In force Last amended 22/10/1442 AH
Saudi Cooperative Societies Law
نظام الجمعيات التعاونية
The law governing cooperative societies. The text is set out in 44 articles.
- Articles
- 44
- In force
- 39
- Amended
- 5
- Issued
- 1/1/1429 AH
Issued by: مرسوم ملكي رقم م/14 بتاريخ 10 / 3 / 1429 · قرار مجلس الوزراء رقم 73 بتاريخ 9 / 3 / 1429
Each article shows the official Arabic text, which is the only legally binding version, followed by our plain-English explanation.
Browse Cooperative Societies Law by topic
Definition of the Cooperative Society and General Provisions6 articlesEstablishing and Registering the Cooperative Society7 articlesCooperative Society Membership and Shares5 articlesCooperative Society Board of Directors7 articlesCooperative Society Accounts and Audit2 articlesGeneral Assembly of the Cooperative Society5 articlesSociety Resources and Profit Distribution2 articlesCouncil of Cooperative Societies1 articleSubsidies and Facilities for Cooperative Societies1 articleOversight of Cooperative Societies1 articleDissolving and Liquidating the Cooperative Society5 articles
Articles of the Saudi Cooperative Societies Law
الباب الأول: أحكام عامةArticles 1–12
- Article 1The article defines the key terms in the Cooperative Societies Law, including the Ministry, the society, the general assembly, the board of directors, the member and the Regulations.
- Article 2The article defines a cooperative society as one formed by individuals to improve its members' economic and social condition by following cooperative principles, and requires its name to indicate its cooperative character and the type of its work.
- Article 3The article requires a society to have at least twelve individuals and caps each member's holding at 10% of capital, with establishment by at least five members allowed exceptionally with a 20% cap.
- Article 4The article provides that a cooperative society acquires legal personality on completing registration, announcement and publication in two local newspapers, and may set up branches with a Ministry license under the Regulations' controls.
- Article 5The article makes the share price fixed and indivisible and regulates a withdrawing member's assignment or redemption of shares, loss of membership and expulsion, and heirs taking a deceased member's place.
- Article 6The article bars attaching a society's funds except to satisfy its debts under a court judgment, and limits a member's liability for the society's rights and obligations to the shares he owns.
- Article 7The article provides that the door of membership in a cooperative society is open to those who meet the membership conditions, except in exceptional cases set by the Regulations.
- Article 8The article identifies the society's founders and their task of preparing the preliminary founding contract and basic regulations, makes them jointly bear founding expenses, repaid from capital after registration, with no recourse if the society cannot be formed.
- Article 9The article sets the particulars a cooperative society's founding contract must contain, such as date of drafting, founders' names, the society's name, seat, type, purposes, capital and nominal share value.
- Article 10The article requires every cooperative society to have basic regulations that include in particular the society's particulars, capital, membership conditions, board of directors, general assembly, profits and dissolution.
- Article 11The article requires a society's founders to apply to the Ministry for registration, attaching seven documents, including the feasibility study, the founding contract, the basic regulations and the receipt for depositing the share value.
- Article 12The article governs the Ministry's review of registration documents and announcement or refusal within 60 days, failing which the announcement is deemed to have taken place, and gives the founders the right to appeal a refusal to the Minister within 60 days.
الباب الثاني: إدارة الجمعيات التعاونيةArticles 13–26
- Article 13The article requires every society to have a board of directors of at least five members elected by the general assembly to manage it within its purposes and regulations, with the founders appointing the first board for three years.
- Article 14The article sets the board of directors' term at four years, renewable, bars pay for its members, and allows the general assembly to grant a bonus of up to 10% of annual profits after the statutory deductions.
- Article 15The article requires the board, when a member's seat falls vacant for any reason, to add the reserve member who obtained the most votes in the general assembly's ballot, to complete the board's remaining term.
- Article 16The article requires the board of directors of a cooperative society to elect from among its members, at its first meeting, a chairman, a vice-chairman, a board secretary and a treasurer.
- Article 17The article requires a majority of the board's members to attend for its meeting to be valid, with decisions made by an absolute majority of those present and the side the chair of the meeting voted with prevailing in a tie.
- Article 18The article gives the board continuous supervision of the society's work and oversight of those who manage it, and gives its chairman the right to sign for and represent the society before others and the courts, with the right to delegate and appoint agents.
- Article 19The article authorizes the Minister to issue ministerial decisions regulating the audit of cooperative societies, subject to the laws on accountants in force.
