The company may establish its own company (limited liability or closed joint-stock companies), provided that its capital is not less than (5) million Saudi Riyals. The management of the company may, if necessary, establish other branches, offices and agents within or outside the Kingdom. The term of the company is ninety-nine years according to the Islamic lunar calendar, starting from the date of registration in the commercial register.
The subscriber will pay during the subscription a percentage of 50% of the nominal value of the share in the name of the underlying company. The company's shares will be traded in accordance with the Capital Market Rules and Regulations. The company may purchase its shares or pledge them according to the rules established by the competent authorities.
Chapter (3)
Board of Directors
If a position of a member of the board of directors representing the shareholders becomes vacant, the board can then appoint a provisional member in that vacant position, provided they have qualifying experience. Subject to the power of the General Meeting, the board of directors will have the extensive authority to manage the company and conduct its affairs and dispose of its assets and property and real estate. The decision of the board of directors will specify the uses of the loan and the way to pay it off.
In the terms of the loan and the guarantees provided, the board of directors must take care not to harm the company, the shareholders and the general guarantees of the creditors. The board of directors has the right to vote, transfer, contract, commit and associate in the company's name and on behalf of the company. Discharge is a right to the rights of the board, and it can authorize in that connection.
Subject to the powers set out in paragraph (2), the board will define the powers of the Chairman and Managing Director and they can also determine the appropriate rewards and benefits apart from the rewards that are determined for the board members. The managing director will be responsible for following up on the implementation of the policy formulated by the board, in addition to other powers and authorities entrusted to him by the board from time to time. Subject to the competence determined in paragraph (2), the board will appoint a CEO, define his powers, responsibilities and salary.
The Board of Directors appoints a secretary that it chooses from among its members or others. The decisions of the board of directors are made by the majority of the opinions of the members present or represented. Minutes are written about the deliberations and decisions of the board of directors, which are signed by the president, the members of the board of directors present and the secretary.
The board of directors shall constitute appropriate committees for the activities and needs of the company and may authorize these committees to assume such powers as are appropriate to them.
Chapter (4)
Shareholders' Assemblies
The meeting can only take place if a number of subscribers representing at least half of the capital are present. In all cases the second meeting will take place, regardless of the number of subscribers represented. The Constituent Assembly is responsible for the matters contained in Article (63) of the Companies Act.
The regular general assembly is responsible for all matters related to the company, except for matters entrusted to the extraordinary assembly. The Extraordinary General Meeting is competent to amend the company's statutes, except in matters prohibited by general law. The board of directors can convene a regular meeting if the auditor, the audit committee or several shareholders representing at least 5% of the capital are present.
A regular general meeting is not valid if it is not attended by several shareholders representing at least a quarter (25%) of the capital. In all cases, the second meeting is valid regardless of the number of shares represented at it. An extraordinary general meeting is not a meeting if it is not attended by shareholders representing half (50%) of the capital.
In all cases, the second meeting will take place if it is attended by a number of shareholders representing at least a quarter (25%) of the capital. The decisions of the Constituent Assembly are taken by an absolute majority of the shares represented therein.
Chapter (5)
Audit Committee
The number of its members shall be not less than three and not more than five members, not from the board of directors' executive members, whether from the shareholders or otherwise. The resolution will state the committee's duties, its work controls and rewards of its members. The meeting of the audit committee will be valid if it is attended by the majority of its members.
For what purposes can he have access to company records and documents, in addition to requesting explanations or statements from members of the board of directors or executive management. It can request the board of directors to convene a general meeting of the company if the board of directors has hindered its work or if the company has suffered major damage or loss. The audit committee must consider the company's financial statements, the auditor's reports and explanations, and express any opinions about them.
The board of directors shall keep sufficient copies of this report at the company's headquarters at least twenty-one days before the date of the general meeting convention to provide each shareholder with a copy thereof.
Chapter (6) The Auditor
The company will have one (or more) certified auditors who will be appointed by the Ordinary General Meeting and who will determine the remuneration and the duration of the work. If the accountant has completed the appointed term of appointment, he can be reappointed two years after its expiry. The meeting may change these at any time, without prejudice to their right to compensation, if the change has taken place at an inappropriate time or for unauthorized reasons.
The auditor may have access to the company's books, records and other documents at any time. To verify the assets and liabilities of the company and everything that falls within the scope of its work. If the statutory auditor encounters difficulties in this regard, he will prove this in a report that he will submit to the board of directors.
If the assembly has not facilitated the work of the auditor, they will ask the board of directors to call the Ordinary General Assembly to consider that matter. The auditor cannot disclose to the shareholders other than the General Assembly or others the secrets that they had with them because of their work.
Chapter (7)
Company Accounts & Profits Distribution
At the end of each fiscal year of the company, the board of directors shall prepare the company financial statements and a report about its activity and financial position about the ended fiscal year. The board shall put these documents at disposal of the auditor 45 days at least before the date specified for the General Assembly convention. The chairman shall provide the shareholders with the company financial statements, report of board of directors and report of the auditor unless they are published in a daily newspaper distributed in the company's headquarters.
10% of the net profit is allocated to the company's statutory reserves. The General Assembly can stop creating such a reserve when it reaches 30% of the paid-in capital. This reserve formation can be suspended if it has reached 25% of the capital.
The Ordinary General Meeting can, based on a proposal from the board, decide to form other reserves to the extent that serves the interest of the company or guarantees a fixed profit distribution to the shareholders as far as possible. A percentage of the remaining profits of not less than (5%) of the company's paid-up capital will be distributed to the shareholders. The shareholder will be entitled to their profit share by virtue of the decision of the General Meeting issued in this regard.
The winnings are eligible for shareholders registered in the shareholder registers at the end of the maturity date. If the company has not paid the determined percentage from the profit pursuant to the provision of Article (114) of the Companies Act for three consecutive years, the closed meeting of shareholders held pursuant to the provision of Article (89) shall be the Companies Code can decide whether they will attend the General Meeting of the company and participate in the vote, or whether they will appoint representatives to the board of directors in proportion to the value of their shares in the capital.
Chapter (8)
Disputes
Every shareholder has the right to bring a liability claim against the members of the board of directors as determined for the company, if they have suffered damage due to an error on their part. The shareholder may not file the said claim unless the company's right to file it still exists.
Chapter (9)
Dissolution and Liquidation of the Company
Upon termination, the company is dissolved and retains its legal personality to the extent necessary for liquidation. The decision includes the appointment of the liquidator, identifies their powers, fees, limitations of their powers and the period necessary for liquidation. The optional liquidation period may not exceed five years and may not be extended further, except by court decision.
The shareholders' meetings will exist during the liquidation period and their role will be limited to the exercise of their powers that do not conflict with the liquidator's powers.
Chapter (10)
Final Provisions
