Article 4 of the Saudi Cooperative Societies Law
المادة 4 من نظام الجمعيات التعاونية · الباب الأول: أحكام عامة
The 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.
Official text (Arabic)
This article has not been amended since the law was issued.
تكتسِب الجمعية الشخصية الاعتِبارية بمُجرد إتمام عمليتي التسجيل والإشهار المنصوص عليها في هذا النِظام، والنشر عن ذلك في صحيفتين محليتين. ويجوز للجمعية أن تنشئ لها فروعا بعد الحصول على ترخيص من الوزارة ، وفق الضوابط التي تحددها اللائحة .
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 4 explained in plain English
This article deals with two matters: when the society becomes a legal person, and setting up branches.
First: acquiring legal personality
The society acquires legal personality as soon as three things are completed:
- The registration provided for in the Law.
- The announcement provided for in the Law.
- The publication of this in two local newspapers.
Legal personality means the society becomes an entity independent of its members. The implication of the text is that this status does not attach to the society before these steps are completed. The procedures for registration and announcement themselves are not set out in this article, which only indicates that they are provided for in the Law.
Second: branches
- The society may set up branches.
- Provided it obtains a license from the Ministry.
- This is done in accordance with the controls set by the Regulations.
This article is linked to Article 3, which sets the society's composition of at least twelve members (or five exceptionally, as assessed by the Minister) and the limit on a member's shareholding. It is also linked to Article 5, which regulates the fixed share price, its indivisibility, and the assignment and redemption of shares.
Anyone who needs to verify that their society's procedures are complete, or to open a branch, can consult a lawyer who specializes in commercial and corporate cases.
Practical example
A consumer cooperative society in Riyadh completed its registration and announcement and published this in two local newspapers, and so acquired legal personality. Years later it wanted to open a branch in Kharj. Under this article it must obtain a license from the Ministry in accordance with the controls set by the Regulations.
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 4 of the Saudi Cooperative Societies Law
When does a cooperative society acquire legal personality?
As soon as the registration and announcement provided for in the Law are completed and this is published in two local newspapers.
May a cooperative society open branches?
Yes, after obtaining a license from the Ministry, in accordance with the controls set by the Regulations.
More articles on Establishing and Registering the Cooperative Society
- 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 8
The 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.
يُعد الأشخاص الذين يشترِكون في تكوين جمعية تعاونية مؤسَّسين لها، وهُم الذين يتولون إعداد عقد التأسيس الابتدائي، واللائحة الأساسية للجمعية. ويتحملون بالتضامُن ما
- Article 9
The 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.
يجب أن يتضمن عقد تأسيس الجمعية ما يأتي: 1 - تاريخ ومكان تحريرِه. 2 - أسماء المؤسَّسين ومحال إقامتِهم ومهنِهم. 3 - اسم الجمعية. 4 - مقر الجمعية ومنطِقة عملِها. 5
- Article 10
The 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.
يكون لكُلِ جمعية لائحة أساسية تعد وفقا لأحكام هذا النظام متضمنة -على الأخص - ما يأتي: 1 - اسم الجمعية، ومنطِقة عملِها ، ومقرها والغرض أو الأغراض التي أنشئت من أ
- Article 11
The 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.
على مؤسِّسي الجمعية التقدُّم للوزارة بطلب تسجيل الجمعية، على أنَّ يُرفق بِه المُستندات الآتية: 1 - دراسة جدوى تأسيس الجمعية . 2 - محضر اجتِماع المؤسِّسين. 3 - ن
- Article 12
The 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.
تقوم الوزارة بمُراجعة المُستندات الواردة في المادة (الحادية عشرة) من هذا النظام ، فإذا كانت مستوفية لمتطلبات هذا النِظام قامت بإتمام إجراءات الإشهار، وإلا فلها
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.