The Companies Law: key changes every company owner should know

The Companies Law that took effect in January 2023 modernised how companies are formed and run in the Kingdom.

What changed

• One law for all forms, including professional companies and non-profit companies.
• The simplified joint-stock company (SJSC): a flexible form suited to startups and companies planning to attract investors.
• LLCs with one partner are allowed, with the partner's liability limited to the capital.
• More freedom in the articles of association to set governance rules, share classes and exit terms.
• Clearer duties for managers and directors, including conflicts of interest and liability.

Practical obligations

• Keep the articles of association and CR data up to date with any change in partners, capital or managers.
• Prepare annual financial statements and, where required, have them audited.
• Hold partner or shareholder meetings as the articles require, and keep minutes.
• Watch losses: the law sets requirements when losses reach a significant share of capital.

Tip

If your articles were written before 2023, review them — new options in the law may suit your business better.