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Article 86 of the Saudi Companies Law

المادة 86 من نظام الشركات · الفرع الثاني: جمعيات المساهمين

The article allows the extraordinary general assembly, in addition to its own powers, to issue resolutions on matters of the ordinary general assembly on the same conditions and procedures set for the ordinary assembly.

Official text (Arabic)

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

للجمعية العامة غير العادية -فضلًا عن الاختصاصات المقررة لها بموجب أحكام النظام- أن تصدر قرارات في الأمور الداخلة أصلًا في اختصاصات الجمعية العامة العادية، وذلك بالشروط والأوضاع ذاتها المقررة للجمعية العامة العادية.

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 86 explained in plain English

A joint stock company has two kinds of general assembly, the ordinary and the extraordinary, each with its own powers. This article deals with the overlap between them.

The provision: The extraordinary general assembly may, in addition to its powers set out in the Law, issue resolutions on matters that originally fall within the powers of the ordinary general assembly.

The condition: This must be done on the same conditions and procedures set for the ordinary general assembly. That is, a resolution on a matter of the ordinary assembly is subject to what it would be subject to if it were issued by the ordinary assembly itself.

The practical benefit: If the extraordinary assembly meets to consider a matter within its powers, such as amending the articles of association, it can in the same meeting take resolutions that are within the ordinary assembly's powers, without the need to hold a separate meeting.

According to the text of this article the rule does not work in the opposite direction; it gives the extraordinary assembly an additional power and gives the ordinary assembly none of the extraordinary assembly's powers.

This article sits between Article 85, which sets the extraordinary assembly's powers, such as amending the articles of association, deciding on dissolution and approving the company's purchase of its own shares, and Article 87, which gives the ordinary assembly all matters relating to the company except those within the extraordinary assembly's powers, such as electing and removing board members and appointing the auditor. To determine which assembly is competent for a particular resolution and its conditions, it is advisable to consult a lawyer specialized in companies.

Practical example

A joint stock company in Riyadh called an extraordinary general assembly to amend its articles of association. In the same meeting it wanted to elect a replacement board member, which is a matter for the ordinary assembly. The extraordinary assembly may take this resolution, provided the same conditions and procedures set for the ordinary general assembly are observed.

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 86 of the Saudi Companies Law

Can the extraordinary general assembly take the ordinary assembly's resolutions?

Yes. It may do so in addition to its powers, on the same conditions and procedures set for the ordinary general assembly.

Can the ordinary assembly amend the articles of association?

This article gives the ordinary assembly none of the extraordinary assembly's powers, and amending the articles of association is within the extraordinary assembly's powers under Article 85.

What is the practical benefit of this article?

It lets the company take resolutions that fall within the ordinary assembly's powers at the meeting of the extraordinary assembly without holding a separate meeting, while observing the ordinary assembly's conditions.

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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.