LEGAL FRAMEWORK OF THE SIMPLIFIED JOINT-STOCK COMPANY (SJSC) UNDER SAUDI COMPANIES LAW
DOI:
https://doi.org/10.18623/rvd.v22.n3.3531Keywords:
Simplified Joint-Stock Company, Saudi Companies Law, Share Trading, Articles Of Association, Foreign Direct InvestmentAbstract
This Paper focuses on the Simplified Joint-Stock Company, considering it one of the modern legal forms entered under the Saudi Companies Law of 2022. SJSC was founded to meet the expectations of facilitating an investment environment and to provide a flexible model that addresses the requirements of entrepreneurs and startup companies. This form of company is featured by significant flexibility in establishing procedures, as it can be established by a single shareholder, without the need for a minimum capital, and the articles of association are only sufficient to regulate its internal governance. This type of company allows shareholders several administrative authorities, without being obliged by the traditional structures of joint-stock companies. The Saudi Companies Law of 2022 allows founders to decide on the types of management and decision-making, enhancing effective participation and supporting the company's independence from procedural complications. Despite the company's flexibility, the law allows for restrictions on transferring shares to protect the company's stability and to prevent the admission of new partners without the consent of the existing shareholders. This is achieved by requiring prior consent for any transfer or granting preemptive rights to the existing shareholders. Besides, the Simplified Joint-Stock Company within the Saudi regulatory framework, combining the facilitation of incorporation, managerial flexibility, and the protection of shareholders' interests, makes it an effective tool for promoting investment and advancing the national economy.
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