MCI and the Capital Market Authority seek to cooperate and coordinate policies and procedures for the application of the Corporate Law in order to achieve the targeted integration and harmony. Based on the joint responsibility for protecting the investors, MCI and the Capital Market Authority would like to clarify the cases of Joint Stock Companies expiration (Listed or Unlisted) and the Related Liquidation Procedures.
Taking into account the reasons for the expiration of each type of companies, in accordance with the provisions stipulated in the Corporate Law, the Joint Stock Company (listed or unlisted) shall expire by one of the following reasons:
(A) The expiry of the period specified therein, unless extended in accordance with the provisions of the Corporate Law.
(B) Fulfilling its objectives or they are impossible to be fulfilled.
(C) The transfer of all shares to one shareholder, unless the conditions for its continuation as unlisted joint stock company are met, or the single shareholder transfers it to a limited liability company, or its situations are adjusted in accordance with the provisions of the Corporate Law.
(D) Liquidation before its expiry period.
(E) Incorporation into another company.
(F) The issuance of a final judgment for expiration or invalidation, as per the request of a shareholder or any interested party.
(G) Expiration under article 150 of the Corporate Law.
Notably, the Board of Directors shall request the approval of the Capital Market Authority (in respect of the listed joint stock companies) and the approval of MCI (in respect of the unlisted joint stock companies) to hold an Extraordinary General Assembly meeting, in accordance with the conditions stipulated in the Corporate Law, to take a decision for the expiration of the company, before the expiry of the period specified in its main regulations or before its incorporation into another company.
The expiration of the listed joint stock company will result in the cancellation of its enrollment in the Saudi Stock Exchange (Tadawul).
Upon the expiration of the joint stock company, it will automatically enter into the liquidation phase, but it shall retain the legal personality to the extent necessary for liquidation. Unless the Company's Memorandum of Association or its main regulations or the agreement of the General Assembly state how to liquidate the company, the liquidation shall be in accordance with the provisions of the Corporate Law. The liquidation decision shall be either optional or judicial as follows:
Optional Liquidation:
The Board of Directors shall request the approval of the Capital Market Authority (in respect of the listed joint-stock companies) and the approval of MCI (in respect of the unlisted joint-stock companies) to hold the General Assembly meeting to issue a resolution for the liquidation of the joint stock company, including the appointment of the liquidator, the determination of his powers and fees, the restrictions imposed on his authorization and the liquidation period needed,
Judicial Liquidation:
Any shareholder or any interested party may file a lawsuit with the competent judicial authority to demand the liquidation of the joint stock company. The judicial liquidation decision shall include the appointment of the liquidator, the determination of his powers and fees, restrictions on his authorization and the time required for liquidation.
Meanwhile, MCI and the Capital Market Authority would like to draw the attention and ask the members of the Board of Directors of the joint stock companies (listed or unlisted) to comply with the provisions of the Corporate Law and the relevant regulatory texts and to comply with the instructions issued by the Ministry of Commerce and Investment and the Capital Market Authority.