mc_gov_sa · executive_regulation · processed · 22 chunks
[Non-Text] وزاره التجاره Ministry of Commerce VISION ل.ب 2*30 المركبه العربيه السعوديه KINGDOM OF SAUDI ARABIA Implementing Regulations of the Professional Companies Law Chapter One: General Provisions Article 1: Definitions 1. The words contained herein shall have the meanings ascribed to them in Article (1) of the Professional Companies Law promulgated by Royal Decree No. (M/17) dated 26/01/1441 A.H. 2. The following terms and phrases, wherever mentioned in the Regulations, shall have the meanings ascribed thereto: Competent Authority: The authority responsible for supervising and controlling a profession or issuing the license to practice it. Register: The register of professional companies at the Ministry. Profession: A profession through which a person provides services to others for his/her own account, as a way of professionalism and based on experience, qualification, talent or skill, after obtaining the license. License: A permit to practice a profession- or the like- which is issued by a competent authority. Licensee: A natural person who holds a license to practice one or more professions. Article 2: Name of a professional company Subject to the provisions of Article (14) of the Law, the name of the professional company shall observe the following: a. If it is formed with the name of one or more of the partners or shareholders, they have to be of the licensees. b. Adhere to the provisions of the Trade Names Law in a manner that is not incompatible with the nature of the professional company. c. The name shall be followed by an indication implying the nature of the profession- the subject to activity of the professional company- or an indication of being a professional company and the form thereof. Chapter Two: Procedures whereby a Professional Company is Incorporated Article 3: Incorporation application Incorporation application shall be submitted to the Ministry after fulfilling the requirements stipulated in the Law and Regulations. The incorporation procedures and controls set forth in the Companies Law shall apply to the application depending on the form of the company, except for its registration in the Commercial Register. The application shall be accompanied by the following: a. A copy of the license that is issued to each partner or shareholder licensed to practice the profession, which is the subject of activity of the professional company, or provide an indication for obtaining such license. b. For a non-Saudi professional company, a certified copy of its Memorandum of Association and Articles of Association -as the case may be- and its registration certificate. A certified translation into Arabic shall be provided if the documents are issued in a non-Arabic language. c. An indication of assent by the competent authority shall be provided where necessary. Article 4: Registration application 1. Either of the partners in the professional company, its managers or their representatives may submit an application to the Ministry to register the professional company in the Register within (thirty) days from the date of fulfilling the requirements pursuant to the Law and Regulations as well as the Companies Law – depending on the form of the company. +966 11 294 4444 | Riyadh 11162 @ SaudiMCI Kingdom of Saudi Arabia | المملكه العربيه السعوديه www.mci.gov.sa 1 [Non-Text] وزاره التجاره Ministry of Commerce VISION 30 ال المملكه العربيه السعوديه KINGDOM OF SAUDI ARABIA 2. Either of the shareholders, board members or their representatives may submit an application to the Ministry to register the professional joint stock company in the Register within (thirty) days from the date of issuing a decision by the Ministry to announce the incorporation. Article 5: Registration of a company in the Register Apart from what contained in Article (3) of the Regulations, the registration application of a professional company shall be accompanied by the following: a. A copy of the professional company's Memorandum of Association and Articles of Association -as the case may be. b. Names, addresses, professions, nationalities and contact details of partners or shareholders and managers or members of the board of directors. c. Name, address, and contact details of the competent authority in the home country of the non-Saudi professional company. d. Any documents or information required by virtue of the Law and Regulations or the Companies Law, as well as any documents or information to be required by the Ministry. Article 6: Notifying the Competent Authority of the registration of a professional company A professional company shall notify its registration to the competent authority concerned with the profession – the subject of its activity – within (thirty) days from the date of registration. A copy of its Memorandum of Association and Articles of Association — whatever the case may be— as well as a copy of the registration certificate shall be provided. This applies to any amendment or modification. Article 7: Registration fee The fee for registering a professional company in the Register shall be in accordance with the annex hereto attached. Article 8: Publication and disposal 1. The publication of the professional company's Memorandum of Association and Articles of Association — whatever the case may be— and any amendment that may occur to each of them shall be made pursuant to the provisions provided in the Companies Law depending on the form of the company. 