MCI would like to get the Public Opinions about the Proposal for Strengthening the Partners Rights at the Limited Liability Companies

22 Feb 2018
In order to improve the competitiveness of the investment environment in the Kingdom and to promote the rights of partners in the limited liability companies, and in accordance with the principle of transparency and decision-making, the Ministry would like to explore the views and opinions of those concerned and the public about the proposal that stipulate the following:

First: The partner at the limited liability company shall be entitled to his profit share in accordance with the partners’ decision issued in this regard. The company should distribute the profits within thirty days from the date of the partners' approval.

Second: The partner at the limited liability company, if he wishes to waive his share (with or without compensation) to a third party outside the company, he should inform the other partners through the manager of the company about the name of the transferee or the buyer and the terms of the assignment or sale. Therefore, the manager should inform the rest of partners immediately. Each partner may request the return of the share within thirty days of being notified of the price agreed upon unless the Company's Memorandum of Association provides for another evaluation method or a longer period. If the right of returning the share is used by more than one partner, then this share to be divided among them according to each partner’s proportion in the capital. If the deadline, referred to in this paragraph, is expired and no one of the partners used his right to return the share, then the owner of the quota has the right to assign it to a third party.

Third: The limited liability Company has no right to join a new partner, with new shares, without the consent of all existing partners.

Fourth: The manager of the Limited Liability Company, or its directors or board of directors, should obtain the consent of the partners before taking a decision to sell more than 50% of the company's assets, whether the sale is through one or several transactions. Meanwhile, the transaction that exceeds 50% of the assets will be considered the one that requires the approval of the partners. This proportion is calculated from the date of the first transaction effected during the past 12 months.

Fifth: The partners of the limited liability company should stipulate in the Company's Memorandum of Association the means for settling up the disputes that may arise among the partners and lead to the disruption and cease of the company's work.

MCI would like to invite those interested and the public to participate and express their views and opinions on the aforementioned proposal through the e-mail, not later than Thursday, 27.06.1439 H corresponding to 15.03.2018 AD.

Last Modified 26 Dec 2018