Article 56 of the Saudi Companies Law
المادة 56 من نظام الشركات · الفصل الثالث: الشركاء في شركة التوصية البسيطة
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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 جميع الشركاء المتضامنين ومالكي أغلبية رأس المال الخاص بالشركاء الموصين، ما لم ينص عقد تأسيس الشركة على غير ذلك.
3- يجوز للشريك المتضامن أن يتنازل عن كل حصصه، أو بعضها، لمصلحة شريك موصٍ أو للغير؛ وفقًا لحكم الفقرة (2) من هذه المادة.
4- إذا لم يقدم الشريك الموصي حصته في رأس مال الشركة في ميعاد استحقاقها قبل التنازل عنها، يصبح المتنازل له مسؤولًا عن تقديمها.
5- يجوز إدخال شركاء متضامنين أو موصين إلى الشركة؛ بعد موافقة جميع الشركاء المتضامنين دون الحاجة إلى الحصول على موافقة الشركاء الموصين، وذلك ما لم ينص عقد تأسيس الشركة على غير 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 56 explained in plain English
This article sets rules on the transfer of shares and the entry of partners in a simple limited partnership company:
- Assignment by a limited partner to another partner: a limited partner may assign all or part of their shares to any of the other partners in the company, and the text requires no particular consent.
- Assignment by a limited partner to a third party: it is permitted after the approval of all the general partners and the owners of the majority of the limited partners' capital, unless the formation contract provides otherwise.
- Assignment by a general partner: they may assign all or part of their shares to a limited partner or a third party, in accordance with paragraph (2), that is, with the same approval unless the formation contract provides otherwise.
- An uncontributed share: if the limited partner did not contribute their share in the capital when it fell due before assigning it, the assignee becomes responsible for contributing it.
- Admitting new partners: general or limited partners may be admitted after the approval of all the general partners, without the need for the limited partners' approval, unless the formation contract provides otherwise.
It follows that the general partners, since they bear full liability, have the decisive say over who enters the company.
Paragraph (2) is consistent with Article 55, which uses the same standard (unanimity of the general partners and approval of the owners of the majority of the limited partners' capital) to amend the formation contract.
To draft a sound assignment or joining agreement, it is advisable to consult a lawyer specialized in company and commercial matters.
Practical example
Reem is a limited partner in a simple limited partnership in Khobar and wanted to sell her share to someone from outside the company. She must obtain the approval of all the general partners and of the owners of the majority of the limited partners' capital, unless the contract provides otherwise. If she sold it to one of the existing partners, she could do so under paragraph one.
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 56 of the Saudi Companies Law
Does a limited partner need approval to sell their share to another partner?
A limited partner may assign their shares to any of the other partners in the company, and the text requires no particular consent for that.
What approval is required to sell a share in a limited partnership to an outsider?
The approval of all the general partners and the owners of the majority of the limited partners' capital, unless the formation contract provides otherwise.
Is the limited partners' approval needed to admit a new partner?
No. The approval of all the general partners is enough, without the need for the limited partners' approval, unless the formation contract provides otherwise.
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 55
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.
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 أغلبي
- 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.