The Kingdom of Saudi Arabia seeks to strengthen the economic performance of the commercial sector, through evidence supporting the movement of internal trade for commercial establishments and organizing a database for all commercial activities. Those who practices a commercial activity, whether a company, a sole proprietorship, a merchant or any other legal form, are obligated to register the database of his commercial activities in the Saudi Commercial Registry, pursuant to the Commercial Register Law promulgated by the Royal Decree No. (R/1) dated 21/02/1416 AH, and the executive regulations under Ministerial Resolution No. 1003 dated 21/09/1416 AH, which we shall discuss herein.
It is a central electronic database in which the names and data of those subject to the provisions of the Commercial Register Law are recorded. The Commercial Registration Offices aim to organize registration procedures and facilitate business for commercial establishments, by making the data available for search and review. Every merchant must apply to register his name in the commercial register where his shop is located, weather it is headquarter, a branch or an agency.
A Commercial Registration Office is designated in the cities specified by a Ministerial Resolution covering all the provinces of the Kingdom, in which the names of the merchants and companies with its own numbering and codes, and each establishment shall have a distinctive symbol according to its legal form.
The process of registering a commercial establishment in the commercial register and annotating the amendment to it is carried out through several steps, including:
An application for registering a branch of a company shall be submitted within thirty days from the date of its establishment. A copy of the company’s Memorandum and Articles of Association, if any, shall be attached to the application.
The merchant, the manager of the company or the liquidator shall apply to make an entry on the Commercial Register for any amendment relating to the data already registered, within thirty days of the date of amendment.
Registration applications, as well as applications for amendment and for the cancellation of registration, shall be drawn up on the forms prepared for the relevant purpose. Each application shall be accompanied by supporting documents, written in clear handwriting, and submitted by the authorized persons, or their delegates who act on their behalf under official special or general power of attorney, expressly stating the power of the agent to submit any of the aforementioned applications pursuant to the Law. The original power of attorney or a copy thereof shall be kept along with the original application at Commercial Register Office.
Every one registered in the Commercial Register shall commit to the following:
The following data shall be registered in the commercial register:
Data provided in the Commercial Register is considered evidence for or against the commercial establishment as of the date on which it was registered. No data obligatorily registered or entered shall be used against third parties, unless such an action is taken. However, the concerned third parties may use this data against the merchant or the company if required.
The Saudi Commercial Registry is a fundamental pillar for regulating business activities within KSA. These controls follow precise guidelines for registering commercial establishments and updating their data, which facilitates business operations and ensures compliance with applicable laws and regulations.
Article (4) of the Executive Regulations issued pursuant to Ministerial Resolution No. 1003 dated 21-9-1416 AH stipulates that:
Foreign companies licensed to open a branch or office in KSA are obligated to submit an application to register the branch or office in the commercial register within 30 days from the date of opening the branch, and the application for registration for the branch or office shall be accompanied by a copy of the decision to license the opening of the branch or office and a copy of the documents supporting the establishment of the company certified by the competent authorities accompanied by an approved Arabic translation. The application for registration shall include comprehensive data about the branch and office, including particularly the following:
Every merchant, their heir or the liquidator must delete the registration in the commercial register in the following cases:
The application must be submitted within 90 days from the date of the incident that requires the cancellation of the registration. If the concerned parties do not submit the cancellation request, the Commercial Registry Office, after verifying the incident and notifying the concerned parties by registered letter, will cancel the registration after 30 days from the date of notification, unless the Office receives from the concerned party during that period a proof that denies this incident. In the event that a final judgment or order is issued to cancel the registration in accordance with the applicable regulations, the competent Commercial Registry Office shall cancel the registration as soon as it is notified of the judgment or order.
The competent Commercial Register Office shall issue a certificate for the cancellation of the registration in one original and one copy based on the form prepared for this purpose, provided that the certificate shall indicate the date of and reason for the cancellation. The original certificate shall be handed to the person concerned and the copy shall be kept in the Commercial Register Office.
the Royal Decree No. (R/1) dated 21/02/1416 AH, and the executive regulations under Ministerial Resolution No. 1003 dated 21/09/1416 AH stipulate that:
The judicial authorities, which issue the following judgments and orders shall inform the competent Commercial Register Office thereof, within thirty days of the date on which the judgment or order becomes final:
At the end of this article on the controls for registration in the Saudi Commercial Registry, it is clear that these controls constitute a fundamental basis for regulating commercial activities in the Kingdom, and ensure compliance with the rules and regulations.
For more information or for a specialized legal consultation, kindly contact Al-Saadani & Khalifa, an international law firm specialized in Commercial Law.