{"id":8432,"date":"2025-07-07T11:48:56","date_gmt":"2025-07-07T11:48:56","guid":{"rendered":"https:\/\/sarihlaw.com\/?p=8432"},"modified":"2025-07-07T11:48:56","modified_gmt":"2025-07-07T11:48:56","slug":"%d8%b1%d8%b3%d9%88%d9%85-%d8%aa%d8%a3%d8%b3%d9%8a%d8%b3-%d8%b4%d8%b1%d9%83%d8%a9-%d8%b0%d8%a7%d8%aa-%d9%85%d8%b3%d8%a4%d9%88%d9%84%d9%8a%d8%a9-%d9%85%d8%ad%d8%af%d9%88%d8%af%d8%a9-%d9%81%d9%8a-%d8%a7","status":"publish","type":"post","link":"https:\/\/sarihlaw.com\/en\/%d8%b1%d8%b3%d9%88%d9%85-%d8%aa%d8%a3%d8%b3%d9%8a%d8%b3-%d8%b4%d8%b1%d9%83%d8%a9-%d8%b0%d8%a7%d8%aa-%d9%85%d8%b3%d8%a4%d9%88%d9%84%d9%8a%d8%a9-%d9%85%d8%ad%d8%af%d9%88%d8%af%d8%a9-%d9%81%d9%8a-%d8%a7\/","title":{"rendered":"Fees for establishing a limited liability company in Saudi Arabia and registration procedures"},"content":{"rendered":"

Establishing a Limited Liability Company in Saudi Arabia \u2013 A Comprehensive Legal Guide<\/strong><\/h1>\n

The limited liability company is considered one of the most common legal structures in the Kingdom of Saudi Arabia, especially among entrepreneurs and investors, due to the protection it offers to partners and its flexibility in management. The Saudi Companies Law has regulated this type of company with a clear and advanced legal framework.<\/p>\n

In this article, we will briefly review everything you need to know about the limited liability company: its definition, its advantages and disadvantages, the conditions and procedures for establishment, as well as the partners' obligations and legal liability.<\/p>\n

\u00a0<\/strong><\/p>\n

What is a Limited Liability Company?<\/strong><\/h2>\n

A limited liability company is an entity established between two or more persons (and may be established by one person in specific cases), each contributing a share in the capital, whether in cash or in-kind. The most prominent feature of this type of company is the limitation of each partner's liability to the extent of their share in the capital. They are not liable for the company's debts and obligations except within the limits of that share.<\/p>\n

According to Article 71 of the Saudi Companies Law, issued by Royal Decree No. (M\/132) for the year 1443H.<\/strong>, the limited liability company is considered one of the officially approved forms in the Kingdom, and it enjoys an independent legal personality immediately upon its registration in the Commercial Register.<\/p>\n

 <\/p>\n

Advantages of the Limited Liability Company:<\/strong><\/h3>\n

The limited liability company possesses a number of characteristics that make it popular in the Kingdom of Saudi Arabia, especially among local and foreign entrepreneurs and investors:<\/p>\n

    \n
  1. Limitation of Partners' Liability: <\/strong>A partner is not liable for the company's debts except to the extent of their share, which provides them with significant legal and financial protection.<\/li>\n
  2. Possibility of Formation by a Single Person: <\/strong>The law permits the formation of a limited liability company by only one person, whether Saudi or foreign (in accordance with the Investment Law).<\/li>\n
  3. Flexibility in Management: <\/strong>The law allows the appointment of one or more managers to run the company without the need to form a board of directors, which grants it ease in decision-making.<\/li>\n
  4. Transfer of Shares: <\/strong>Partners may assign their shares to others in accordance with specific controls, which facilitates sale transactions or attracting new investors.<\/li>\n
  5. Suitable for Startups and SMEs: <\/strong>This type of company is suitable for small and medium-sized private sector projects that require a flexible and secure legal entity.<\/li>\n<\/ol>\n

     <\/p>\n

    Defects of the Limited Liability Company<\/strong><\/h4>\n

    Despite the regulatory and legal advantages enjoyed by the limited liability company, there are some challenges that investors must consider before choosing this legal form:<\/p>\n

