The penalty for failing to fulfill duties is a financial fine of up to 500,000 riyals
The Ministry of Commerce is calling on companies to electronically prepare and submit their financial statements through the Qawaem Platform in order to avoid violations of the Companies Law provisions. The Ministry emphasized that companies registered as: simplified, simplified joint-stock, limited liability, joint venture, and limited partnership entities "as per their legal structure" are required to prepare their financial statements at the end of each fiscal year in accordance with the endorsed accounting standards in the Kingdom. These statements must be submitted within (6) months from the end of the financial year, in line with Article (17) of the new Companies Law. The financial statements reveal the company's financial position, profits and losses, net cash flows, and changes in owner's equity. The responsibility for their submission falls on: the company's CEO, managing director, or board chairman. Uploading these financial statements serves several purposes:
- Fulfilling regulatory requirements according to the company's structure.
- Shedding light on the company's operations and performance.
- Ensuring compliance with market regulations and performance benchmarks.
- Preventing legal consequences for violating the Companies Law.
- Aiding shareholders and partners in overseeing company performance and conducting financial analysis for financial statements.
- Accessing comprehensive government services available to companies.
- Assessing corporate governance and transparency levels.
- Building credibility with financiers and lenders.
The Ministry has clarified that companies failing to prepare financial statements according to endorsed accounting standards or neglecting their uploading as per the law's provisions could face a fine of up to 500,000 Saudi riyals, as stated in Article (262) of the Companies Law.
The Ministry encourages companies to electronically prepare and submit their financial statements through the Qawaem Platform. qawaem.bc.gov.sa