MCI has issued a number of Circulars to Improve the Indicators of Protecting the Minority Shareholders` Right and to enhance the Competitive Environment in the Kingdom

26 Apr 2016
Proceeding from the keenness of the Ministry of Commerce and Industry to improve the competitive indicators, and for the application of corporate governance principles, and for adopting the best practices to raise the level of transparency and disclosure of companies operating in the Kingdom, MCI has issued a number of circulars in accordance with the current corporate law, for the protection of the minority shareholders' rights, and to raise the level of the competitive investment environment.

1. Issuing the Circular No. 24230 dated 17.07.1437 AH to all joint stock companies, subject of disclosure to be effected by all Board of Directors members about their personal interests and business related to the work and contracts of the company, and they should not be engaged in any activity that would compete with the company or do business in one of its branches, only after obtaining a license from the company`s General Assembly.

2. Issuing the Circular No. 24233, dated 17.07.1437 AH to all joint-stock companies, subject of studying and reviewing the approved controls and conditions during the formation of the boards of directors of joint- stock companies, and the recommendation of forming such boards to include people who meet the conditions of experience, competence and honesty.

3. Issuing the Circular No. 24231 dated 17.07.1437 AH to all limited liability companies, subject of distributing the profits among the partners.

4. Issuing the Circular No. 24232, dated 17.07.1437 AH to all limited liability companies, subject of  inviting the partners to attend the assembly meeting, and the invitation to be handed over to the partners before at least (30) days of the meeting.

It is worth mentioning that the application of the new corporate law will come into force next Monday, 25.07.1437 AH, corresponding to 02.05.2016 AD, the preparation of the implementing regulations, including all the circulars, to be followed. This would contribute in boosting the competitive environment in the Kingdom.

Last Modified 26 Dec 2018