Company Types and Regulations Quiz

All of the above

All of the above

No minimum capital is required

Board of Directors

All of the above

All of the above

2 years

Lock-in period of 2 years

Share buy back permitted

Increase market diversity by introducing new company types

To enhance the sustainability of companies

To establish companies under a new regulatory framework

Boost entrepreneurship

Investment in small and medium enterprises

Having a personal interest in the decision

Forcing the owners of the remaining 10% of shares to sell their shares to a buyer who agrees to purchase the entire issued share capital

Requirement to have auditors for foreign micro and small companies

Requiring compliance with Royal Decree No. M15/1420 approved by the Trade Names Law

Article 113

Sukuks

Lock-in period = Founders cannot transfer their shares before the publication of financial statements for 2 full years Arbitration = Not allowed on any matter of disputes among shareholders Conversion of shares = Not possible from one class to another class Share buy back = Not permitted

Lock-in period = No such restriction for founders to transfer shares Arbitration = Allowed to be agreed on any matter of disputes among shareholders Conversion of shares = Possible from one class to another class Share buy back = Permitted

Founders = Individuals who have shares in a Joint Stock Company Financial statements = Publication of which is required before founders can transfer their shares under the old law Arbitration = Allowed to be agreed on any matter of disputes among shareholders under the new law Share buy back = Permitted under the new law

Lock-in period = Time period during which founders cannot transfer their shares Company founders = Individuals who have shares in a Joint Stock Company Financial statements = Publication of which is required before founders can transfer their shares Arbitration = Not allowed on any matter of disputes among shareholders

Lock-in period = No such restriction for founders to transfer shares Company founders = Individuals who have shares in a Joint Stock Company Arbitration = Allowed to be agreed on any matter of disputes among shareholders Share buy back = Permitted

Lock-in period = Removed for founders to transfer shares Arbitration = Allowed on any matter of disputes among shareholders Conversion of shares = Possible from one class to another class Share buy back = Now permitted

Lock-in period = Founders cannot transfer their shares before the publication of financial statements for 2 full years Arbitration = Not allowed to be agreed on any matter of disputes among shareholders Conversion of shares = Not possible from one class to another class Share buy back = Not permitted

Lock-in period = No such restriction for founders to transfer shares Arbitration = Allowed to be agreed on any matter of disputes among shareholders Conversion of shares = Possible from one class to another class Share buy back = Permitted

Lock-in period = Time period during which founders cannot transfer their shares Company founders = Individuals who have shares in a Joint Stock Company Financial statements = Publication of which is required before founders can transfer their shares Arbitration = Not allowed to be agreed on any matter of disputes among shareholders

Lock-in period = No such restriction for founders to transfer shares Company founders = Individuals who have shares in a Joint Stock Company Arbitration = Allowed to be agreed on any matter of disputes among shareholders Share buy back = Permitted

Joint Liability Company = No longer recognized as a category of companies Simple Joint Stock Company = A new form of company that can be established by one or more persons Limited Liability Company = Can issue several classes of shares Partnership Company = Regulated and introduced under the new law

Article 11 = Allows the binding of joint venture agreements and family charter in the company’s articles of association No minimum capital = Required to incorporate a Simplified Joint Stock Company Widest powers in the management = Given to the chairman and board of directors of a Simplified Joint Stock Company Investment in businesses = One of the purposes of the new law

Non-profit professional companies = Introduced and regulated by the new law Simplified Joint Stock Company = Can serve as an investment arm for non-profit companies Joint Stock Company = Can be incorporated by investors under the new law Limited Partnership Company = One of the types of companies that investors can incorporate

Flexible corporate entity = A characteristic of a Simple Joint Stock Company Tradable shares = Can be issued by a Simplified Joint Stock Company Family owned businesses = Can be regulated through joint venture agreements and family charter in the company’s articles of association $90%$ or more of the total voting shares = Allows shareholders to force the owners of the remaining $10%$ to sell their shares

Simple Joint Stock Company = A new form of company that can be established by one or more persons, managed by one or more managers or board of directors and issue several classes of shares Joint Liability Company = A type of company that is no longer recognized under the new law Limited Liability Company = A type of company that can issue several classes of shares and has a management structure similar to a Simplified Joint Stock Company Partnership Company = A type of company that is regulated and introduced under the new law

Simplified Joint Stock Company = A flexible corporate entity that can be established by one or more persons Non-profit companies = Can enter the private sector and generate returns through a Simplified Joint Stock Company Investors = Can incorporate various types of companies under the new law Joint Stock Company = A type of company that can be incorporated under the new law

Article 11 = Allows the binding of joint venture agreements and family charter in the company’s articles of association No minimum capital = Required to incorporate a Simplified Joint Stock Company Widest powers in the management = Given to the chairman and board of directors of a Simplified Joint Stock Company Investment in businesses = One of the purposes of the new law

Joint Liability Company = No longer recognized as a category of companies Simple Joint Stock Company = A new form of company that can be established by one or more persons Limited Liability Company = Can issue several classes of shares Partnership Company = Regulated and introduced under the new law

