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Article 61 of the Saudi Companies Law

المادة 61 من نظام الشركات · الفصل الثاني: تأسيس شركة المساهمة

The article lists what the articles of association of a joint stock company must contain and the documents attached to them when applying to incorporate the company.

Official text (Arabic)

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

1- يجب أن يشتمل النظام الأساس لشركة المساهمة بصفة خاصة على البيانات الآتية:

أ- اسم الشركة.

ب- المركز الرئيس للشركة.

ج- غرض الشركة.

د- رأس مال الشركة المصرح به -إن وجد- والمصدر والمدفوع منه.

هـ- عدد الأسهم، وأنواعها وفئاتها إن وجدت، والقيمة الاسمية والحقوق المتصلة بكل نوع أو فئة.

و- مدة الشركة، إن وجدت.

ز- إدارة الشركة، وتحديد عدد أعضاء مجلس الإدارة.

ح- تاريخ بدء السنة المالية وانتهائها.

ط- أي أحكام أو شروط أو بيانات أخرى يتفق المؤسسون أو المساهمون على تضمينها في نظام الشركة الأساس ولا تتعارض مع أحكام النظام.

2- يجب أن يرفق بالنظام الأساس عند تقديم طلب تأسيس الشركة الآتي:

أ- أسماء المؤسسين، وعناوينهم، وجنسياتهم.

ب- بيان عن الأعمال والنفقات المتوقعة لتأسيس الشركة.

ج- إقرار المؤسسين بالاكتتاب بكل أسهم الشركة المصدرة، وقيمة المدفوع منها.

د- شهادة إيداع القدر المدفوع من رأس المال المصدر لدى أحد البنوك المرخص لها في المملكة.

هـ- قرار من المؤسسين بتعيين أعضاء أول مجلس إدارة، متضمنًا أسماءهم، وجنسياتهم، وعناوينهم، وتواريخ ميلادهم، وتعيين أول مراجع حسابات في الحالات التي يلزم فيها ذلك بموجب أحكام النظام، إذا لم يكونوا قد عينوا في نظام الشركة الأساس.

و- إقرار المؤسسين بالالتزام بجميع متطلبات النظام ذات الصلة بتأسيس الشركة.

ز- تقرير مُعد من مقيّم معتمد أو أكثر يُبين فيه القيمة العادلة للحصص العينية إن وجدت، وإقرارٌ من باقي المؤسسين بالموافقة على المقابل المحدد لها.

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 61 explained in plain English

This article lists what the articles of association of a joint stock company, the document that governs the company, must contain, and then sets out what is attached to it when the incorporation application is submitted.

First: what the articles of association must contain in particular:

  • The company's name, head office and purpose.
  • The authorized capital, if any, and the issued capital and the paid-up part of it.
  • The number of shares, their types and classes if any, their nominal value, and the rights attached to each type or class.
  • The company's term, if any.
  • How the company is managed and the number of board members.
  • The start and end dates of the financial year.
  • Any other provisions agreed by the founders or shareholders, provided they do not conflict with the provisions of the Law.

Second: what is attached to the articles of association with the incorporation application:

  • The founders' names, addresses and nationalities.
  • A statement of the expected work and expenses of incorporation.
  • The founders' declaration that they have subscribed to all the issued shares, and of the amount paid.
  • A certificate of deposit of the paid portion of the issued capital with a bank licensed in the Kingdom.
  • The founders' resolution appointing the first board, with its members' details, and appointing the first auditor in the cases where that is required, if they were not appointed in the articles of association.
  • The founders' declaration that they will comply with all the incorporation requirements in the Law.
  • A report by one or more accredited valuers on the fair value of any in-kind shares, together with the other founders' declaration that they approve the consideration set for them.

This article is linked to Article 60, which allows the articles of association to set an authorized capital alongside the issued capital, and to Article 62, which requires the founders to offer for subscription the shares they have not subscribed to, in accordance with the Capital Market Law, if they have not limited subscription to themselves. To draft articles of association that suit the company, it is advisable to consult a lawyer specialized in companies and commercial cases.

Practical example

Five investors in Riyadh agreed to incorporate a joint stock company to run food factories. They prepared the articles of association including the company's name, head office, purpose, capital, number of shares, number of board members and financial year dates. When submitting the incorporation application they attached a bank certificate of deposit of the paid portion of the capital and a resolution appointing the first board. Because one of them contributed land as an in-kind share, they also attached an accredited valuer's report on its fair value, with the other founders' approval of its consideration.

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 61 of the Saudi Companies Law

What are the basic details a joint stock company's articles of association must contain?

They must contain in particular the company's name, head office and purpose, its capital, the number of shares and their types, the company's term if any, how it is managed and the number of board members, and the financial year dates.

Must the capital be deposited in a bank before applying for incorporation?

Yes. A certificate of deposit of the paid portion of the issued capital with a bank licensed in the Kingdom is attached to the incorporation application.

What if a founder contributes land or equipment instead of cash?

A report by one or more accredited valuers stating the fair value of these in-kind shares is attached, together with the other founders' declaration that they approve the consideration set for them.

Can special conditions be added to the articles of association?

Yes. They may include any provisions or conditions the founders or shareholders agree on, provided they do not conflict with the provisions of the Companies Law.

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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.