The Economic and Energy Affairs Committee of the Shoura Council presented its recommendations for deliberations at the meeting.
Last week, the council members were divided on the issue of requiring by law that bonuses be paid to board members of private companies. The article was removed to allow additional time for debate on the issue. All other articles of the draft bill were approved unanimously.
“This particular article that was not approved will be taken up by the council at a later date giving its members enough time to analyze the pros and cons of the said article,” said Shoura Council Secretary-General Muhammad Al-Ghamdi.
The new law, once approved by royal decree, replaces existing law on company ordinance that was introduced in 1965. The new law is aimed at updating company regulations to better serve the modern business environment. The body of law covers limited liability companies, partnerships and joint stock companies. Among other things the law establishes new rules for the voting procedures of shareholders in joint-stock companies.
“Even shareholders who have fewer shares (than others) will get an opportunity to get elected to the boards (under the new regulations),” Al-Ghamdi pointed out.
The law states a limited liability company shall be made a joint-stock company if the number of partners exceeds 50. Furthermore, the new rule stipulates that a partner of a limited-liability company cannot be a partner in another limited-liability company.