2. Provisions contained in the Companies Law and other pertinent laws shall be observed when conducting any disposal of the shares or stocks of the professional companies. Chapter Three: Conditions and Controls Governing Incorporating Professional Companies and Practicing a Profession Article 9: Conditions and controls governing incorporating a professional single-member limited liability company To establish a professional single-member limited liability company practicing one or more professions, the following conditions shall be met: a. The owner shall be licensed to practice the profession(s)—the subject of activity of the professional company. b. The controls and conditions stipulated in Article (10) and (11) of the Regulations shall be observed when incorporating a professional company practicing more than one profession in a manner consistent with it nature as being a company owned by a single person. Article 10: Conditions to incorporate a professional company to practice more than one profession 1. To establish a professional company to practice more than one profession, the following conditions shall be met: +966 11 294 4444 | Riyadh 11162 Kingdom of Saudi Arabia | المملكه العربيه السعوديه @ SaudiMCI www.mci.gov.sa 2 [Non-Text] وزاره التجاره Ministry of Commerce VISION 2×30 المملكه العربيه السعوديه KINGDOM OF SAUDI ARABIA a. Among the partners or shareholders there must be licensed one/s to practice the professions subject to the professional company's activity. b. The laws and regulations governing a profession do not prohibit practicing it along with other professions. c. The competent authorities do not object practicing a profession along with other professions that the professional company plans to practice. d. Fulfilling the conditions and controls set forth by the competent authorities—each within the limits of its competence—regarding the incorporation of a professional company that practices more than one profession. 2. The Ministry -in coordination with the competent authorities- may issue a list of compatible professions which could be practiced by one professional company. Article 11: Controls for practicing more than one profession by a professional company A professional company which practices more than one profession shall comply with the relevant laws, regulations and standards upon undertaking its work and providing its services, and shall commit to the following controls: a. The professional service shall be provided by a licensee who is permitted to practice the profession—the subject of the service. b. Maintaining independence of every profession – the subject of activity of the professional company–, and separate them in terms of providing works and services, except for the cases where works services are provided by means of involving more than one profession in one subject. c. Maintaining confidentiality and privacy of customers' data, and not to disclose such data inside the professional company except to the extent which is necessary to perform the professional service and realize the customers' interests. d. Every licensee shall perform the professional service within the boundaries and scope of the profession he/she is licensed to practice in accordance with the laws, regulations and standards of the profession without interfering in the works and services of other professions. e. Every licensee shall commit to the laws, regulations and standards of the profession when dealing with cases that are inconsistent with the interests. f. Comply with the controls and conditions set forth by the competent authorities—each within the limits of its competence—with regard to practicing the profession which is relevant to other professions the professional company plans to practice. Article 12: Conditions and controls governing incorporating a professional company in partnership with a non-Saudi professional company 3. Subject to the provisions of the Foreign Investment Law and resolutions in connection, in order to incorporate a professional company between a licensee who is permitted to practice one or more professions and one or more non-Saudi professional companies, the following conditions shall be met: a. The shares of the Saudi licensee shall not be less than (25%) of the capital of the professional company. b. A non- Saudi professional company which plans to have shares or be a partner in the professional company shall have an excellent reputation in the field of the profession. c. A non-Saudi professional company which is a shareholder or partner in a professional company shall have one or more representatives licensed to practice the profession -the subject of activity of the professional company- by the competent authority in the home country of the non-Saudi professional company or in his/her home country, for each and every profession in which it is sharing or partnering in the professional company. +966 11 294 4444 | Riyadh 11162 Kingdom of Saudi Arabia | المملكه العربيه السعوديه @ SaudiMCI www.mci.gov.sa 3 [Non-Text] وزاره التجاره Ministry of Commerce VISION Jj 2×30 ال المملكه العربيه السعوديه KINGDOM OF SAUDI ARABIA d. Obtaining an approval from the competent authority in the Kingdom, when required. e. The non-Saudi professional company shall transfer its expertise and technical know-how to the professional company and train the Saudis therein. Article 13: Controls for participating unlicensed person in a professional company 1. Subject to the provision of paragraph (4) of Article (5) of the Law, a natural person, who is unlicensed to practice a profession, or a legal person, are required to meet the following conditions in order for them to hold shares or to be a partner in the professional company: a. The total shares or stocks of the unlicensed persons shall not exceed (30%) of the capital of the professional company. The Minister may, after coordinating with the competent authority and other pertinent authorities, adjust such percentage with regard to some professions or some forms of the professional companies. b. The unlicensed partner or shareholder shall not have direct or indirect control over the professional company or its management. c. Maintaining confidentiality and privacy of customers' data, and not to disclose such data inside the professional company except to the extent which is necessary to perform the professional service and realize the customers' interests. d. Unlicensed partner or shareholder shall not interfere or have an influence in a way that may infringe the independence of any of the licensed partners or shareholders when practicing the profession. 2. Without prejudice to paragraph (1/a) of this Article, in a limited partnership company, the number of unlicensed limited partners may not exceed the number of the licensed partners. Chapter Four: Management of a Professional Company Article 14: Managing a professional company by more than one person 1. If a professional company is managed by more than one person, half of them shall be at least of the licensed partners, among whom there shall be at least one licensed partner for each profession – within the subject of activity of the professional company. 