the Ministry of Commerce announced the implementation of the ministerial decision issued by His Excellency the Minister of Commerce, Dr. Majid bin Abdullah Al-Qasabi, imposing an immediate penalty on anyone who fails to file financial statements, in accordance with the provisions of the Companies Law and its implementing regulations.

According to the ministerial decision, an immediate penalty on anyone who fails 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:
A fine of 15,000 riyals shall be imposed on the violator if the company’s capital is less than (5 million riyals).
A fine of 20,000 riyals shall be imposed on 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 that has become final, the fine shall be increased by (50%).

Pursuant to the ministerial decision, violators shall be notified of the immediate violation decision in accordance with the mechanism stipulated in Article (94) of the Executive Regulations of the Companies Law.

It should be noted that Article (17) of the Companies Law issued in 1443 AH stipulates that “financial statements for the company must be prepared at the end of each fiscal year in accordance with the accounting standards adopted in the Kingdom and filed within (6) months from the end of the fiscal year.” The Law also establishes penalties in Article (262) for violations committed by anyone who neglects or fails to perform their duties, and paragraph (e) stipulates a violation: “Any person who fails to fulfill their duty to maintain the company’s accounting records and supporting documents to clarify its operations, or to prepare financial statements in accordance with the accounting standards adopted in the Kingdom, or to file them in accordance with the provisions of the Law.”