Key Points and Details About the Corporate System

Simplified Company

Introduced New Companies Law Criteria for what is known as a simplified joint-stock company, which may be established without a minimum capital requirement, managed by one or more directors, and does not require general meetings.

Forms of Incorporation

A company established in accordance with the provisions of the new Companies Law may take one of the following forms: limited liability company, simplified joint-stock company, simple partnership, joint-stock company, or general partnership.

Special Exception

The law exempts micro and small companies from the requirement to appoint an auditor, taking into account their newness and size.

Restrictions on Remuneration

The system stipulates that there shall be no maximum limit on the remuneration of board members in a joint-stock company, and grants the ordinary general assembly the authority to determine the amount of such remuneration, while establishing fair and incentivizing criteria commensurate with the member’s performance and the company’s performance.

Board of Directors

The law has removed the maximum limit on the number of board members in a joint-stock company, allowing shareholders to determine the number of members in the company’s articles of association.

Single-Member Company

The law allows a company to have a single member without restrictions and without the need to hold a founding meeting.

Removal of Restrictions

The new Companies Law has removed numerous restrictions at all stages (incorporation, operation, and dissolution).

Offices for Foreign Companies

The law facilitates the operation of Foreign companies may conduct activities and business in the Kingdom through a branch, representative office, or any other form “in accordance with the Foreign Investment Law.”

Auditors

An auditor may be appointed by decision of the foreign company’s director, and may continue if the company holds a temporary license.

Addressing Challenges

The system addresses the challenges facing the business sector through collaboration with various public and private sector entities, and by seeking input from professional bodies, international organizations, and specialized consulting firms.

Practicing One or More Professions

The system enables professional companies to practice one or more professions and to take any form of company structure, and to obtain financing to develop their businesses by allowing non-professional investors to participate in these companies and enabling them to invest their funds in real estate, securities, and other assets.