Article 257 of the Saudi Companies Law
المادة 257 من نظام الشركات · الباب الثاني عشر: انقضاء الشركة وتصفيتها
The article provides that liquidation ends when the authority that appointed the liquidator approves his detailed financial report, requires him to register and publish its end, and it is not effective against third parties until the registration is cancelled.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يقدم المصفي عند انتهاء أعمال التصفية تقريرًا ماليًّا تفصيليًّا عما قام به من أعمال. وتنتهي التصفية بموافقة الجهة التي عينت المصفي على هذا التقرير.
2- يجب على المصفي قيد وشهر انتهاء التصفية لدى السجل التجاري. ولا يعتد بانتهاء التصفية في مواجهة الغير إلا من تاريخ شطب قيد الشركة من السجل التجاري.
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 257 explained in plain English
This article regulates the last step in liquidation.
1- The final report: When the liquidation work ends, the liquidator submits a detailed financial report on the work he has done. Liquidation does not end merely because the liquidator has finished his work, but when the authority that appointed him approves this report, whether that is the partners, the general assembly, the shareholders or the judicial authority, depending on who appointed him.
2- Registration, publication and cancellation: The liquidator must register and publish the end of liquidation with the commercial register. The end of liquidation may not be invoked against third parties except from the date the company's registration is cancelled from the commercial register.
Article 258 makes the liquidator liable for compensating harm resulting from his exceeding his powers or from his errors.
If the company is non-profit, Article 256 specifies to whom its net assets go on liquidation.
Anyone who has comments on the liquidator's final report before it is approved may consult a lawyer specializing in commercial matters and companies.
Practical example
The liquidator of a company in Jeddah finished selling its assets, paying its debts and distributing the surplus to the partners. He submitted a detailed financial report to the partners who had appointed him, and they approved it, and he then registered and published the end of liquidation with the commercial register. The end of liquidation may not be invoked against third parties until the company's registration is cancelled.
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 257 of the Saudi Companies Law
When does a company's liquidation officially end?
Liquidation ends when the authority that appointed the liquidator approves his detailed financial report, and its end may not be invoked against third parties except from the date the company's registration is cancelled from the commercial register.
Must the liquidator register the end of liquidation?
Yes. He must register and publish the end of liquidation with the commercial register.
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.