Corporate Lawyers
We support companies across the Kingdom from incorporation through day-to-day governance, including ownership structures, shareholder decisions and reorganisations.
Overview
Company law in Saudi Arabia changed materially with the Companies Law issued under Royal Decree M/132, which widened contractual freedom between shareholders, introduced the simplified joint stock company, and reworked the rules on capital, governance and minority rights. The practical consequence is that many articles of association written before 2023 no longer reflect what the law now permits — and a great many companies are operating on constitutional documents narrower than they need.
Our corporate work sits in three layers. First, formation: choosing the legal form that fits the activity and the ownership structure. Second, the documents that govern the relationship between owners — articles of association, shareholders' agreement, board and committee rules, and deadlock mechanics. Third, the day-to-day: general assembly resolutions, capital changes, admitting or removing a shareholder, and restructuring across a group.
Most problems we are called into do not come from the law; they come from silence. Articles that never say what happens when a shareholder dies, refuses to sign, or wants to sell to an outsider. When the disagreement arrives, those gaps become the entire dispute. We draft on the assumption that a falling-out will happen one day — which is precisely what makes it solvable without a courtroom.
The legal framework
The primary reference is the Companies Law and its implementing regulations, alongside other regimes that intersect with it depending on the activity and the nationality of the owners:
- The Companies Law issued under Royal Decree M/132 and its implementing regulations
- Ministry of Commerce: commercial register, notarisation of resolutions and publication of amendments
- The investment authority: foreign investment licensing and ownership conditions
- Capital Market Authority rules for listed joint stock companies and public offerings
- The Bankruptcy Law and the Civil Transactions Law on liability and obligations
- The corporate governance regulations and disclosure standards for entities subject to them
Situations we handle
Two equal shareholders and a stuck decision
A 50/50 split looks fair until the two disagree. We build deadlock mechanics in advance: a casting vote, an independent valuer, or a buy-out at a price set by a third party.
Bringing a new investor onto the cap table
A capital increase is not just an accounting entry; it redistributes control. Entry terms, dilution and pre-emption rights belong in the documents before signature, not after.
A shareholder exiting or selling a stake
Transfers to outsiders, rights of first refusal and the valuation method need to be settled in writing. Without them, a routine exit becomes a claim that runs a year or more.
Death of a shareholder
A stake passes to the heirs unless the documents deal with it. We put in place an arrangement that protects the continuity of the business and the heirs' right to value.
Restructuring a group
Merging entities, carving out an activity or inserting a holding company — sequenced so that zakat, tax and existing licences are considered before any step is executed.
Costly mistakes we see
- 1
Copying an off-the-shelf constitution
The template covers the statutory minimum. It says nothing about deadlock, valuation or restrictions on transfers — the only clauses you will ever actually need in a dispute.
- 2
Confusing ownership with control
Holding the larger stake does not automatically decide every question. The manager's authority and the matters reserved to the shareholders must be written down expressly.
- 3
Not documenting resolutions
Undocumented shareholder decisions lose their force in a dispute and before government bodies. A minute written at the time costs a fraction of proving the same point later.
- 4
Leaving documents unrevised after the reform
The current law allows arrangements that were previously impossible. Staying on old paperwork means voluntarily giving up flexibility the legislator has already granted you.
How the procedure runs, step by step
The Companies Law issued in 2022 reset incorporation and governance in Saudi Arabia. The item most often fixed late and expensively is the constitutional document written in a hurry at the start.
- 1
Choose the legal form
An LLC, a closed joint stock company, a simplified joint stock company and a single-shareholder company differ in capital, governance and how easily an investor can come in. The wrong form means a full restructuring at the first funding round.
- 2
Secure the pre-licence for the activity
Some activities require a sector licence before commercial registration: MISA for foreign investors, and the sector regulators for financial, health and education activities. We verify this before reserving the name, not after.
