MCI Reconfirms the Application of Legal Penalties against any Violator in Accordance with the Companies Law
Only five days left for companies and establishments to submit their financial statements in “qawaem” website, while 75% has been achieved till now, as confirmed by MCI, stressing that it will not hesitate in the application of the legal penalties on the parties not complying with "qawaem" requirements before the deadline 19/1/1437 AH, corresponding to 01/11/2015 AD.
MCI has pointed out that the penalties against violators may include ceasing the Commercial Registrations and the services provided by the Ministry of Labor, besides the penalties and fines contained in the companies law, that may reach up to one year imprisonment and a fine for not submitting the financial statements in “qawaem” program within the specified period.
It is worth mentioning that Article 229 of the Companies Law provides for imposing a penalty of imprisonment for not less than three months and not exceeding one year, and a fine of not less than five thousand Saudi riyals and not exceeding SR twenty thousand, or either of them, against every official in a company that does not comply with the instructions and decrees issued by the Ministry, without a reasonable cause, in respect of the obligations and commitments of the company to give chance to MCI delegates and teams to review the documents and records or in providing the necessary data and information needed by the Ministry.
"qawaem" program is considered one of the Ministry`s initiatives that aims to replace the paper financial statements with electronic ones, and to be submitted automatically in “qawaem” website. This procedure would support the credibility and transparency of the financial statements with the beneficiaries, in addition to the speed in providing the relevant authorities with the required information with high accuracy, and provide a financial and economic data base that supports the national one, as well as linking the financial statements of the companies and establishments with "ISIC" International Standard Industry Classification, adopted by the United Nations, which will enable the financial analysis of economic sectors and activities of various kinds, and for studying and monitoring their performance indicators, also the distribution of investments according to trade activities.