Company liquidation in Saudi Arabia
A Saudi closing opens with a signed statement that the company can pay. We prepare that statement, collect the clearances the ministry asks for, and take the entry off the register.
Solvency statement
Заявление о долгах
30 days old at most
не старше 30 дней
Liquidator named
Ликвидатор назначен
within 60 days
в течение 60 дней
Inventory
Опись имущества
90 days to draw up
90 дней на опись
A false statement
Ложное заявление
up to 5m riyals
до 5 млн риялов
When you need company liquidation in Saudi Arabia
It starts with a signed statement
Before the dissolution is voted on, the managers or the board state in writing that they examined the company and that its assets cover its debts by the end of the planned period.
The statement has thirty days
It has to be put to the partners, the general assembly or the shareholders within 30 days of being drawn up. Older than that and the vote rests on a stale document.
Say it wrongly and it is criminal
A statement on the sufficiency of assets that is misleading on purpose carries up to three years of imprisonment and a fine reaching five million riyals.
Sixty days to name a liquidator
The appointment has to be made within 60 days of the company ending. Miss it and the court appoints on the application of any partner, shareholder or interested person.
A company that never traded
Where the company did no business at all, the regulations replace the liquidation with a unanimous decision and the partners' personal undertaking to pay anything that appears.
What you get
- The solvency statement drawn up and dated so it still counts
- The clearances from the investment, banking and market regulators
- A liquidator appointed inside the 60 days and published
- The inventory and the auditor's report on it inside 90 days
- The final report approved and the company struck off
What is required to liquidate a Saudi company
A Saudi closing does not open with a call to creditors. It opens with a solvency statement, and the law spends most of its attention on making that statement true: who signs it, how fresh it has to be, what happens if the assets turn out not to cover the debts, and what it costs the person who signed.
What the same service looks like elsewhere is described under company liquidation, and the wider picture of our work in the country is on the Saudi Arabia page.
What the ministry asks for before it lets you close
- A cancellation certificate from the investment ministry where the company is foreign, mixed, or a branch whose head office sits outside the Kingdom.
- Approval from the central bank where the activity is one it supervises.
- Approval from the capital market regulator where the company is licensed by it.
- An exit from any shareholdings the company holds in other companies before its own closing goes through.
- Partner signatures authenticated by a chamber of commerce, a ministry employee or a bank inside the Kingdom.
Two ways out, and they are not alike
| Step | A company that traded | A company that never did |
|---|---|---|
| The decision | partners or the general assembly | unanimous, all of them |
| Liquidator | appointed inside 60 days | none appointed |
| Announcement | published with the register | none |
| Inventory | within 90 days, with the auditor | a declaration of no assets |
| Final report | detailed, then approved | the undertaking counts as one |
| Who answers afterwards | the liquidator, for five years | every partner, personally |
The dormant route is cheaper because the risk moves rather than disappears. The partners declare that the company did no business, holds no assets and owes nothing to anyone including the State, and then undertake jointly and severally to settle from their own money anything that turns up later. That undertaking is treated by the regulations as the completion report, the final account and the strike-off request all at once.
Sources: the solvency statement and its 30 days, the 60 days for the liquidator, the 90-day inventory, the three-year ceiling and the five-million-riyal penalty — articles 242–260 of the Companies Law, Royal Decree M/132; the dormant route — article 93 of its Implementing Regulations.
Stages of work
Examining the company before the vote
The managers or the board go through the assets and the debts and put their conclusion in writing. If the assets do not cover the debts, the dissolution cannot be voted at all, and the route changes to the courts.
Collecting the clearances
Investment, banking and capital market approvals are gathered according to what the company is and what it does, and any shareholdings it holds in other companies are exited before the file moves on.
The resolution and the announcement
The partners resolve to liquidate on the approved template and authenticate their signatures, and the liquidator signs the separate resolution that announces the closing.
Appointing and publishing the liquidator
The appointment happens inside 60 days of the company ending and is registered and published with the commercial register. Its decision also fixes powers, remuneration and the period.
The inventory and the auditor
Within 90 days of taking office the liquidator draws up an inventory of assets, rights and liabilities and asks the company's auditor for a report on it.
Paying, and stopping if it does not add up
Debts are paid by priority, with liquidation debts first. If at any point the assets stop covering them, the liquidator has to notify everyone and go to the court instead.
Final report and strike-off
A detailed report of everything the liquidator did goes to whoever appointed him. Once it is approved, the end of the liquidation is registered and published, and it counts against outsiders only from the strike-off itself.
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