Saudi CMA reveals new rules for loss-making firms

13/04/2016 Argaam

Saudi Arabia’s Capital Market Authority (CMA) has announced regulatory amendments that will soon be enforced on Tadawul-listed companies that have accumulated losses exceeding 50 percent of their capital.

 

Under the rules, set to come into effect on May 2, loss-making companies are required to immediately notify the chairman and the board of directors if losses reach such a level.

 

The board must then call for an extraordinary general assembly meeting within 15 days of being notified about losses. The assembly should be held no later than 45 days, and shareholders must then decide to increase the company’s capital, reduce it, or liquidate before the date defined in the articles of incorporation.

 

However, firms may be dissolved if the company’s extraordinary general assembly does not hold its meeting during the defined period of time. The firm could also be dissolved if shareholders fail to reach a decision, or if the capital increase is not fully subscribed within 90 days of the meeting date.

Comments {{getCommentCount()}}

Be the first to comment

loader Train
Sorry: the validity period has ended to comment on this news
Opinions expressed in the comments section do not reflect the views of Argaam. Abusive comments of any kind will be removed. Political or religious commentary will not be tolerated.