Saudi Arabia Companies Law
Introduction
On the 26th of Jumada al-Thani, 1444H (corresponding to 19 January 2023), Saudi Arabia Royal Decree No. M132/1433 on the Companies Law (Saudi Arabia Cabinet Decision No. 678/1443 On the Approval of the Companies Law) came into effect following the conclusion of the 180-day publication period, followed by Saudi Arabia Ministerial Decision No. 284/1444 On the Promulgation of the Implementing Regulations of Companies Law on the 6th of Jumada al-Thani, 1444H (corresponding to 16 January 2023).
An outline of the key amendments to Saudi Arabia Royal Decree No. M132/1443 (Saudi Arabia Cabinet Decision No. 678/1443) will be discussed in this Legislative Insight.
Changes applicable to all companies
Directors’ duties and rights
Article 26 of Saudi Arabia Royal Decree No. M132/1443 (article 26 of Saudi Arabia Cabinet Decision No. 678/1443) addresses the duty of care and loyalty on all directors and managers of companies.
It outlines specific responsibilities for directors to uphold their standard of care and loyalty. This includes prioritising the company’s best interests, exercising independence in the adoption of voting on boarding resolutions, fulfilling their duties with the requisite care, attention, diligence and avoiding conflicts of interest.