Article 35 of the Saudi Companies Law

المادة 35 من نظام الشركات · الفصل الأول: أحكام عامة

Article 35 defines the general partnership company as one formed by two or more persons, each personally and jointly liable with all their assets for its debts, and in which the partner acquires the status of a merchant.

Official text (Arabic)

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

شركة التضامن: هي شركة يؤسسها شخصان أو أكثر من ذوي الصفة الطبيعية أو الاعتبارية يكونون فيها مسؤولين شخصيًّا في جميع أموالهم وبالتضامن عن ديون الشركة والتزاماتها، ويكتسب الشريك فيها صفة التاجر.

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 35 explained in plain English

This article sets out the meaning of the general partnership company and its basic characteristics:

Number of founders: it is formed by two or more persons, so it cannot exist with a single partner.
Status of the partners: they may be natural persons (individuals) or legal persons (such as companies).
Liability: each partner is personally liable with all their assets for the company's debts and obligations, and jointly with the other partners. Their liability does not stop at their share in the capital but extends to their private assets.
Status of merchant: the partner in it acquires the status of a merchant.

This personal and joint liability is the most important feature of the general partnership company, so anyone thinking of joining one should understand that their personal assets may be exposed to claims for the company's debts, as the provisions of the Companies Law determine.

Article 36 then sets out the data that the formation contract of a general partnership company must contain in particular, such as the names of the partners, the company name, its principal center, its purpose, its capital, its management, and the distribution of profits and losses.

Choosing the suitable form for a company depends on the partners' circumstances and activity, so it is advisable to consult a lawyer specialized in company and commercial matters before formation.

Practical example

The brothers Saad and Nasser agreed to form a general partnership company for trading in building materials in Qassim. Under this article each of them becomes a merchant, and each is personally liable with all their assets and jointly with his brother for the company's debts and obligations, not only up to his share in the capital.

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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