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Article 65 of the Saudi Companies Law

المادة 65 من نظام الشركات · الفصل الثاني: تأسيس شركة المساهمة

The article treats a joint stock company as validly incorporated once it is registered in the commercial register, and after that bars hearing any action to annul it for a violation of the Law or the articles of association.

Official text (Arabic)

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

تعد الشركة مؤسسة تأسيسًا صحيحًا بعد قيدها لدى السجل التجاري، ولا تسمع بعد ذلك الدعوى ببطلان الشركة لأي مخالفة لأحكام النظام أو لأحكام نظام الشركة الأساس.

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 65 explained in plain English

This article sets the moment incorporation of a joint stock company is complete and attaches to it an important effect concerning lawsuits.

First rule: registration is the test of valid incorporation. The company is treated as validly incorporated once it is registered in the commercial register.

Second rule: an annulment action is not heard after registration. After registration, no action to annul the company will be heard for any violation of:

  • the provisions of the Companies Law, or
  • the provisions of the company's articles of association.

The aim is to protect the stability of the company and of those who deal with it. A company that has been registered and has started dealing with banks, customers and employees is not left under threat of having its existence cancelled because of an error made at the incorporation stage. Note that the article speaks of an action to annul the company itself and does not address other kinds of actions.

This article is linked to Article 64, which prevents anyone other than the board from disposing of the amounts deposited for the shares until the company is registered in the commercial register, and allows subscribers to recover their money if the company is not registered. Registration is therefore the dividing line between the incorporation stage and the start of the company.

Anyone who objects to a violation that occurred during incorporation should consult a lawyer specialized in companies and commercial cases early.

Practical example

Two years after a joint stock company in Riyadh was registered in the commercial register, one of its shareholders discovered that one of the incorporation documents had been incomplete. He wanted to bring an action to annul the whole company, but under this article an action to annul a company is not heard after its registration for any violation of the provisions of the Law or the articles of association.

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 65 of the Saudi Companies Law

When is a joint stock company treated as validly incorporated?

It is treated as validly incorporated once it is registered in the commercial register.

Can an action be brought to annul a joint stock company after it is registered?

No. After registration, an action to annul the company will not be heard for any violation of the provisions of the Companies Law or of the company's articles of association.

What is the reason for barring annulment actions after registration?

To protect the stability of the company and of those who deal with it once its incorporation is complete through registration.

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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.