      \n
    1. Restrictions on Share Trading: <\/strong>A partner may not assign their share to a non-partner except after following specific procedures, including first offering the share to the other partners, which may limit the speed of disposal.<\/li>\n
    2. Maximum Number of Partners: <\/strong>The number of partners may not exceed fifty partners, which may restrict expansion possibilities in certain activities or attracting a large number of investors.<\/li>\n
    3. Administrative and Financial Oversight: <\/strong>The company is subject to increased regulatory requirements if its capital or number of partners exceeds a certain limit, such as appointing an external auditor if the capital exceeds one million Saudi Riyals, according to Article (78) of the System.<\/li>\n
    4. Restriction of Certain Activities: <\/strong>Limited liability companies are not permitted to engage in certain activities that the System requires to be managed through joint-stock companies, such as banks or insurance companies.<\/li>\n
    5. Impact of a Partner's Sudden Exit: <\/strong>The withdrawal or death of a partner may necessitate amending the articles of association or even the dissolution of the company, unless the articles provide otherwise.<\/li>\n<\/ol>\n

       <\/p>\n

      Partners' Liability in a Limited Liability Company<\/strong>:<\/strong><\/h4>\n

      One of the most important features of this type of company is that partners' liability is limited<\/strong>. According to Article (71) of the Companies System<\/strong>A partner shall not be liable for the company's debts or obligations except to the extent of their share in the capital.<\/p>\n

      Partners may not be required to pay financial obligations exceeding the value of their contributions, which provides clear legal protection for their personal assets. However, any breach by a partner of the provisions of the system, fraud, or illegal act shall result in their personal liability, whether civil or criminal.<\/p>\n

      And it has been clarified by the Executive Regulations of the Companies System<\/strong> that partners shall be jointly and severally liable only in cases where fraud or an act with intent to harm others is proven.<\/p>\n

       <\/p>\n

      Who bears the debts of a limited liability company?<\/strong><\/h4>\n

      A limited liability company has an independent legal personality, and it is the one responsible for its debts and obligations to third parties. The partners' liability does not extend to their personal assets, but is limited to the value of the shares they contributed to the capital.<\/p>\n

      However, there are exceptional cases where partners or the manager can be held personally liable, such as:<\/p>\n

        \n
      • If the company's name is used in a fraudulent or non-compliant manner.<\/li>\n
      • If the company's articles of association or any amendment thereto are not registered in the Commercial Register.<\/li>\n
      • If the partner or manager participates in acts involving fraud or misrepresentation.<\/li>\n<\/ul>\n

        In these cases, the liability shifts from 'limited' to 'personal', and the concerned person shall be liable for damages incurred by the company or third parties.<\/p>\n

         <\/p>\n

        Capital of a Limited Liability Company in Saudi Arabia<\/strong>:<\/strong><\/h4>\n

        Stipulated by the Companies System<\/strong> The capital of a limited liability company must be divided into equal shares in value, and these may be cash or in-kind. It is also required that the capital be paid in full upon incorporation, and that no tradable instruments representing these shares be issued.<\/p>\n

        According to the Implementing Regulations, the incorporation contract must specify:<\/p>\n

          \n
        • The amount of capital.<\/li>\n
        • The number and value of shares.<\/li>\n
        • How they are distributed among the partners.<\/li>\n<\/ul>\n

          The company must also appoint an external auditor if the capital exceeds one million Saudi Riyals, or if the number of partners exceeds twenty, as stated in the Implementing Regulations.<\/p>\n

           <\/p>\n

           <\/p>\n

          Fees for establishing a limited liability company in Saudi Arabia<\/strong>:<\/strong><\/h4>\n

          The fees for establishing a limited liability company in the Kingdom are subject to the provisions of the Companies Law and the Commercial Registration Law, and they vary according to the type of activity and the degree of licensing:<\/p>\n

            \n
          • 1,200<\/strong> Saudi Riyal<\/strong> Includes commercial registration fees.<\/li>\n
          • 500<\/strong> Approximately Riyals<\/strong> For publication fees.<\/li>\n<\/ul>\n

            Note that these fees do not include Value Added Tax (15%).<\/p>\n

             <\/p>\n

            What are the conditions for establishing a limited liability company in Saudi Arabia?<\/strong><\/h4>\n

            Specify The Saudi Companies Law <\/strong>The regulatory conditions for establishing any company, including a limited liability company, are as follows:<\/p>\n