2. In the professional joint stock company, the number of licensed shareholders shall not be less than half of the board members, among whom there shall be at least one licensee for each profession – within the subject of activity of the professional company. Article 15: Decisions of the management Subject to Article (14) of the Regulations, decisions made by the managers of the professional company or its board of directors—as the case may be—shall be issued in accordance with the percentage required for each decision as specified in the Memorandum of Association of the professional company or its Articles of Association, provided that: a. At least half of the licensed managing partners or shareholders of the board members, must vote in favor of the decision, unless the Memorandum of Association of the professional company or its Articles of Association stipulate a higher percentage. b. If the decision is concerned with the profession practiced by the professional company, at least half of the managing partners or shareholders of the board members who are licensed to practice such profession must vote in favor of the decision, unless the Memorandum of Association of the professional company or its Articles of Association stipulate a higher percentage. Article 16: Ownership of financial and real estate assets A professional company may own financial and real estate assets according to the following conditions: a. The purpose of such ownership is to serve the interests of the professional company. +966 11 294 4444 | Riyadh 11162 Kingdom of Saudi Arabia | المملكه العربيه السعوديه f@SaudiMCI www.mci.gov.sa 4 [Non-Text] وزاره التجاره Ministry of Commerce VISION Jj 2×30 ال المملكه العربيه السعوديه KINGDOM OF SAUDI ARABIA b. Shall not lead the professional company to gross risks that may affect its professional business. c. Shall not be prohibited by any of the laws, regulations and standards of the professions subject of activity of the professional company. d. Shall observe the Real Estate Ownership and Investment by Non-Saudis Law, with maintaining the right of the professional company to own a property to take it as a headquarter in order to practice its activity. Article 17: Converting a professional company to another form Partners or shareholders of a professional company may convert the company to another form of the companies stipulated in Article (3) of the Law, in accordance with the provisions of the Companies Law — except for its registration in the Commercial Register— that is after fulfilling the controls and conditions set forth in the Law and Regulations. Article 18: Dissolving a professional company prior to the expiry of its term 1. A professional company may not be dissolved before the expiry of its term unless an announcement of the same is made; the competent authority and the company's dealers shall be notified at least (90) days prior to the dissolution, as per the following: a. The announcement is made in the media determined by the Ministry. b. Notify the competent authority through the media determined by the competent authority. c. Notify the dealers through the means of communication that are agreed upon, or by any other means to be set by the Ministry. 2. A professional company shall make the necessary arrangements to ensure the completion of the professional works of its customers such as the assignment of such works to other licensed professionals after obtaining the consent from the customers. Chapter Five: Supervising a Professional Company Article 19: Supervision by the competent authority 1. A professional company is subject to the supervision of the competent authority with regard to the affairs of the profession—the subject of its jurisdiction. 2. A professional company shall adhere to the laws, regulations and standards laid down by the competent authority – within its limits of powers. 3. The competent authority is entitled to review and inspect the files, records, and data of the professional company—within the limits of its powers—in order to verify the professional company compliance with the laws, regulations and standards which are relevant to the profession – within the subject of its activity – and the professional company shall commit to provide whatever required. Article 20: Notification of amendments or changes A professional company shall notify the Ministry and the competent authority of any amendment or change may occur in any of the following within (15) days from the amendment/change date: a. The professional licenses of partners or shareholders. b. Information of the shareholders in the professional joint stock company. c. The address of the professional company and means of communication therewith. d. Lacking any of the conditions and requirements set for incorporating a professional company or lacking any of the conditions and requirements which shall be fulfilled by the partners or shareholders. Article 21: Publication The Regulations shall be published in the Official Gazette, and shall come into force concurrently with the Law. +966 11 294 4444 | Riyadh 11162 Kingdom of Saudi Arabia | المملكه العربيه السعوديه @ SaudiMCI www.mci.gov.sa 5 [Non-Text] وزاره التجاره Ministry of Commerce VISION 2*30 المملكه العربيه السعوديه KINGDOM OF SAUDI ARABIA Annex: Financial consideration for registering a professional company in the Register <table><tr><td rowspan="2"></td><td rowspan="2">The form of the company</td><td colspan="2">Professional Register</td></tr><tr><td>main</td><td>secondary</td></tr><tr><td>1</td><td>Joint stock company</td><td>1600 SR</td><td>800 SR</td></tr><tr><td>2</td><td>Limited liability company</td><td>1200 SR</td><td>600 SR</td></tr><tr><td>3</td><td>General Partnership</td><td>800 SR</td><td>400 SR</td></tr><tr><td>4</td><td>Limited partnership</td><td>800 SR</td><td>400 SR</td></tr><tr><td>5</td><td>Modifying the data in the register</td><td colspan="2">100 SR</td></tr><tr><td>6</td><td>Obtaining a data copy</td><td colspan="2">100 SR</td></tr></table> +966 11 294 4444 | Riyadh 11162 Kingdom of Saudi Arabia | المملكه العربيه السعوديه f YouTube SaudiMCI www.mci.gov.sa 6