The Ministry of Commerce has announced that a Noble Royal Decree has been issued to suspend some provisions of the Corporate Law, issued by the Royal Decree No. (M / 3) dated 28. 01. 1437 AH, also granting His Excellency the Minister of Commerce some necessary authorities in this regard.
Accordingly, a decision is issued by His Excellency the Minister of Commerce, Dr. Majid bin Abdullah Al-Qasabi, No. (348) dated 04/10/1442 AH, based on the said Noble Royal Decree.
The Ministry of Commerce stated that the exceptions from some provisions of the Corporate Law will be as follows:
First: Increasing the period stipulated in Paragraph (2) of Article (one hundred sixty-seventh) of the Corporate Law, regarding holding the General Assembly, to become within the twelve months following the end of the company's fiscal year.
Second: Increasing the period stipulated in Article (one hundred seventy-five) of the Corporate Law, regarding sending a copy of the auditor's report, the company's financial statements, a report on the company's activity and its financial position, suggestions regarding profit distribution, and a copy of the Supervisory Board's Report (if any) to the Ministry and to each partner, to become twelve months from the end of the fiscal year.
Third: The validity of what is mentioned in items (First) and (Second) above shall be expired on 16. 05. 1442 AH corresponding to 31. 12. 2020 AD.
Fourth: Allowing the partners in the Limited Liability Companies, in which their number exceeds twenty partners, to express their opinions separately, provided that in this case the director of the company will send a registered letter of the proposed decisions for the partners to vote on. This is to be done within a period of one year, starting from 16. 03. 1442 AH. This is an exception to the provision of paragraph (1) of Article (one hundred sixty-eight) of the Corporate Law.
Fifth: As an exception to the provision of Article (one hundred eighty-one) of the Corporate Law, the period during which the director of the Limited Liability Company must invite the partners to meet is extended to 180 days from the date of their knowledge of the loss reaching half of the company's capital. The period to be extended for two years from the date of 01. 08. 1441 AH.
Sixth: The validity of paragraph (3) of Article (one hundred eighty-one) of the Corporate Law shall be suspended for a period of two years from the date of 01. 08. 1441 AH. The Limited Liability Companies, when their losses reach the amount specified in paragraph (1) of Article (one hundred eighty one) of the Corporate Law, should continuously disclose the developments relevant to their losses in accordance with the following conditions:
1. The director, directors, or board of directors of the company, upon knowing that the company's losses have reached half of the capital, must submit to the Ministry a request to publish an announcement about that on the Ministry’s website, including the amount of losses, their percentage of the capital and the main reasons that led to such losses.
2. The director, directors, or board of directors of the company must submit to the Ministry, on a quarterly basis, a report on the developments of the company's losses within (fifteen) days from the end of each quarter and a request to publish an announcement about that on the Ministry’s website.
3. The director, directors, or board of directors, upon knowing that the company's losses have decreased to less than half of the capital, must submit a request to the Ministry to publish that on the Ministry’s website, including the measures taken by the company to amend its situation.
Seventh: The validity of what is mentioned in items (Six) above shall expire on 30. 07. 1443 AH.
Eighth: As an exception to the provision of Article (150) of the Corporate Law:
1. Extending the period upon which the Board of Directors must invite the Extraordinary General Assembly to be held, upon knowing that the losses of the Joint-Stock Company have reached half of the paid capital, to become (60) days from the date of the Board’s knowledge of the losses for a period of two years from the date of 01. 08. 1441 AH.
2. Extending the period during which the Extraordinary General Assembly to be held to become (180) days from the date of the Board of Directors knowledge of the losses, for a period of two years from the date of 01. 08. 1441 AH.
Ninth: Paragraph (2) of Article (one hundred fifty) of the Corporate Law shall be suspended for a period of two years from the date of 01. 08. 1441 AH. The unlisted Joint-Stock Companies are required, when their losses reach the amount specified in Paragraph (1) of Article (one hundred fifty) of the Corporate Law, to continuously disclose the developments of their losses according to the following conditions:
1. The Chairman of the Company’s Board of Directors, upon knowing that the losses of the company have reached half of the capital, should submit a request to the Ministry to publish an announcement about that on the Ministry’s website, including the amount of losses, their percentage of the capital, and the main reasons that led to such losses.
2. The Chairman of the Company’s Board of Directors shall submit to the Ministry, on a quarterly basis, a report on the developments of the Company’s losses within (fifteen) days from the end of each quarter and a request to publish an announcement on the Ministry’s website.
3. The chairman of the company’s board of directors, upon knowing that the company's losses have decreased to less than half of the capital, must submit a request to the Ministry to publish an announcement about that on the Ministry’s website, including the measures taken by the company to amend its situations.
Tenth: The validity of what is mentioned in Article 9 above shall expire on 30. 07. 1443 AH.
Eleventh: As an exception to the provision of paragraph (1) of Article (one hundred thirty three) and Article (one hundred sixty-six) of the Corporate Law, the Limited Liability and Joint-Stock Companies are allowed to re-assign the auditor, whose term of appointment has reached (five) continuous years, for a period not exceeding two additional years, provided that the total period of appointing the auditing office does not exceed (seven) consecutive years, and (five) continuous years for the partner supervising the auditing process, provided that the validity of this exception will expire after two years from the date of 01. 08. 1441 AH.