Article 8 of the Saudi Cooperative Societies Law
المادة 8 من نظام الجمعيات التعاونية · الباب الأول: أحكام عامة
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.
Official text (Arabic)
This article has not been amended since the law was issued.
يُعد الأشخاص الذين يشترِكون في تكوين جمعية تعاونية مؤسَّسين لها، وهُم الذين يتولون إعداد عقد التأسيس الابتدائي، واللائحة الأساسية للجمعية. ويتحملون بالتضامُن ما يستلزمُه تكوين الجمعية من نفقات التأسيس، وما يتفرع عنه من التزامات، ويرد إليهم من رأس المال مصروفات التأسيس بعد تسجيل الجمعية، وإذا تعذر تكوين الجمعية لا يكون لهُم حق الرجوع على أحد بما أنفقوه.
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 8 explained in plain English
This article regulates the position of the founders of the cooperative society, their rights and obligations.
Who are the founders? The persons who take part in forming the society and who prepare:
- The preliminary founding contract.
- The society's basic regulations.
Their financial obligations: they bear jointly what forming the society requires in:
- Founding expenses.
- The obligations that arise from them.
Joint liability means that each founder can be claimed against for the whole of these expenses and obligations, not only for his share.
Recovering expenses: the founding expenses are repaid to them from the capital, after the society is registered.
If formation proves impossible: they have no right of recourse against anyone for what they have spent. A founder therefore bears the risk of losing what he spent if the society is not registered.
Article 9 follows to set out the particulars the founding contract prepared by the founders must contain, including the date and place of its drafting, the founders' names, places of residence and occupations, and the society's name, seat, area of work, type and purposes, and the amount of capital and the nominal value of each share.
It is also linked to Article 7, which keeps the door of membership open to those who meet its conditions after establishment. Anyone taking part in founding a society can consult a lawyer who specializes in commercial and corporate cases to assess their obligations.
Practical example
Fifteen fishermen in Yanbu agreed to establish a cooperative society, and spent money preparing the feasibility study and documents. Under this article they bear these expenses jointly, and they are repaid from the society's capital after it is registered; but if the society cannot be formed, they have no right of recourse against anyone for what they have spent.
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 8 of the Saudi Cooperative Societies Law
Who bears the founding expenses of a cooperative society?
The founders bear them jointly, along with the obligations that arise from them.
Are founding expenses repaid to the founders?
Yes, they are repaid from the capital after the society is registered.
What if the cooperative society is not registered?
If the society cannot be formed, the founders have no right of recourse against anyone for what they have spent.
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 4
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.
تكتسِب الجمعية الشخصية الاعتِبارية بمُجرد إتمام عمليتي التسجيل والإشهار المنصوص عليها في هذا النِظام، والنشر عن ذلك في صحيفتين محليتين. ويجوز للجمعية أن تنشئ له
- 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.