The Saudi Council of Ministers approved a new law that aims to stimulate and develop the business system in the Kingdom. The new companies’ law has the flexibility to protect companies and empower the private sector.
The newly amended law aims to enhance corporate sustainability, support investment in SMEs by facilitating formal procedures and requirements and achieve greater market diversity.
The law addresses all challenges facing the business sector, in partnership with many public or private sectors, using and analyzing the views of professional bodies, international organizations, and specialized advisory offices.
The new law also lessens the regulatory requirements and procedures for SMEs and microenterprises, facilitates the requirements and procedures for establishing companies, gives flexibility in including special terms and conditions for corporate establishment contracts or articles of association, and makes possible mechanisms for entrepreneurs, capital holders, and private property.
The new law will regulate all provisions related to companies, whether commercial, nonprofit, or professional. It will guarantee that these provisions are available in a single legislative document, where stakeholders can adapt and take one of the companies’ forms, such as limited partnership company, joint stock company, and limited liability company, in addition to other forms.
It is worth mentioning that a new form of a company called “simplified Joint Stock Company” has been introduced. This form will fulfill the needs and requirements of entrepreneurship and bold capital growth. Furthermore, it will act as a possible investment associate for nonprofit companies to upgrade the third sector, stimulate social responsibility, and allow them to make a reasonable return on their business and spend it on nonprofit purposes.