Article 98 of the Saudi Companies Law
المادة 98 من نظام الشركات · الفرع الثاني: جمعيات المساهمين
Article 98 gives the sole founder or owner of all a joint stock company's shares the powers of the shareholders' assemblies, so that their resolutions are issued in writing without calling an assembly and recorded in the special register.
Official text (Arabic)
This article has not been amended since the law was issued.
في حال تأسيس شركة المساهمة من شخص واحد، أو إذا آلت جميع أسهمها إلى شخص واحد، يكون لهذا الشخص صلاحيات وسلطات جمعيات المساهمين المنصوص عليها في هذا الباب، وتصدر قراراته كتابة، دون الحاجة إلى دعوة الجمعية العامة. وتدون تلك القرارات في السجل الخاص المنصوص عليه في المادة (السابعة والتسعين) من النظام.
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 98 explained in plain English
This article deals with the case of a single-owner joint stock company, where there is no point in calling an assembly attended by only one shareholder.
When does it apply? In two cases:
- If the joint stock company was formed by one person.
- If all its shares later pass to one person, for example where one of the shareholders buys the others' shares.
What is the rule?
- That person has the powers and authorities of the shareholders' assemblies stated in this Part.
- Their resolutions are issued in writing, without the need to call the general assembly, so the call and quorum procedures do not apply.
- These resolutions are recorded in the special register mentioned in Article 97, the register in which the minutes of assembly meetings are recorded.
The text thus combines facilitation and documentation: the sole owner does not bear the burden of calling and holding a meeting, but their resolutions remain written and kept in the company's register, so they can be consulted to know what was decided and when. The article does not address other provisions specific to this type of company. Anyone who wants to form a joint stock company alone or take over all the shares of an existing one may consult a lawyer specialized in company and commercial matters.
Practical example
Khalid bought all the shares of an unlisted joint stock company in Riyadh from his partners, becoming its sole owner. When he wanted to approve the financial statements and appoint new board members, he did not need to call a general assembly; he issued his resolutions in writing and recorded them in the register of assembly minutes.
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 98 of the Saudi Companies Law
Can a joint stock company be formed by one person?
The article refers to the case of a joint stock company formed by one person, and gives them the powers and authorities of the shareholders' assemblies.
Does the sole shareholder need to hold a general assembly?
No. Their resolutions are issued in writing without the need to call the general assembly.
Where are the sole shareholder's resolutions kept?
They are recorded in the special register mentioned in Article 97, in which the minutes of assembly meetings are recorded.
Articles this article refers to
More articles on Joint Stock Company
- Article 58
Article 58 defines the joint stock company as formed by one or more persons, with capital divided into tradable shares, liable alone for its debts, with a shareholder's liability limited to the value of the shares subscribed.
شركة المساهمة: هي شركة يؤسسها شخص واحد أو أكثر، من ذوي الصفة الطبيعية أو الاعتبارية، ويكون رأس مالها مقسمًا إلى أسهم قابلة للتداول، وتكون الشركة وحدها مسؤولة عن
- Article 59
Article 59 requires a joint stock company's issued capital to be at least SAR 500,000, with not less than one quarter paid at formation.
يجب ألا يقلّ رأس مال شركة المساهمة المصدر عن (خمسمائة ألف) ريال، ويجب ألا يقلّ المدفوع منه عند التأسيس عن (الربع).
- Article 60
Article 60 states that a joint stock company has an issued capital representing subscribed shares and may have an authorized capital, within which the board may increase the issued capital once it has been paid in full.
1- يكون لشركة المساهمة رأس مال مصدر يمثل الأسهم المكتتب بها، ويجوز أن يحدد نظام الشركة الأساس رأس مال مصرحًا به. 2- يجوز بقرار من مجلس إدارة الشركة زيادة رأس ال
- Article 61
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.
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 -
- Article 62
The article requires the founders, if they do not subscribe to all the company's shares themselves during incorporation, to offer the remaining shares for subscription in accordance with the Capital Market Law.
إذا لم يقصر المؤسسون خلال مرحلة التأسيس الاكتتاب بجميع الأسهم على أنفسهم، وجب عليهم طرح الأسهم التي لم يكتتبوا بها للاكتتاب وفقًا لنظام السوق المالية.
- Article 63
The article gives the Ministry and the Authority the power to set the controls, procedures, documents and approvals for incorporating a joint stock company whose shares are offered for public subscription during incorporation or which is listed on the capital market.
للوزارة والهيئة وضع الضوابط والإجراءات وتحديد الوثائق والموافقات اللازمة لتأسيس شركة مساهمة تطرح أسهمها للاكتتاب العام خلال مرحلة التأسيس أو تدرج في السوق المال
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.