Joint Liability Company:The company, which consists of two or more partners liable in all their possessions for the company's debt.
Formal procedures for the establishment of a Joint Liability Company:
a.One of the partners or their assignees files an application to the General Department of Companies, Ministry of Commerce. Enclosed in the application are the draft articles of association (Form No. 1.1 of company contract prepared by General Department of Companies may be taken as a guide). After examining the contract and obtaining approval by the General Department of Companies, it is referred to Notary public to enter it in his records.
a.The person authorized by the partners shall receive the referral letter to the notary public and the contract ratified by the General Directorate of Companies and apply to the notary public in the Ministry to fix a date for inscription. Then the partners or their attorneys report to the notary public in the scheduled time for signing the contract, along with:
■Several copies of the contract.
■Copies of the contract summary after ratification by the Chamber of Commerce.(The summary contains data set forth o the form No. 2. 1)
■Two witnesses.
■ID for each of the partners and witnesses.
b.The manager of the company shall publish a summary of the contract in a daily newspaper, which is distributed in the area of the company?s main office.
c.Applying for General Directorate of Companies to register the company. Application should include:
■Two copies of the notarized contract.
■Two copies of the newspaper in which a summary of the contract is published.
After that maintains corporate governance copy of these documents and write to the Office of the Register of commerce under the company in the commercial registration, the manager of the company or one of the partners or agent forensic audit, the Office for the completion of the commerce register registration procedure and bring along the following documents :
a.The lease contract of the company premises or office ownership deed.
b.Partners decision designating manager of the company if the contract does not include such data.
c.A certificate of regular attendance from the educational institution in the event that one of the partners or managers is a student.
d.Licensing from the competent authorities if the company practices include activities that requires licensing.
e.Copies of the IDs of partners and the manager or managers together with originals.
f.Applications to be filed in a hanger file
And a completed company registration application (Form 1 and sign it before the concerned official), payment of the applicable fees i.e. SR 4000 (Four Thousand Saudi Riyals) for five years, then upon issuance of original company registration certificate, it will be handed to the company's representative.
a.Company manager files an application to the General Directorate of Companies, enclosed with which is the partners decision to amend the articles required (Form 1.3, 1.4 or 1.5 as required).
b.After reviewing the decision by the General Directorate of Companies and approval thereof, the notary public inscribes the company's decision to amend the contract.
c.The decision shall be published in one of the daily newspapers, which is distributed in the area of the main office of the company.
d.Two copies of the newspaper in which the decision is published shall be presented to the General Directorate of Companies. A copy of the decision and the newspaper are referred to the Office of Commercial Registration to initialize these amendments. Company manager has to report to of the Office of Commercial Registration to finalize the procedures of inscribing the amendment in the commercial registration. He completes the form designed for this and signs it at the Registration Office (Form 8) and appends the following documents:
■Commercial registration original copy.
■Lease contract or ownership deed if the amendment is for the title.
■The documents supporting the amendment.
■License from the competent government bodies if the modification of activity so requires.
■Copy of valid Chamber of Commerce membership certificate.
■Valid Zakat and income tax payment certificate.
■The originals and copies of the identity documents of the partners and documents indicating profession.
■All the documents to be submitted in a hanger file.
End of partnership:
A Joint Liability Company is ended by any one of the reasons contained in Article 15 of the Regulations for Companies. Also, it ends with the death of a partner, or their interdiction, or declaration of their bankruptcy, insolvency or leaving of the company if its period is indefinite. However, it may be provided in the contract of the company that if one partner dies, the company along with the partners and the remaining heirs even if they are minors will continue.
If such partner or their heirs does not have their share in the company in financial form then, this share shall be estimated according to the latest inventory, unless the company contract states another way of estimation. The partner or their heirs will not have shares in new rights established later, only to the extent that these rights result from previous operations prior to that incident.
Liquidation shall be effected in accordance with the provisions contained in Part XI of Regulations for Companies. The company liquidator has to report to the Office of Commercial Registration after the completion of liquidation and the transfer of the documents from the General Directorate of Companies to the Commercial Registration Office for removing the company from the commercial registration. The company liquidator fills out the respective form in the Office of Commercial Registration (Form 11), signs it, forwarding the original commercial registration, and receives a certificate that the company has been removed from the register.
Courtesy: Ministry of Commerce & Industry, KSA
----------------------------------------------------------------------------------------------
TThis English language text is not an official translation and is provided for information purposes only. In the event of any discrepancies between the English translation and the Arabic original, the Arabic original shall prevail.The reader is solely responsible for the use of the information contained herein.
--------------------------------------------------------------------------------------------
