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02 June 2023

14 Thul-Qi'dah 1444

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Law No. 5 of 2002, promulgating the Law of Commercial Companies

Law Summary Record Type: LawNumber: 5Date: 25/05/2002 Corresponding to 14/03/1423 HijriNumber of Articles: 348Status: In force

Official Gazette :Issue: 7Offcial Journal Issue Publication Date: 03/08/2002 Corresponding to 25/05/1423 HijriPage from: 17

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Division of Company

278 Article

It is permitted to divide a company into two or more companies with the dissolution or maintaining of a company that was subject to division. In this event, the procedures and arrangements of amalgamation shall be adhered to for evaluation of the capital. Each company resulting from such a division shall have an independent legal personality and bear the effects thereof.

A decision issued to effect such division shall specify the number of shareholders or partners, their names, the shares held by each of them in the companies incorporated as a result of this division, the rights and obligations of these companies and the method of distributing assets and deductions.

279 Article

Companies resulting from the division may take any legal form of companies taking into consideration the fulfilment of procedures of these forms according to the relevant legal provisions.

280 Article

The division shall take place under a decision by extraordinary meeting of the general assembly of the company or partners, as the case may be, by majority vote representing three quarters of the capital.

The companies resulting from such a division shall become legal successors to the divided companies to replace them legally within the limit of liability transferred pursuant to this division in accordance with the decision of division and without prejudice to the rights of the creditors.

281 Article

Shares of the companies resulting from the division shall be negotiated as soon as they are issued, if the shares of the company subject to division were negotiable at the time the decision of division was issued.

282 Article

Acquisition of a company shall take the form of direct or indirect ownership for part of the capital of another company or by obtaining a majority of voting rights through the purchase of all shares or part thereof or through a public offer for exchange or pursuant to an agreement with partners or shareholders without prejudice to the interests and objectives of the company or through any method provided for in the provisions of this Law. The acquisition shall not result in the abrogation of the legal personality of the company that was acquired or contravention of its rights and obligations.

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