Article 14 of the Saudi Cooperative Societies Law
المادة 14 من نظام الجمعيات التعاونية · الباب الثاني: إدارة الجمعيات التعاونية
The 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.
Official text (Arabic)
This article has not been amended since the law was issued.
مُدة عضوية مجلِس الإدارة أربع سنوات، ويجوز للجمعية العمومية التجديد للمجلس لفترة أخرى أو أكثر ، ويستمر المجلس في ممارسة مهامه وصلاحياته إلى أن يتم تعيين المجلس الجديد ، ولا يتقاضى أعضاء مجلِس الإدارة أجراً عن عملِهم ، ولكن يجوز للجمعية العمومية منح المجلس مكافأة بنسبة لاتزيد على 10٪ من الأرباح السنوية المحققة بعد استقطاع النسب النظامية .
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 14 explained in plain English
This article regulates the board of directors' term and its members' financial compensation.
First: the term
- The term of board membership is four years.
- The general assembly may renew the board for one or more further periods.
- The board continues to exercise its duties and powers until the new board is appointed, so the society is not left without management if the term ends before a new board is chosen.
Second: pay and bonus
- Board members receive no pay for their work, which is in the nature of cooperative work.
- But the general assembly may grant the board a bonus of no more than 10% of the annual profits achieved, after the statutory deductions.
The bonus is therefore optional, the decision is for the general assembly, it depends on profits having been achieved, and it is calculated after the statutory deductions, not from the gross profits.
Note that the four-year term differs from the term of the first board, which Article 13 sets at three years when the founders appoint it from among themselves. Article 13 also provides that the board is made up of at least five members elected by the general assembly.
If a member's seat falls vacant during the term, Article 15 deals with it by adding the reserve member who obtained the most votes to complete the remaining term.
Anyone with a dispute over the board's bonus or term can consult a lawyer who specializes in commercial and corporate cases.
Practical example
A cooperative society in Taif made annual profits, and after the statutory deductions a certain amount remained. Under this article, the general assembly may grant the board of directors a bonus of no more than 10% of that amount, although the board members receive no pay for their work.
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 14 of the Saudi Cooperative Societies Law
What is the term of a cooperative society's board of directors?
Four years, and the general assembly may renew it for one or more further periods.
Do the board members of a cooperative society receive salaries?
They receive no pay, but the general assembly may grant the board a bonus of no more than 10% of the annual profits achieved after the statutory deductions.
What happens if the board's term ends before a new board is elected?
The board continues to exercise its duties and powers until the new board is appointed.
More articles on Cooperative Society Board of Directors
- Article 13
The 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.
يكون لكُل جمعية مجلِس إدارة، يقوم بكافة الأعمال اللازِمة لإدارتها في حدود أغراضِها ولائحتِها، ويتكون مِن خمسة أعضاء على الأقل، تنتخِبُهم الجمعية العمومية من بين
- Article 15
The 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.
إذا خلا مكان أحد أعضاء مجلِس الإدارة لأي سبَّب، فعلى المجلِس أنَّ يضُم العضو – من بين الأعضاء الاحتياطيين - الذي حاز على أكثر الأصوات في إقتراع الجمعية العمومية
- Article 16
The 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.
ينتخب مجلِس الإدارة من بين أعضائه رئيساً ، ونائباً للرئيس ، وأميناً للمجلس ، وأميناً للصندوق في أول اجتماع له .
- Article 17
The 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.
لايكون انعقاد المجلس صحيحا إلا بحضور أغلبية أعضائه ، وتصدر قراراته بموافقة الأغلبية المطلقة لعدد الأعضاء الحاضرين ، فإذا تساوت الأصوات يرجح الجانب الذي صوت معه
- Article 18
The 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.
1- يقوم مجلِس الإدارة بالإشراف على سير العمل بالجمعية بصِفة مُستمِرة، ومُراقبة من يقوم بالإدارة ، ومن يُمثِلون الجمعية والمُفوضين لأعمال مُعيِّنة . 2 - لرئيس مج
- Article 21
The 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.
يعين مجلس الإدارة مديرًا تنفيذيًا يقوم بتصريف شؤون الجمعية، ويحدد المجلس اختصاصاته، وواجباته، وحقوقه، ويكون مجلس الإدارة مسؤولاً عن أعمال المدير في مواجهة الجمع
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.