There are several types of companies in the Kingdom of Saudi Arabia, subject to the provisions of the Saudi Companies Law. These types differ in terms of the legal liability of partners or shareholders, the required capital, incorporation procedures, and management. Here are the most prominent types of companies in Saudi Arabia:
1. Personal Companies:
* General Partnership:
* Consists of two or more partners who are jointly liable to the extent of all their assets for the company’s debts and obligations.
* There is no minimum capital requirement.
* Relies on personal trust between the partners.
* The company is named after all partners or one of them with the addition of the word “and partners.”
* Each partner has the right to manage unless otherwise agreed.
* Limited Partnership:
* Consists of two categories of partners:
* **General Partners:** Jointly liable to the extent of all their assets for the company’s debts and obligations and have the right to manage.
* **Limited Partners:** Liable for the company’s debts and obligations to the extent of their capital shares, but do not have the right to manage.
* There is no minimum capital requirement.
* The company name must include the names of all general partners or one of them, with the addition of the word “and partners” or an indication of a limited partner.
* Joint Venture Company:
* A contract between two or more persons who agree to conduct a specific business and share the resulting profits and losses.
* It does not have legal personality and is not subject to registration and publication procedures.
* It is anonymous and may only deal with third parties in their own name.
* There is no minimum capital requirement.
2. Capital Companies:
* Joint Stock Company (JSC):
* Its capital is divided into negotiable shares of equal value.
* Shareholders’ liability is limited to the value of their shares in the capital.
* The issued capital must not be less than (500,000) five hundred thousand Saudi riyals.
* It is managed by a board of directors elected by the shareholders.
* It is subject to stricter regulatory oversight and procedures.
* Limited Liability Company (LLC):
* Consists of one or more partners (not more than fifty).
* A partner is liable for the company’s debts and obligations to the extent of his or her share in the capital.
* The capital must not be less than 5,000 Saudi Riyals.
* It is managed by one or more managers from among the partners or others.
* It is considered one of the most common types of companies in the Kingdom.
3. Other Types:
* Professional Company:
* Established by individuals with specialized academic qualifications to practice a liberal profession.
* It takes the form of a partnership (general partnership, limited partnership, or limited liability company).
* It is subject to the provisions of the Companies Law in addition to the regulations specific to the profession.
* Holding Company:
* A company established to control other companies by owning a majority of their shares or stakes.
* It does not usually engage in an original commercial activity.
* It takes the form of a joint-stock company or a limited liability company.
* Non-Profit Company:
* Established for non-profit purposes that serve the community or a specific group.
* Subject to the provisions of the Companies Law, taking into account its non-profit nature and its own regulations.
* Can take the form of a non-profit limited liability company.