include appointing his replacement and fixing his powers and fees, so that the liquidation is not left without anyone to carry it out.

This article is linked to Article 249, which requires the liquidator to register and publish his appointment decision with the commercial register, and his appointment may not be invoked against third parties except from the date of registration and publication. It is also linked to Article 251, which regulates the work of liquidators if there are several.

To assess whether the reasons for a removal request are acceptable in a particular case, it is advisable to consult a lawyer specializing in commercial matters and companies.

Practical example

A creditor of a company in liquidation in Riyadh noticed that the liquidator was delaying his work without justification. The creditor may ask the competent judicial authority to remove him if he gives acceptable reasons, and if it rules to remove him, the judgment must include appointing a replacement liquidator and fixing his powers and fees.

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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