As a firm we have a strong commitment to our corporate sustainability principles, and this year we joined the United Nations Global Compact, an initiative dedicated to promoting responsible business practices and advancing the United Nations Sustainable Development Goals (SDGs). Our goals include Education, gender equality, climate action, justice for all, and sustainable partnerships. You can learn about our actions plans and targets, here.
In this edition, we feature an entire section dedicated to COP28 where we share insights and intelligence through conversations we have had with leading experts from across the region. This includes articles and podcasts that delve into the most pertinent topics, such as COP28’s call to action for corporates, ESG reporting, and the UAE’s Net Zero vision.
Beyond the focus on Energy and Climate we feature articles covering important updates that look into a variety of areas, such as UAE consumer protection law, an overview of the Federal Civil Family Law for Non-Muslim Foreigners in the UAE, and from Kuwait we discuss the management of companies. As always, in our final section we continue to share with you real life judgements that provide context to the legal landscape in the region.Read the full edition
On Tuesday 28th June 2022, the Council of Ministers has approved the long-awaited new Companies’ Law (“New Law”). The New Law was enacted by Cabinet Resolution No. 678, dated 29/11/1443H (corresponding to 28th June 2022) and ratified by Royal Decree No. (M/132), dated 01/12/1443H (corresponding to 30th June 2022), and consists of (281) articles. The New Law, which is in line with the Kingdom’s 2030 Vision, introduces new changes, allows greater flexibility, safeguards businesses’ interests, empowers the private sector and follows the best international practices.
The Companies Law of 1437H (2015) and the Professional Companies Law of 1441H (2019) will be repealed, and any other provisions (in any other law in force) which are in conflict with the New Law will be overridden by the New Law, once it comes into effect, (180) days following its publication in the Official Gazette.
The New Law regulates commercial companies, non-profit companies and professional companies, and it enables investors to incorporate any of the following types of companies: (1) Joint Liability Company (2) Limited Partnership Company (3) Joint Stock Company (4) Simple Joint Stock Company and (5) Limited Liability Company.
The New Law has, specifically, introduced a new form of company – the “Simple Joint Stock Company” (“SJSC”). The SJSC will be able to accommodate the entrepreneurship and venture capital rising demands. It is a flexible corporate entity, which can be established by one or more persons, issue several classes of shares, can be managed by one or more managers, or board of directors. It may also act as a vehicle for investments and enable non-profit companies to enter the private sector.
In addition, article 11 of the New Law allows for the introduction of binding (provided it does not conflict with the law, articles or the bylaws) joint venture agreements and family charter in the company’s articles of association to regulate family owned businesses, their governance and administration policy, the employment of family members and the family business’ profits.
The SJSC will be able to accommodate the entrepreneurship and venture capital rising demands. It is a flexible corporate entity, which can be established by one or more persons, issue several classes of shares, can be managed by one or more managers, or board of directors.
In summary, the New Law increases business sustainability, encourages investments in small and micro companies, simplifies procedures and regulatory requirements, increases market diversity by introducing new company types, protects shareholders and reduces potential disputes.
Please contact our Saudi based corporate team for any queries and we would be delighted to assist.