Article 23 of the Saudi Cooperative Societies Law
المادة 23 من نظام الجمعيات التعاونية · الباب الثاني: إدارة الجمعيات التعاونية
The 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.
Official text (Arabic)
This article has not been amended since the law was issued.
لكل عضو صوت واحد في الجمعية العمومية مهما بلغت الأسهم التي يملكها، وللعضو أن يوكل عضوًا آخر في الجمعية من غير أعضاء مجلس الإدارة، ولا يجوز للعضو أن يكون وكيلاً عن أكثر من واحد.
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 23 explained in plain English
This article sets the principle of equality in voting, which is one of the most prominent features distinguishing cooperative societies from companies.
First: one vote per member
Each member has one vote in the general assembly however many shares he owns. A holder of one share and a holder of many shares have equal voting power.
Second: proxies
- A member may appoint another member of the society as proxy.
- Provided that the proxy is not a member of the board of directors.
- And a member may not act as proxy for more than one person.
These restrictions on proxies prevent votes becoming concentrated in one person's hands; the most a proxy can carry is his own vote and the vote of one principal.
Note that the proxy must be a member of the society, so under the text a person from outside it may not be appointed.
This article is linked to Article 22, which makes the general assembly the supreme authority and sets its quorum at 25% of the members, and 10% after postponement for fifteen days, with its decisions made by a majority of those present. It is also linked to Article 24, which sets the general assembly's powers, including discussing the board's reports and approving the balance sheet, the final accounts and the profit distribution proposal.
Anyone facing a dispute over voting or proxies can consult a lawyer who specializes in commercial and corporate cases.
Practical example
Faisal owns 100 shares in a cooperative society in Riyadh, and his neighbor Saud owns only 5. Under this article, each has one vote in the general assembly. If Saud travels at the time of the meeting, he may appoint Faisal as proxy as long as Faisal is not a member of the board of directors and has not accepted a proxy from another member.
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 23 of the Saudi Cooperative Societies Law
Do I get more votes in a cooperative society if I own more shares?
No. Each member has one vote in the general assembly however many shares he owns.
May a member appoint a proxy to attend the general assembly?
Yes. A member may appoint another member who is not a member of the board of directors.
How many proxies may a member hold?
A member may not act as proxy for more than one person.
More articles on Cooperative Society Membership and Shares
- Article 3
The 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.
تتكون الجمعية من أفراد لا يقل عدَّدُهم عن اثني عشر شخصاً، ولكُل عضو أنَّ يمتلِك عدَّدا من الأسهُم، بشرط ألا يزيد ما يمتلِكُه العضو الواحد عن (10%) من رأس مال ال
- Article 5
The 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.
مع مراعاة ما ورد في المادة (الثالثة) من هذا النظام ، يكون سعر السهم ثابِتا، ولا تجوز تجزئتُه ، ويمكن للعضو المنسحب من الجمعية التنازل عن قيمة أسهمه لعضو في الجم
- Article 6
The 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.
لايجوز الحجز على أموال الجمعية إلا وفاء لديونها وبموجب حكم قضائي ، وتتحدد مسؤولية العضو في حقوق الجمعية وإلتزاماتها بقدر مايملكه من الأسهم .
- Article 7
The 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.
باب العضوية بالجمعية مفتوح لمن تنطبق عليهم شروط العضوية ، إلا في حالات استثنائية تحددها اللائحة .
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.