Non-profit professional companies = Introduced and regulated by the new law Simplified Joint Stock Company = Can serve as an investment arm for non-profit companies Joint Stock Company = Can be incorporated by investors under the new law Limited Partnership Company = One of the types of companies that investors can incorporate

Flexible corporate entity = A characteristic of a Simple Joint Stock Company Tradable shares = Can be issued by a Simplified Joint Stock Company Family owned businesses = Can be regulated through joint venture agreements and family charter in the company’s articles of association $90%$ or more of the total voting shares = Allows shareholders to force the owners of the remaining $10%$ to sell their shares

Squeeze-out Right of Shareholders = Shareholders having 90% or more of the total voting shares can force the owners of the remaining 10% to sell their shares Interim Dividends Distribution = Shareholders can agree on whatever percentages that suit them for the distribution of dividends Company Names = The New Law provides a wider choice of company name, which may be in languages other than Arabic General Managers and Board Directors’ Fiduciary Duties = The general manager or board director will not be responsible for the adverse effects of a decision, under certain conditions

Increased Flexibility for Small and Micro Companies = These companies are exempted from audit requirements and have eased statutory requirements and incorporation procedures Distribution of Dividends = The law allows the distribution of interim and annual dividends to the partners and shareholders Automation of Processes = The law facilitates automation of processes by enabling attendance at general assembly meetings through electronic means, facilitating virtual voting using technology tools and automating establishment requests Introduction of more developed and elaborate re-structuring and merger provisions = Chapter 10 of the New Law makes rules for the merger, restructuring, and division of companies

Appointment of a certified auditor = Micro and small companies are exempt from this requirement, but foreign micro and small companies will be required to have auditors Different Classes of Shares = The law allows the issuance of different classes of shares with different rights, privileges or restrictions to employees Liquidation Procedures = The law simplifies the liquidation procedures in line with the KSA Bankruptcy Law Company Incorporation = Several restrictions on the company’s incorporation, business conduct, company name, and exit from the market have been removed

Foreign micro and small companies = These companies will be required to have auditors, unlike their local counterparts Share Division or Split = The law allows shares to be divided or split into shares of lower nominal value, or merging them to result in shares with a higher nominal value Transfer of Assets = Sole proprietorship owners are allowed to transfer their assets to any form of company Choice of Company Names = The New Law provides a wider choice of company name to those who want a specific name in the business market

Incentivization of talent within companies = Under Article 72 (2) (b) of Saudi New Companies Law, shareholders do not have pre-emption rights when a company issues shares that are allocated to employees Shareholders' Rights = Article 113 authorizes the shareholders having 90% or more of the total voting shares to force the owners of the remaining 10% to sell their shares General Managers and Board Directors' Responsibility = Under the New Law, they will not be responsible for the adverse effects of a decision, under certain conditions Limited Liability Companies Financing Policy = The New Law allows Limited Liability Companies (LLCs) to issue Sukuks, negotiable debt instruments or financing instruments under the KSA Capital Market Law

Exemption from Audit Requirements = Article 19 exempts the appointment of a certified auditor to micro and small companies to encourage and speed up start-ups into the Saudi business market Company Dissolution = The New Law provides more clarity and transparency on the rights and obligations of shareholders on the merger, conversion, or dissolution of a company Virtual Voting = The law facilitates virtual voting using technology tools Company Formation = The law offers increased flexibility to small and micro companies by easing their statutory requirements, incorporation procedures and offering extra flexibility in forming and setting out the company’s articles of association or bylaws

Automation of Processes = The law enables attendance at general assembly meetings through electronic means and automates establishment requests Encouragement of Employee Share Ownership = The law allows the issuance of shares to employees, without pre-emption rights for other shareholders Distribution of Dividends = The rule under the New Companies Law allows shareholders to agree on whatever percentages that suit them for the distribution of dividends Squeeze-out Right of Shareholders = The law authorizes the majority shareholders to force the minority shareholders to sell their shares

Company Names = The New Law provides a wider choice of company name to those who want a specific name in the business market, which may be in languages other than Arabic Exemption from Audit Requirements = The law exempts micro and small companies from the appointment of a certified auditor Share Division or Split = The law allows shares to be divided or split into shares of lower nominal value, or merging them to result in shares with a higher nominal value Incentivization of talent within companies = The law allows the issuance of different classes of shares with different rights, privileges or restrictions to employees

Encouragement of Employee Share Ownership = The law allows the issuance of shares to employees, without pre-emption rights for other shareholders Automation of Processes = The law enables attendance at general assembly meetings through electronic means and automates establishment requests Company Dissolution = The New Law provides more clarity and transparency on the rights and obligations of shareholders on the merger, conversion, or dissolution of a company Limited Liability Companies Financing Policy = The New Law allows Limited Liability Companies (LLCs) to issue Sukuks, negotiable debt instruments or financing instruments under the KSA Capital Market Law