              \n
            1. The existence of a written incorporation contract<\/strong>, containing the partners' data, the share percentages, the company's purpose, and the manager's data.<\/li>\n
            2. Payment of the full capital<\/strong> as determined, whether in cash or in-kind.<\/li>\n
            3. Registration of the company in the Commercial Register<\/strong> with the Ministry of Commerce.<\/li>\n
            4. Submission of proof of identity of the founders<\/strong> (Civil Registry\/Commercial Registry\/Investment License).<\/li>\n
            5. Appointment of one or more managers<\/strong> as stipulated in the incorporation contract.<\/li>\n
            6. Not exceeding fifty partners<\/strong>.<\/li>\n
            7. It is also required not to engage in prohibited or restricted activities except after obtaining the necessary license from the competent authority, such as: the Ministry of Health, the Capital Market Authority, or the Real Estate General Authority.<\/li>\n<\/ol>\n

               <\/p>\n

              What are the procedures for establishing a limited liability company?<\/strong><\/h4>\n

              The incorporation procedures are conducted via the Ministry of Commerce platform and include the following steps:<\/strong>:<\/strong><\/p>\n

                \n
              1. Log in to the \"Absher Business\" portal or the \"Business Center Platform\".<\/li>\n
              2. Select the \"Establish a Limited Liability Company\" service.<\/li>\n
              3. Enter the partners' data, shares, and the company's purpose.<\/li>\n
              4. Select a template for the Articles of Association or upload a custom one.<\/li>\n
              5. Pay the required fees electronically.<\/li>\n
              6. Submit the application for ratification by the partners through digital authentication or a notary public.<\/li>\n
              7. Register the company in the Commercial Register and issue the electronic incorporation certificate.<\/li>\n<\/ol>\n

                After completing the above steps, the Limited Liability Company becomes legally established, acquires legal personality, and may commence its activity immediately after obtaining the necessary licenses, if any.<\/p>\n

                 <\/p>\n

                Template for the Articles of Association of a Limited Liability Company \u2013 Ministry of Commerce:<\/strong><\/h4>\n

                The Articles of Association are considered the primary legal document that regulates the relationship between the partners, and the Ministry of Commerce oversees the standardization of its templates through an interactive electronic portal. According to the Implementing Regulations, the Articles of Association must include the following points:<\/p>\n

                  \n
                1. Company Name<\/strong> And its type (Limited Liability Company).<\/li>\n
                2. Company Purposes<\/strong> In detail.<\/li>\n
                3. Capital<\/strong> And the number of shares, their value, and the method of their distribution.<\/li>\n
                4. Partners' Data<\/strong> (Names, nationalities, lineage).<\/li>\n
                5. Manager's Data<\/strong> And their powers, and the extent of their connection to a specific or indefinite contract.<\/li>\n
                6. Company Duration<\/strong>.<\/li>\n
                7. Method of distributing profits and losses<\/strong>.<\/li>\n
                8. Mechanism for assigning shares or admitting new partners<\/strong>.<\/li>\n
                9. Cases of company dissolution and liquidation<\/strong>.<\/li>\n<\/ol>\n

                   <\/p>\n

                  This contract is submitted electronically via the Ministry of Commerce's “Business Center” platform, and is authenticated via the Unified National Access or a licensed notary. The Ministry provides a flexible guiding template that can be modified according to the partners' agreement.<\/p>\n

                  Establishing a limited liability company in the Kingdom of Saudi Arabia is a sound legal and economic choice, providing protection for partners and granting flexibility in management. To ensure the company is established within the regulatory frameworks, it is recommended to refer to the original texts of the Companies Law and its executive regulations when preparing the incorporation contract, seek the assistance of a licensed lawyer or a legal consultant specialized in companies, ensuring the proposed activity complies with regulatory and licensing requirements, and not using ready-made contract templates without modifying them to suit the partners' needs.<\/p>\n

                  At Sarih \u2013 Lawyers and Consultants, (Best Lawyers in Riyadh) we are with you in all stages of establishing and developing your company.<\/strong>.<\/strong><\/p>\n

                  We accompany you from the first moment until your business stabilizes, through integrated services including<\/strong>:<\/strong><\/p>\n

