Article 42 of the Saudi Companies Law
المادة 42 من نظام الشركات · الفصل الثالث: إدارة شركة التضامن
Article 42 sets how a general partnership's manager is removed according to whether they are a partner and how they were appointed, allows removal by a final judicial judgment, and provides that removal does not dissolve the company.
Official text (Arabic)
This article has not been amended since the law was issued.
1- ما لم ينص عقد تأسيس الشركة على غير ذلك، إذا كان المدير شريكًا معينًا في عقد تأسيس الشركة فلا يجوز عزله إلا بقرار يصدر بإجماع الشركاء الآخرين، وإذا كان معينًا في عقد مستقل جاز عزله بقرار يصدر بالأغلبية العددية للشركاء.
2- إذا كان المدير من غير الشركاء، سواء كان معينًا في عقد تأسيس الشركة أو في عقد مستقل، جاز عزله بقرار يصدر بالأغلبية العددية للشركاء.
3- يجوز -بحكم نهائي من الجهة القضائية المختصة- عزل المدير المعين في عقد تأسيس الشركة أو في عقد مستقل سواء، كان من الشركاء أو من غيرهم.
4- لا يترتب على عزل المدير حل الشركة، ما لم ينص في عقد تأسيس الشركة على ذلك.
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 42 explained in plain English
This article regulates the removal of the manager of a general partnership company, and distinguishes between the following cases:
- A manager who is a partner appointed in the formation contract: they may be removed only by a resolution issued by the unanimity of the other partners, unless the formation contract provides otherwise.
- A manager who is a partner appointed in a separate contract: they may be removed by a resolution issued by the numerical majority of the partners, unless the formation contract provides otherwise.
- A manager who is not a partner: whether appointed in the formation contract or in a separate contract, they may be removed by a resolution issued by the numerical majority of the partners.
Judicial removal: the manager may be removed by a final judgment of the competent judicial body, whether appointed in the formation contract or in a separate contract, and whether they are a partner or not. The article does not state the grounds for judicial removal.
Effect of removal: removal of the manager does not result in dissolution of the company, unless the formation contract so provides.
The article connects to Article 43, which regulates the opposite case, the manager's resignation of their own will, on condition of notifying the partners in writing at least 60 days before it takes effect unless otherwise provided.
To assess the appropriate way to remove a manager in your case, it is advisable to consult a lawyer specialized in company and commercial matters.
Practical example
In a general partnership company in Makkah with four partners, one was appointed manager in the formation contract, and the contract has no special provision on removal. Two of the partners wanted to remove him, but that is not enough, since the resolution must be issued by the unanimity of the other three partners. They may still ask for his removal by a final judgment of the competent judicial body.
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 42 of the Saudi Companies Law
How is a partner who is manager appointed in the formation contract removed?
Only by a resolution of the unanimity of the other partners, unless the formation contract provides otherwise, or by a final judgment of the competent judicial body.
What majority is needed to remove a manager who is not a partner?
They may be removed by a resolution issued by the numerical majority of the partners, whether appointed in the formation contract or in a separate contract.
Is the company dissolved if its manager is removed?
Removal of the manager does not result in dissolution of the company, unless the formation contract so provides.
More articles on General Partnership
- Article 19
The article exempts micro and small companies and the general partnership company from the requirement to appoint an auditor in Article 18, with specified exceptions, and allows holders of 10% of voting rights to request that one be appointed.
1- لا يسري على الشركة متناهية الصغر والصغيرة الحكم المتعلق بإلزامية تعيين مراجع الحسابات الوارد في المادة (الثامنة عشرة) من النظام، عدا الشركة متناهية الصغر وال
- Article 35
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.
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،
- Article 36
Article 36 sets out the data the formation contract of a general partnership company must contain in particular, from the partners' names and capital to management, profits, and dissolution.
يجب أن يشتمل عقد تأسيس شركة التضامن بصفة خاصة على البيانات الآتية: أ- أسماء الشركاء، وبياناتهم. ب- اسم الشركة. ج- المركز الرئيس للشركة. د- غرض الشركة. هأ- رأس م
- Article 37
Article 37 regulates a general partnership company's management: by the partners or a manager they appoint, with rules on multiple managers, their powers, and the company's commitment to their acts within its purpose.
1- يتولى إدارة شركة التضامن الشركاء فيها، ويحدد الشخص ذو الصفة الاعتبارية ممثله في الإدارة. ويجوز أن يتفق الشركاء في عقد تأسيس الشركة أو في عقد مستقل، على تعيين
- Article 38
Article 38 makes partners' resolutions in a general partnership company by numerical majority and requires their unanimity to amend the formation contract unless the contract provides otherwise.
تصدر قرارات الشركاء بالأغلبية العددية، إلا إذا كان القرار متعلقًا بتعديل عقد تأسيس الشركة فيجب أن يصدر بإجماع الشركاء، ما لم ينصّ في عقد التأسيس على غير ذلك.
- Article 39
Article 39 bars a general partnership's manager from acts beyond the company's purpose unless the partners resolve otherwise or the formation contract expressly allows it, and lists acts to which the bar applies in particular.
يحظر على المدير أن يباشر الأعمال التي تتجاوز غرض الشركة إلا بقرار من الشركاء أو بنصّ صريح في عقد تأسيس الشركة. ويسري هذا الحظر بصفة خاصة على الأعمال الآتية: أ-
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.