- 3
Draft the constitution and the shareholders’ agreement
This is where you settle what the statute does not: share valuation, transfer restrictions, pre-emption, exit mechanics, and how to break a deadlocked vote. A clear shareholders’ agreement prevents the dispute that later kills the company.
- 4
Incorporate and register
Documents are issued through the Ministry of Commerce platform, then commercial registration, ZATCA and GOSI registration and the bank account follow. A delay in any of these stalls operations even though incorporation is legally complete.
- 5
Ongoing governance compliance
The shareholders’ register, assembly minutes, financial statements and conflict-of-interest disclosure are continuing obligations. Their absence is the first thing an investor or auditor stops on during due diligence.
Documents we will ask you for
- Shareholders’ IDs or their commercial registers
- The proposed trade name and alternatives
- The intended activity and share capital
- Any existing constitution or shareholders’ agreement
- MISA licence for a foreign investor
- The intended ownership structure and shareholdings
Fees and timelines
We work on corporate matters at a fixed fee agreed in advance for each defined deliverable — articles of association, a shareholders' agreement, a resolutions pack, a governance review — rather than open hourly billing with no ceiling. Open-ended matters such as a restructuring or a shareholder dispute are broken into phases, each with its own written scope and fee.
On timing: forming a limited liability company for Saudi or GCC owners is normally completed within a few working days once the documents are in order, while foreign-owned entities depend on the investment licensing route. Negotiated shareholders' agreements typically take two to six weeks, and most of that is negotiation between the parties rather than drafting.
Common questions
Which legal form suits my business?
It depends on the number of owners, whether a foreign investor is involved, whether you plan to raise capital later, and the licensing requirements of the activity itself. A limited liability company fits most businesses; the simplified joint stock company has become the practical choice for companies planning investment rounds. We recommend a form after two questions: who owns it, and who joins later?
Can a foreign investor own a Saudi company outright?
In many activities yes, under a licence from the investment authority, with exceptions and restricted or excluded activities whose list changes over time. The practical route is to verify the position for your specific activity before you sign anything or move money.
Do we need a shareholders' agreement if we already have articles?
The articles are a public, registered document. A shareholders' agreement is private and handles what you would rather not publish: valuation, deadlock, non-compete and distribution policy. The first creates the company; the second protects the relationship between the people who own it.
How long does incorporation take?
With complete documents and verified owner identities, a domestic incorporation is usually done within a few working days. Files with a foreign element, or activities needing a sector licence, take longer — driven by the licensing authority rather than by us.
What if my partner refuses to sign a necessary resolution?
The answer starts in the documents. If they contain a deadlock mechanism we use it directly. If not, we look at the statutory majority required for that decision; in serious cases the route may be a claim to dissolve the company or remove the shareholder where the grounds exist. This is why those clauses get written early.
Do we have to amend our articles after the new Companies Law?
There is no obligation to rewrite every clause, but many older constitutions repeat restrictions the law no longer imposes. A short review usually surfaces three or four clauses worth updating, particularly around share transfers and how decisions are taken.
Who is liable for the company's debts?
As a rule a shareholder's liability is limited to their stake, but that protection falls away in defined cases such as gross fault, fraud, or breach of the rules on capital and liquidation. Following the statutory procedures is what keeps the protection real.
Will you deal with the Ministry of Commerce on our behalf?
Yes, under a power of attorney: notarising resolutions, amending the register, publishing changes and responding to the authority's observations. We stay accountable for the follow-through until the final output is issued.
When do we need a corporate lawyer rather than an accountant?
The accountant answers what it costs. The lawyer answers who holds the decision and what happens when the parties disagree. Any step that changes ownership or control — a new investor, a departing partner, a merged activity — needs both views, and neither substitutes for the other.
Related services
Corporate Governance Lawyers
We build the governance and compliance frameworks boards and committees need to decide soundly.
Company Formation Lawyers
We handle company formation from choice of legal form through issue of the commercial register.
Corporate Documentation Lawyers
We prepare assembly minutes, shareholder resolutions, powers of attorney and other corporate records.