Article 5 of the Saudi Companies Law

المادة 5 من نظام الشركات · الفصل الأول: تأسيس الشركة

The article regulates a company's trade name: its language and sources, the former partner's consent to the use of his name, the indication of the company's form, and amendment of the name without affecting its rights and obligations.

Official text (Arabic)

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

1- يكون لكل شركة اسم تجاري باللغة العربية أو بلغة أخرى، ويجوز أن يكون الاسم مشتقًا من غرضها، أو اسمًا مميزًا، أو اسم واحد أو أكثر من الشركاء أو المساهمين فيها الحاليين أو السابقين، أو منها معًا، مع مراعاة ألا يكون مخالفًا لنظام الأسماء التجارية والأنظمة الأخرى واللوائح المعمول بها في المملكة.

2- يجب الحصول على موافقة الشريك أو المساهم، أو ورثته إذا توفي ولم يوافق، وذلك في الحالة التي يشتمل فيها الاسم التجاري على أيّ من أسماء الشركاء أو المساهمين السابقين في الشركة.

3- يجب أن يقترن بالاسم التجاري ما يبين شكل الشركة.

4- يجوز تعديل الاسم التجاري للشركة وفقًا للأوضاع المقررة لتعديل عقد تأسيس الشركة أو نظامها الأساس، ولا يترتب على التعديل المساس بحقوق الشركة أو التزاماتها أو الإجراءات النظامية التي اتخذتها أو اتخذت في مواجهتها قبل التعديل.

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 5 explained in plain English

This article sets out the rules for the company's trade name in four paragraphs:

Language and source: every company has a trade name in Arabic or in another language. It may be derived from its purpose, be a distinctive name, be the name of one or more current or former partners or shareholders, or be a combination of these, provided it does not contravene the Trade Names Law, other laws and the applicable regulations.
Names of former partners: if the name includes the name of a former partner or shareholder, his consent must be obtained, or the consent of his heirs if he has died without having consented.
Indication of the form: the name must be accompanied by an indication of the company's form, that is, one of the forms in Article 4.
Amending the name: it may be amended in accordance with the procedures set for amending the founding contract or the articles of association. The amendment does not affect the company's rights or obligations, or the legal proceedings it took, or that were taken against it, before the amendment.

The practical meaning of the last paragraph is that changing the name does not create a new company; existing contracts, debts and lawsuits remain in place. Anyone in a dispute over the use of a former partner's name would do well to consult a lawyer specializing in companies and commercial cases.

Practical example

Fahd withdrew from a company that carried his name, and the partners wanted to keep the name. This article requires Fahd's consent, or the consent of his heirs if he has died without consenting. If they later changed the name, the company's contracts and earlier obligations would stay as they are.

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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