Ministry of Commerce and Industry held on Monday, 18.02.1437 H. a press conference to review and discuss the major features of the New Corporate Law. The agenda of the meeting, held at the conference & I.T. building of the Ministry`s headquarters, included the discussion of the advantages of the new corporate law, as well as reviewing the most prominent details and changes in the trading field, also the impact of this law on the economic and trade sectors in the Kingdom, in addition to the most detailed regulations of the new law, besides the list of penalties and fines. The participants also discussed the role of this law in supporting and developing the private sector, the procedures for founding companies, as well as talking about the importance of a single person company, also the roles of the partners, the board of directors and general assemblies.
The conference was attended by Deputy Minister for Rules & Regulations Dr. Fahd Abu Haimid, Deputy Minister for Internal Trade, Dr. Tariq Al Na`aim, Acting Assistant Deputy Minister for Rules & Regulations, Badr Al Haddab, the Director of the General Administration of Companies, Waleed Al Ruwaished and a number of media.
Through his speech in the conference, the Deputy Minister for Rules & Regulations Dr. Fahd Abu Haimid emphasized the importance of the new system in providing the appropriate legal framework for the practice of fair and sound principles of corporate governance, pointing out that the Ministry aims to provide the concepts of the institutional work that supports the growth of economic entities and ensures their continuation.
He explained that the new system permits founding a single person company for encouraging the institutional work, in order to achieve sustainability and growth of the companies, adding that the system has given special attention for the family businesses, due to their role in the commercial sector and their contribution towards the National Economy.
Meanwhile, he reviewed the care given by the new system to the principles of corporate governance to ensure fair treatment for all partners, to strengthen the rights of those dealing with the companies and to provide the necessary protection for them. He pointed out that the new system would prohibit combining the post of a chairman of the board of directors and any other executive position in the company, as well as approving founding a committee specialized in monitoring and reviewing the work of the company, also it is mandatory in the new system to follow the method of cumulative voting in the election of the Board of Directors.
For his part, Dr. Tariq Al Na`aim, Deputy Minister for Interior Trade confirmed that the new system aims to facilitate the procedures and to reduce the requirements and conditions requested from the companies, explaining that the new system allows holding the second meeting of the Assembly after one hour of the end of the first meeting, according to the controls set by the regulations. This is for speeding up the work of the Assemblies and not to hinder the company's performance.
It is worth mentioning that the New Corporate Law is considered one of the most prominent developmental economic systems issued by the government to provide an official incubator and incentive environment for creative initiatives and investment, in order to enhance the value of companies and to develop their activities and contributions in the National Economy. The new system contributes as well in reducing the cost of procedures, and encouraging the creative initiative in the business activity. This is to promote the leading position of the Kingdom and its competitive advantages, and to encourage the investments of the entrepreneurs, as well as the small and medium enterprises.
The new system stated the jurisdiction of the Ministry of Commerce and Industry in respect of all companies except for the joint-stock companies, listed on the Saudi Capital Market , where the supervision and control will be within the jurisdiction of the Capital Market Authority.