Amendments to Articles of Association in Saudi Arabia
Learn the requirements and steps necessary to amend your company’s Articles of Association (AoA).
Updating Articles of Association (AoA) in Saudi Arabia
Legal Framework for Updating the Articles of Association (AoA)
Internal Approval
Secure board or shareholder approval for the proposed amendments.
SBC Submission
Upload the revised Articles of Association (AoA) through the Saudi Business Center’s (SBC) digital platform.
Regulatory Review
The regulator reviews the submission to ensure compliance with the New Companies Law.
Formal Documentaiton
Approved amendments are officially recorded in the company’s commercial registration.
Additional Notifications
Depending on the company’s legal structure, other relevant authorities may also need to be notified.
Why does the Articles of Association (AoA) matter?
Business Setup
Required for attestation by the Ministry of Commerce before incorporation.
Bank Account Activation
Used to verify GM powers and capital structure for opening accounts.
Visa Processing
Government bodies may reference the AoA to validate company details during visa approvals.
Future Amendments
Any changes to GM authority, shareholding, or company structure must be reflected in the AoA.
Drafting the Articles of Association (AoA): Key Considerations
General Manager (GM) Powers
- Best practice is to grant broad powers to the GM to facilitate smooth operations, while internal policies can set limitations if necessary.
- Companies may adjust powers according to their governance model, but overly restrictive powers can increase the risk of noncompliance across different business areas.
Capital and Shareholding Structure
- This clause specifies the company’s invested capital and outlines how profits are distributed among shareholders.
- Minimum capital requirement: SAR 25,000.
- Capital must be declared in Saudi Riyals.
- Once a corporate bank account is established, the parent company must transfer the capital into the Saudi entity’s account within one month.
- Ownership structure directly affects decision-making authority and profit-sharing.
10% Legal Reserve
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