Directors and officers’ liability under the new Saudi Companies Law
29 September 2022
Saudi Arabia: The New Companies Law
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Legal Development 04 October 2022 04 October 2022
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Middle East
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Corporate
Saudi Arabia has issued a new Companies Law (the New Companies Law) which will govern all forms of entities in the Saudi market, whether commercial, non-profit, family operated entities, and/or professional, under one comprehensive single law.
The New Companies Law was approved by the Council of Ministers in the Kingdom of Saudi Arabia on 28 June 2022 and published in the Saudi official gazette (Umm Al-Qura) on 04 July 2022 (the Publication Date). The New Companies Law will replace the previous Companies Law (the Previous Companies Law) which was issued pursuant to the Royal decree No. M/3 dated 10 November 2015. This article considers the key changes that will impact companies entering the market and establishing operations in Saudi Arabia.
The New Companies Law
The New Companies Law will enter into effect within (180) days from the Publication Date (the Effective Date), meaning the expected Effective Date should take place in early January 2023. The Implementing Regulations and consecutive guidelines (the Implementing Regulations) are also expected to be issued before or immediately after the Effective Date by the Ministry of Commerce (MoC), with the collaboration as the case maybe, with the KSA Capital Market Authority (CMA), Saudi Central Bank (SAMA), and National Centre for the Non-Profit Sector.
The New Companies Law and its Implementing Regulations shall replace and revoke:
- The Previous Companies Law;
- Regulations which contradict with the New Companies Law and its Implementing Regulations; and
- The current KSA Professional Companies Law issued pursuant to the Royal Decree number M/17 dated 25 September 2019, and its implementing regulations which were previously approved and published on 23 April 2020 (the Previous Professional Companies Law).
Download our full article outlining the key changes under the New Companies Law in comparison with the Previous Companies Law:
Learn more about the New Companies Law
For more information on the New Companies Law and how it might impact your business, please contact Alain Sfeir, Shahd Makhafah or Meshael AlShubaily.
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