- Article 20The article requires the board of directors to submit the society's accounts at year end and present them to the auditor one month before the general assembly, and to make them and the reports available to members at the seat for at least two weeks.
- Article 21The article requires the board of directors to appoint an executive manager to conduct the society's affairs and to set his powers, duties and rights, and makes the board answerable for his work to the general assembly.
- Article 22The article makes the general assembly the supreme authority, requires it to meet at least yearly with a 25% quorum, then 10% after a fifteen-day postponement, and makes its decisions by majority of those present.
- Article 23The article gives each member one vote in the general assembly however many shares he owns, and lets him appoint another member who is not a board member as proxy, with no member acting for more than one.
- Article 24The article lists the general assembly's powers, including discussing the board's reports, approving the balance sheet, accounts and profit distribution, electing the board, appointing the auditor and deciding objections to board decisions.
- Article 25The article governs the extraordinary meeting of the general assembly: who can call it, its cases such as amending the regulations, disposing of real estate, dissolution, merger and division, and its quorum of a majority of the contributing members.
- Article 26The article provides that the general assembly elects its chair from among its members.
الباب الثالث: موارد الجمعيةArticles 27–27
الباب الرابع: توزيع الأرباحArticles 28–28
الباب الخامس: مجلس الجمعيات التعاونيةArticles 29–29
الباب السادس: الإعانات والتسهيلات للجمعيات التعاونيةArticles 30–35
- Article 30تقدم الوزارة الإعانات الآتية: 1 - إعانة تأسيسية لمرة واحدة للجمعية بعد تسجيلها لمساعدتها في نفقات التأسيس على ألا تزيد عن (20%) من رأس مال…Repealed
- Article 31تقوم الوزارة بتقدير الإعانات وفقًا لأحكام هذا النظام، وحاجة الجمعيات، شريطة توافر الاعتمادات اللازمة لذلك. وتحدد اللائحة شروط وضوابط منح…Repealed
- Article 32للوزير أن يوقف بصفة مؤقتة أو دائمة صرف الإعانة للجمعية في الحالات الآتية: 1 - إذا صدر قرار بحل الجمعية، أو تصفيتها، أو إيقاف نشاطها. 2 -…Repealed
- Article 33لا يجوز للجمعية أن تجمع بين إعانتين تدفعان من قبل الحكومة لمشروع واحد، ويكتفي بالأكثر منهما.Repealed
- Article 34لا تصرف الإعانات الواردة في هذا النظام إلا بعد أن تتأكد الوزارة من قدرة الجمعية على مواصلة العمل وتحقيق أهدافها، وأن تكون التقارير عنها…Repealed
- Article 35The article allows the cooperative sector to be granted facilities and benefits: grants of land, priority in leasing government sites at encouraging prices, easier lending from government funds, and easier imports.
الباب السابع: الرقابةArticles 36–36
الباب الثامن: حل الجمعية وتصفيتهاArticles 37–40
- Article 37The article gives the Minister the right to dissolve a society and liquidate it in six cases, including not starting work for two years, losing more than half the paid-up capital, too few members, and a general assembly decision by three quarters of the shareholders.
- Article 38The article provides that on dissolution of a society the Ministry appoints one or more liquidators, who collect its rights and pay its debts, limit their work to finishing existing business, and prepare a final account reviewed under Article 20.
- Article 39The article requires a summary of the liquidation account to be published in a local newspaper, allows any member to challenge it before the Minister within 30 days, and requires the Minister to decide within 30 days.
- Article 40The article provides that liquidation proceeds are distributed to members up to what they actually paid for their shares plus profits realized, with the remainder deposited toward a new society or transferred by the Minister to a similar society.
الباب التاسع: أحكام ختاميةArticles 41–44
- Article 41The article provides that the relevant ministries exercise technical supervision over cooperative societies as to their activities.
- Article 42The article authorizes the Minister to issue the Implementing Regulations and the decisions needed to implement the Cooperative Societies Law, with the Regulations to be issued within 90 days of the Law's issuance and to apply from the date the Law takes effect.
- Article 43The article provides that this Law replaces the Cooperative Societies Law issued by Decree No. 26 of 1382 AH and the Regulation on Subsidies to Cooperative Societies issued by Council of Ministers Resolution No. 419 of 1398 AH.
- Article 44The article provides that the Cooperative Societies Law is published in the Official Gazette and takes effect 90 days after its publication.