Article 96 of the Saudi Companies Law
المادة 96 من نظام الشركات · الفرع الثاني: جمعيات المساهمين
Article 96 regulates preparing the general assembly agenda, holders of 10% of voting shares' right to add items, and each shareholder's right to discuss and put questions to the board and the auditor.
Official text (Arabic)
This article has not been amended since the law was issued.
1- على مجلس الإدارة عند إعداد جدول أعمال الجمعية العامة أن يأخذ في الاعتبار الموضوعات التي يرغب المساهمون في إدراجها. ويحق لمساهم أو أكثر يمثلون (عشرة في المائة) من أسهم الشركة التي لها حقوق تصويت على الأقل إضافة موضوع أو أكثر إلى جدول الأعمال عند إعداده، وللجهة المختصة تعديل هذه النسبة.
2- على مجلس الإدارة إفراد كل موضوع من الموضوعات المدرجة على جدول أعمال الجمعية العامة في بند مستقل، وعدم الجمع بين الموضوعات المختلفة جوهريًّا تحت بند واحد، وعدم وضع الأعمال والعقود التي يكون لأي من أعضاء مجلس الإدارة مصلحة مباشرة أو غير مباشرة فيها ضمن بند واحد بغرض التصويت على البند كاملًا.
3- لكل مساهم حق مناقشة الموضوعات المدرجة في جدول أعمال الجمعية العامة وتوجيه الأسئلة في شأنها إلى أعضاء مجلس الإدارة ومراجع الحسابات. ويعد باطلًا كل نص في نظام الشركة الأساس يحرم المساهم من هذا الحق. ويجيب مجلس الإدارة أو مراجع الحسابات عن أسئلة المساهمين بالقدر الذي لا يعرض مصلحة الشركة للضرر. فإذا رأى أحد المساهمين أن الرد على سؤاله غير كافٍ، احتكم إلى الجمعية العامة، وكان قرارها في هذا الشأن نافذًا.
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 96 explained in plain English
This article protects shareholders' right to actual participation in the general assembly through three provisions:
1- Preparing the agenda
- The board of directors must take into account the topics shareholders wish to include.
- One or more shareholders representing at least 10% of the shares with voting rights are entitled to add one or more topics to the agenda when it is prepared, and the competent authority may modify this percentage.
2- Organizing the items
- Each topic is set out in a separate item, and topics that are substantially different are not grouped under one item.
- Business and contracts in which any board member has a direct or indirect interest are not placed under a single item for the purpose of voting on them as a whole.
3- The right to discuss and ask questions
- Every shareholder has the right to discuss the agenda topics and put questions about them to the board members and the auditor.
- Any provision in the company's bylaws that deprives the shareholder of this right is void.
- The board or the auditor answers to the extent that does not expose the company's interest to harm.
- If the shareholder considers the answer insufficient, they may appeal to the general assembly, whose decision on that is effective.
This rule complements Article 95, which bars board members from voting on business and contracts in which they have an interest. Anyone who believes their right to have an item included or to ask questions has been disregarded may consult a lawyer specialized in company and commercial matters.
Practical example
Ahmed and two friends hold 12% of the voting shares in a joint stock company in Riyadh, and they wanted to discuss the profit distribution policy at the next general assembly. They asked for the topic to be added to the agenda when it was prepared, and because their percentage exceeds 10%, they were entitled to that. At the meeting Ahmed asked the auditor about an item in the financial statements, and, finding the answer insufficient, appealed to the general assembly, which issued its decision on the matter.
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 96 of the Saudi Companies Law
Can a shareholder add a topic to the general assembly agenda?
One or more shareholders representing at least 10% of the company's shares with voting rights may do so when the agenda is prepared, and the competent authority may modify this percentage.
Can the bylaws bar a shareholder from asking questions?
No. Any provision in the bylaws that deprives the shareholder of the right to discuss and put questions to the board members and the auditor is void.
What do I do if the board's answer to my question is insufficient?
The shareholder appeals to the general assembly, and its decision on this matter is effective.
Can several contracts of board members be voted on at once?
No. Business and contracts in which any member has an interest must not be placed under a single item for the purpose of voting on them as a whole.
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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.