Article 6 of the Saudi Cooperative Societies Law
المادة 6 من نظام الجمعيات التعاونية · الباب الأول: أحكام عامة
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.
Official text (Arabic)
This article has not been amended since the law was issued.
لايجوز الحجز على أموال الجمعية إلا وفاء لديونها وبموجب حكم قضائي ، وتتحدد مسؤولية العضو في حقوق الجمعية وإلتزاماتها بقدر مايملكه من الأسهم .
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 6 explained in plain English
This article provides two protections: the first for the funds of the society, and the second for the funds of the member.
First: protecting the society's funds from attachment
The society's funds may not be attached unless both conditions are met:
- The attachment must be to satisfy its debts, that is, a debt owed by the society itself.
- It must be under a court judgment.
It is not enough for someone to claim a debt against the society for its funds to be attached; a court judgment is required, and its funds may not be attached for a debt that is not one of its debts.
Second: limiting the member's liability
The member's liability for the society's rights and obligations is limited to the extent of the shares he owns. Practically, this means a member is not liable for the society's obligations beyond the value of his shares, and his share in its rights is likewise determined by his shares.
This provision reassures anyone wishing to join a cooperative society, as he knows the limit of his commitment is tied to the shares he owns.
This article is linked to Article 5, which provides for a fixed share price and its indivisibility and regulates a withdrawing member's redemption of the value of his shares with profits added or losses deducted. It is also linked to Article 7, which keeps the door of membership open to those who meet its conditions except in exceptional cases set by the Regulations.
Anyone owed a debt by a cooperative society who wants to enforce against its funds can consult a lawyer who specializes in enforcement cases.
Practical example
Majed owns shares worth SAR 5,000 in a cooperative society in Buraidah, and then debts to one of the suppliers accumulated against the society. Under this article, Majed's liability is limited to the extent of the shares he owns, and the supplier may not attach the society's funds except to satisfy his debt and under a court judgment.
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 6 of the Saudi Cooperative Societies Law
May a cooperative society's funds be attached?
Only to satisfy its debts and under a court judgment.
Does a member bear the cooperative society's debts from his own funds?
The member's liability for the society's rights and obligations is limited to the extent of the shares he owns.
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 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 .
- Article 23
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.
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
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.