It regulates equity, management of governance, employment of relatives and settlement of disputes
As a result of the New Companies Law and its Implementing Regulations, family-owned businesses are now more stable and sustainable. Partners or shareholders can now conclude a family charter to regulate and manage the company's family equity, governance, administration, work policy, employment of family members, dividends, disposal with shares disputes methods, and dispute resolution mechanism.
The new law, which went into effect on January 19, made this charter part of the company's articles of association or its bylaws, allowing the heirs to get part of their heirs' interest in the company either in their own right or through a company they set up for that purpose.
This step highlights the critical significance of family-owned businesses in bolstering the national economy, especially given that these businesses account for the lion's share of total enterprises engaged in various economic activities and sectors across the Kingdom.
The new law allowed founders, partners, or shareholders to enter into partnership agreements that are intended to govern their relationship both during or after the company's incorporation, so that such agreements can be built as part of the company's articles of association or its bylaws.