Amid the current economic developments in Saudi Arabia, there has been a need to simplify the procedures for establishing companies to encourage investment and support the private sector. A partnership company is one of the preferred forms for investors who wish to establish joint ventures based on trust and mutual cooperation, as it offers a flexible and less complex mechanism compared to other types of companies.
Steps to Establish a Partnership Company
Establishing a partnership company in Saudi Arabia requires several organized steps that ensure transparency and efficiency. Here are the main steps that should be followed:
Accessing the Saudi Business Center Platform
The first step in establishing the company begins by visiting the electronic platform of the Saudi Business Center, where the ministry offers a range of electronic services that facilitate the establishment process.
Choosing the Service to Establish a Partnership Company
Through the platform, you can choose the service to establish a partnership company. This service is designed to guide users step-by-step through the process.
Determining the Number of Partners and the Nature of the Company
It is necessary to determine the number of partners who will participate in the company and the nature of the company. This information is essential to define the organizational and legal structure of the company.
Submitting the Application with All Required Data
Finally, investors submit the application accompanied by all required data such as details of the partners, business activity, and other necessary information. It is important to ensure the accuracy and validity of all information provided to avoid delays or problems in approvals.
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Partnership Company Establishment Contract
Basic Data of the Contract
The partnership company establishment contract must contain several basic elements that include specific and necessary information for the legality of the contract. These elements ensure transparency and clarity for all concerned parties. The main elements include:
- Names and personal data of the partners: This includes the full name, nationality, address, and other necessary data.
- Name of the company and type of activity: Specifies the trade name of the company and the type of business it will conduct.
- Main office of the company: Specifies the geographical location of the company.
- Capital: Details how the capital is divided among the partners and the share of each partner.
- Distribution of profits and losses: How profits and losses are distributed among the partners according to their share contributions.
- Duration of the company: The specified time period for the company’s existence, if determined.
Responsibilities and Solidarity Obligations of the Partners
Partners in a partnership company bear joint responsibility for the company’s debts and obligations, which means that each partner is responsible for the entire debts, not just their share. Responsibilities and obligations include:
- Personal Responsibility: Each partner bears personal and direct responsibility for the company’s obligations.
- Compliance with Corporate Laws: Compliance with all local laws and regulations related to company operations.
- Business Activity: A partner is not allowed to engage in any business activity that competes with the company without the approval of the other partners.
- Financial Transparency: Commitment to providing all accurate and transparent financial information to partners.
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Fees for Establishing a Partnership Company
Detailing Governmental and Additional Fees
When establishing a partnership company in Saudi Arabia, there are a set of governmental and additional fees that must be paid to successfully complete all legal procedures. These fees include:
- Company registration fees: The cost of registering the company in the commercial register.
- Publication fees: This covers the cost of publishing the company details in the official gazette, which is a mandatory procedure.
- Added tax: The government imposes a tax on the services provided.
| Fees | Details |
|---|---|
| Registration Fees | Depends on the type of activity and size of the company |
| Publication Fees | Fixed for all companies |
| Added Tax | A percentage of the total fees |
Terms and Conditions of Payment
To ensure transparency and compliance with local laws, there are a set of terms and conditions that investors must adhere to when paying the fees for establishing a company:
- Payment Methods: Payments can be made through various methods such as electronic payment or through local banks.
- Payment Timing: All fees must be paid before starting the actual registration process.
- Refund Policy: In the case of rejection or cancellation, some fees can be refunded according to specified laws.