This article outlines the new ministerial resolution on the requirement of actively holding & maintaining a register for shareholders of Limited Partnership, Limited Liability, and Closed Joint Stock companies operating within the Kingdom of Saudi Arabia. This new resolution is yet to be officially announced in the gazette.

On 14 November 2017 the Ministry of Commerce and Investment ("MoCI") issued a new resolution (the "Resolution") on the requirement for Limited Partnership, Limited Liability, and Closed Joint Stock companies (the "Companies") to organise, hold and keep shareholders register (the "Register") at the Companies headquarters in the Kingdom of Saudi Arabia (the "Kingdom"). The Resolution supplements articles 109, 162 and 225 of the Companies Law issued by Royal Decree No. M/3 dated 28/1/1437H. The Resolution is effective from the date of its publication in the official gazette.

Some of the key points in the Resolution which should be taken into consideration are outlined in the table below:

common KEY points that apply to companies
1

The Register should be strictly be kept at the Companies headquarters in the Kingdom

2

The Register must include the following:

  • Details of the Shareholder -
    • Natural person: name, profession, nationality, place of residency, chosen address for notification, and ID number ("Individual Details")
    • Juristic person: name and registration number (including place and date of issuance)

together ("Shareholders Details")

  • The Register should include specific additional details* -
    • The Individual Details of the ultimate shareholders, or the Individual Details of the natural persons who indirectly own shares in any of the Companies
    • The Individual Details of the natural persons who manage the juristic persons or entities that are direct , or indirect shareholders in any of the Companies

together ("Additional Details")

*The required Additional Details do not apply if the indirect ownership is through a public listed company in a regulated market, or through an investment fund licensed to operate in the Kingdom

Differences in the Register between the Companies

Limited Partnership & Limited Liability

Closed Joint Stock

3
  • Shares
    • Number and value of shares owned by each shareholder
    • Number and value of transferred shares and the type of transfer (i.e. sale, purchase, inheritance or offer)
    • Date of share transfer
    • Name of shareholder transferor and new shareholder transferee
    • Total number and value of shares owned by the shareholder after the transfer of shares
  • Shares
    • Number, type, category and nominal value of shares owned by each shareholder along with the amount paid of the shares value
    • Any changes that occur to the shareholders' shares (including details and date of occurrence)
    • Encumbrances on the shares i.e attachment, mortgages and details related thereto
    • Any other details the Board of Directors decides to record in the register.

Commonalities in the Register that apply to the Companies

4

Each shareholders is responsible to provide the company with the required Shareholders Details and Additional Details relating to the Register and any amendments to these information within a period not exceeding ten (10) working days

5

Companies should update/amend their Register/Articles of Association through the MoCI's website and should provide the MoCI with a copy of their Register within fifteen (15) business days from the date of updating/amending the Shareholders Details and the Additional Details relating to the Register and within three (3) months from the date of publishing the Resolution

Managers and directors of the Companies have the ultimate responsibility and liability of coordinating with the shareholders to create the Register and ensure that it is being periodically updated to reflect any changes in the Companies. They are also responsible for notifying the MoCI within the legally required time period.

We would be delighted to assist you in ensuring that your company is complying to these new rules and regulations in the Kingdom of Saudi Arabia.