His Excellency the Minister of Commerce Dr. Majid bin Abdullah Al-Qasabi issued a ministerial decision imposing an immediate penalty on anyone who fails to fulfill their duty to file financial statements, in accordance with the provisions of the Companies Law and its implementing regulations. The decision will take effect as of July 1, 2024.

According to the ministerial decision, which was published in the official gazette “Umm al-Qura,” a direct penalty is imposed on anyone who fails to fulfill their duty to file financial statements in accordance with the provisions of the Companies Law and its implementing regulations, and the fine shall be as follows:

First: Violators in all types of companies (except unlisted joint-stock companies):
8,000 riyals for violators in a single-director company with a capital of less than 500,000 riyals.
4,000 riyals for violators in a company with two or more directors whose capital is less than (500,000 riyals).
12,000 riyals for violators in a single-director company whose capital is (500,000 riyals) or more.
6,000 riyals for violators in a single-director company with a capital of 500,000 riyals or more.

Second: Violators in unlisted joint-stock companies:
15,000 riyals for the violator if the company’s capital is less than (5 million riyals).
20,000 riyals for the violator if the company’s capital is (5 million riyals) or more.

The decision stipulates that in the event of a repeat violation involving the failure to file financial statements within the statutory period for the fiscal year following the previous violation decision becoming final, the fine shall be increased by (50%).

The ministerial decision also confirmed that the mechanism for notifying violators of the direct violation decision must be in accordance with the mechanism stipulated in Article (94) of the Executive Regulations of the Companies Law.