Article 55 of the Saudi Companies Law
المادة 55 من نظام الشركات · الفصل الثالث: الشركاء في شركة التوصية البسيطة
Article 55 sets how partners' resolutions are issued in a simple limited partnership unless the contract provides otherwise, and bars a limited partner from requesting dissolution or voting on appointing or removing the manager.
Official text (Arabic)
This article has not been amended since the law was issued.
1- ما لم ينص عقد تأسيس الشركة على غير ذلك، تصدر قرارات الشركاء وفق الآتي:
أ- القرارات المتعلقة بتعديل عقد التأسيس: بإجماع الشركاء المتضامنين وموافقة مالكي أغلبية رأس المال الخاص بالشركاء الموصين.
ب- القرارات الأخرى: بموافقة الأغلبية العددية لآراء الشركاء المتضامنين.
2- لا يجوز للشريك الموصي طلب حل الشركة ولا الاشتراك في التصويت على المسائل الخاصة بتعيين أو عزل مديرها.
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 55 explained in plain English
This article regulates decision-making in a simple limited partnership company and the limits of the limited partner's role in it.
1- Quorum for resolutions (unless the formation contract provides otherwise):
- Amending the formation contract: it requires the unanimity of the general partners and the approval of the owners of the majority of the limited partners' capital. The limited partners' majority here is counted by the size of the capital, not by the number of persons.
- Other resolutions: they are issued with the approval of the numerical majority of the general partners' opinions.
2- Restrictions on the limited partner: a limited partner may not:
- Request dissolution of the company.
- Take part in the vote on matters concerning appointing or removing the company's manager.
Note that the phrase "unless the company's formation contract provides otherwise" appears in the first paragraph on the quorum for resolutions, while the restrictions of the second paragraph do not carry this exception.
The idea is that the company's day-to-day management is in the hands of the general partners who bear full liability, while the limited partners are involved in decisions touching the company's foundations, such as amending its contract. This connects to Article 54, which allows a general assembly for the company by the partners' agreement in the formation contract, and to Article 56, which uses the same standard (approval of all general partners and the owners of the majority of the limited partners' capital) for assigning shares to third parties.
To review the voting provisions in your company, it is advisable to consult a lawyer specialized in company and commercial matters.
Practical example
A simple limited partnership in Jeddah has two general partners and three limited partners, and its contract has no special provision. To amend the company's purpose in the contract, the approval of both general partners together and of those who own the majority of the limited partners' capital is required. As for a resolution to remove the manager, the limited partners do not take part in voting on it.
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 55 of the Saudi Companies Law
How is the contract of a simple limited partnership amended?
By the unanimity of the general partners and the approval of the owners of the majority of the limited partners' capital, unless the formation contract provides otherwise.
Can a limited partner request dissolution of the company?
No. The article provides that a limited partner may not request dissolution of the company.
Does a limited partner vote on removing the manager?
They may not take part in the vote on matters concerning appointing or removing the company's manager.
More articles on Simple Limited Partnership
- Article 51
Article 51 defines the simple limited partnership company as having two groups of partners: general partners liable with all their assets and limited partners liable up to their shares, with general partnership rules applying where there is no provision.
1- شركة التوصية البسيطة: هي شركة تتكون من فريقين من الشركاء، فريق يضم على الأقل شريكًا من ذوي الصفة الطبيعية أو الاعتبارية يكون مسؤولًا شخصيًّا في جميع أمواله و
- Article 52
Article 52 sets out the data a simple limited partnership's formation contract must contain in particular, such as the partners' names, capital, management, resolutions, profits, and dissolution.
يجب أن يشتمل عقد تأسيس شركة التوصية البسيطة بصفة خاصة على البيانات الآتية: أ- أسماء الشركاء، وبياناتهم. ب- اسم الشركة. ج- المركز الرئيس للشركة. د- غرض الشركة. ه
- Article 53
Article 53 gives a limited partner the right to inspect and examine records twice a year, bars them from external management on pain of full liability, and allows internal management as the formation contract provides.
1- يجوز للشريك الموصي -أو من يفوّضه- أن يطلع مرتين خلال السنة المالية على سير أعمال الشركة، وأن يفحص سجلاتها ووثائقها، وأن يستخرج بيانًا موجزًا عن حالة الشركة ا
- Article 54
Article 54 allows the general and limited partners to agree in the formation contract that a simple limited partnership will have a general assembly and to set its competences and meeting procedures.
يجوز للشركاء المتضامنين والموصين الاتفاق في عقد تأسيس الشركة على أن يكون للشركة جمعية عامة، وتحديد اختصاصاتها، وإجراءات انعقادها.
- Article 56
Article 56 regulates assignment of shares by limited and general partners in a simple limited partnership, the consent needed to assign to third parties, the assignee's duty to contribute an unpaid share, and admitting new partners.
1- يجوز للشريك الموصي أن يتنازل عن كل حصصه أو بعضها لأي من الشركاء الآخرين في الشركة. 2- يجوز للشريك الموصي أن يتنازل عن كل حصصه، أو بعضها، للغير؛ بعد موافقة جم
- 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
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.