A few days ago, the first cooperative association for lawyers was established in Saudi Arabia. This historic move will definitely contribute to the empowerment of lawyers in the Kingdom. In today’s article, we take a look at the country’s cooperative association law.

Each association is established, in accordance with the provisions of cooperative association law, by individuals with the aim of improving the economic and social situation of its members, whether they are involved in the areas of production, consumption, marketing or services. The name of the association must include a statement of its cooperative character and the type of work its members are involved in.

An association usually consists of at least 12 individuals and each member may own a number of shares in it, provided that no single member owns more than 10 percent of the capital of the association over the duration of his or her participation. In exceptional circumstances, approved by the minister of human resources and social development, an association can be established by as few as five members, in which case no member can own more than 20 percent of its capital.

Each association has a board of directors that does all the necessary work to manage it, based on its purposes and regulations. The board consists of at least five members who are elected by a general assembly of association members. With the exception of the founders, including the first board of directors, who are appointed for a period of three years, the term of the board is four years and this can be renewed by the general assembly.

The existing board continues to exercise its functions and powers until a new board is appointed. Board members are not paid for their work but the general assembly can award them a bonus payment of no more than 10 percent of annual profits after regular deductions.

If a seat on the board becomes empty for any reason, the board can fill it from a reserve list based on who received the next-highest number of votes in the most recent general assembly vote.

Parts of the association’s profits can be distributed as follows: At least 20 percent will be used to fund a regular reserve for the association; an amount not exceeding 20 percent of the remainder of the profits can be spent; and a maximum of 10 percent of the remainder can be used for social services.

• Dimah Talal Alsharif is a Saudi lawyer and legal consultant. Twitter: @dimah_alsharif