                    \n
                  1. Preparing a customized incorporation contract in accordance with the Saudi Companies Law.<\/li>\n
                  2. Thorough legal review of activities and licenses.<\/li>\n
                  3. Electronic notarization of contracts through official channels.<\/li>\n
                  4. Full support in amending the legal entity or admitting new partners.<\/li>\n
                  5. Drafting and reviewing commercial contracts and agreements.<\/li>\n
                  6. Regulating relationships between partners or shareholders.<\/li>\n
                  7. Your legal representation in commercial disputes.<\/li>\n
                  8. Building governance regulations and ensuring regulatory compliance.<\/li>\n<\/ol>\n

                     <\/p>","protected":false},"excerpt":{"rendered":"

                    \u062a\u0623\u0633\u064a\u0633 \u0634\u0631\u0643\u0629 \u0630\u0627\u062a \u0645\u0633\u0624\u0648\u0644\u064a\u0629 \u0645\u062d\u062f\u0648\u062f\u0629 \u0641\u064a \u0627\u0644\u0633\u0639\u0648\u062f\u064a\u0629 \u2013 \u062f\u0644\u064a\u0644 \u0642\u0627\u0646\u0648\u0646\u064a \u0634\u0627\u0645\u0644 \u062a\u064f\u0639\u062f \u0627\u0644\u0634\u0631\u0643\u0629 \u0630\u0627\u062a \u0627\u0644\u0645\u0633\u0624\u0648\u0644\u064a\u0629 \u0627\u0644\u0645\u062d\u062f\u0648\u062f\u0629 \u0645\u0646 \u0623\u0643\u062b\u0631 \u0627\u0644\u0623\u0634\u0643\u0627\u0644 \u0627\u0644\u0642\u0627\u0646\u0648\u0646\u064a\u0629 \u0634\u064a\u0648\u0639\u0627\u064b \u0641\u064a \u0627\u0644\u0645\u0645\u0644\u0643\u0629 \u0627\u0644\u0639\u0631\u0628\u064a\u0629 \u0627\u0644\u0633\u0639\u0648\u062f\u064a\u0629\u060c \u062e\u0627\u0635\u0629 \u0628\u064a\u0646 \u0631\u0648\u0627\u062f \u0627\u0644\u0623\u0639\u0645\u0627\u0644 \u0648\u0627\u0644\u0645\u0633\u062a\u062b\u0645\u0631\u064a\u0646\u060c \u0644\u0645\u0627 \u062a\u0648\u0641\u0631\u0647 \u0645\u0646 \u062d\u0645\u0627\u064a\u0629 \u0644\u0644\u0634\u0631\u0643\u0627\u0621 \u0648\u0645\u0631\u0648\u0646\u0629 \u0641\u064a \u0627\u0644\u0625\u062f\u0627\u0631\u0629. \u0648\u0642\u062f \u0646\u0638\u0645 \u0646\u0638\u0627\u0645 \u0627\u0644\u0634\u0631\u0643\u0627\u062a \u0627\u0644\u0633\u0639\u0648\u062f\u064a \u0647\u0630\u0627 \u0627\u0644\u0646\u0648\u0639 \u0645\u0646 \u0627\u0644\u0634\u0631\u0643\u0627\u062a \u0628\u0625\u0637\u0627\u0631 \u0642\u0627\u0646\u0648\u0646\u064a \u0648\u0627\u0636\u062d \u0648\u0645\u062a\u0637\u0648\u0631. \u0641\u064a \u0647\u0630\u0647 \u0627\u0644\u0645\u0642\u0627\u0644\u0629\u060c \u0646\u0633\u062a\u0639\u0631\u0636 […]<\/p>\n","protected":false},"author":2,"featured_media":8825,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53],"tags":[],"class_list":["post-8432","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-53"],"_links":{"self":[{"href":"https:\/\/sarihlaw.com\/en\/wp-json\/wp\/v2\/posts\/8432","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sarihlaw.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sarihlaw.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sarihlaw.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/sarihlaw.com\/en\/wp-json\/wp\/v2\/comments?post=8432"}],"version-history":[{"count":0,"href":"https:\/\/sarihlaw.com\/en\/wp-json\/wp\/v2\/posts\/8432\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sarihlaw.com\/en\/wp-json\/wp\/v2\/media\/8825"}],"wp:attachment":[{"href":"https:\/\/sarihlaw.com\/en\/wp-json\/wp\/v2\/media?parent=8432"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sarihlaw.com\/en\/wp-json\/wp\/v2\/categories?post=8432"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sarihlaw.com\/en\/wp-json\/wp\/v2\/tags?post=8432"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}