26 Questions
What is the maximum term of office for board members?
4 years
Under what conditions can a board member be dismissed?
By General Assembly
What action is required if a board member has an interest in a business transaction?
Disclosure of interest
Who can chair Shareholder GA Meetings?
Chairman or Vice Chairman
What percentage of shareholders with voting rights is required for certain capital decisions?
$75%
What type of meetings have different quorum percentages for ordinary and extraordinary meetings?
Shareholder GA Meetings
In an LLC, who has the right to call a General Assembly meeting?
Partners
If the manager's position in an LLC is vacant, who can appoint a new manager?
Partners
In an LLC, who can represent the company in front of the court, arbitration tribunals, and third parties?
Managers
When can non-managing partners submit opinions to partners in an LLC?
Twice a year
In an LLC, who has the right to participate in discussions and voting?
Partners
In an LLC, how often should the General Assembly be held based on the MOA?
At least once a year
If equity shares in an LLC are held by several people, what can the company do?
Suspend their rights until they choose one holder
What determines how profits are distributed to partners in an LLC?
Partners' agreement
Who is liable for the acts of a manager that fall within the company's objectives in an LLC?
The company
What is the minimum required capital for a joint stock company (JSC) according to the text?
500k riyals
What is the minimum required paid-up amount for the capital of a joint stock company (JSC)?
One quarter of the value
Which of the following must be mentioned in the Articles of Association (AOA) of a joint stock company (JSC)?
The authorized and issued capital
In a joint stock company (JSC), under what conditions can the issued capital be increased?
Within the limits of the authorized capital and if it’s paid in full
What is a key requirement for liability in a joint stock company (JSC)?
The liability of the shareholder is limited
What are some mandatory details to be included in the AOA of a joint stock company (JSC)?
The authorized and issued capital
In a Joint Stock Company (JSC), what happens if the company's losses reach half of the issued capital?
The board of directors must announce the losses within 60 days and call for an extraordinary meeting within 180 days to consider the continuation of the company or its termination.
What types of shares are typically issued by a JSC?
Ordinary, Preferred, Redeemable
In a JSC, what is the effect of subscription for shares?
Subscribers agree to the company’s Articles of Association (AOA) and will follow any decisions made by all shareholders, regardless of their attendance or agreement with the decisions.
What is required before a Joint Stock Company (JSC) can lower its capital?
The Board of Directors has to prepare a statement explaining why they’re doing it, what the company’s obligations are, and how the lowering might affect those obligations. This statement has to be read out at the General Assembly Meeting.
What happens if a majority shareholder wants to force minority shareholders to accept an offer from a serious buyer for purchasing all the company’s shares?
The majority shareholder has the right to force the minority to accept an offer from a serious buyer for purchasing all the company’s shares for the same price given to the majority & under the same conditions.
Study Notes
- Board Members: Elected by Ordinary General Assembly (GA), term of office cannot exceed 4 years, can be dismissed by GA, re-election allowed unless specified in AOA, AOA specifies method of forming board and voting.
- Termination of Board Members: GA can terminate membership for repeated absenteeism, notification of interest in business transactions required, failing to disclose interest can result in legal action.
- Disclosure of Interest: Board members must disclose direct or indirect interests in business transactions, cannot vote on resolutions regarding their interest, company can take legal action for breach of contract or unlawful profit.
- Liability: Board members and members with interests can be held liable for damages from business transactions, unless they object explicitly during the meeting.
- Shareholder GA Meetings: Chaired by chairman or vice chairman, shareholders can attend and assign someone to represent them, meetings can be held using technology, quorum requirements.
- Extraordinary GA Meetings: Powers to amend AOA with exceptions, procedures for calling meetings and setting quorum.
- Quorum and Decisions: Different quorum percentages for ordinary and extraordinary meetings, decisions passed by majority and two-thirds votes respectively.
- Capital Decisions: Validity and registration requirements for capital decisions, 75% of shareholders with voting rights required for certain decisions.
- Meeting Minutes: Content and purpose of meeting minutes, including attendance, share ownership, votes, decisions, and a brief summary of discussions.
Test your knowledge of corporate law with this quiz that covers the procedures for documenting meeting minutes and requesting company inspections. Learn about the responsibilities of board members, auditors, shareholders, and the role of the court in overseeing corporate conduct.
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