Brief on the Commercial Register Law

To enhance clients’ legal awareness, AT Lawyers & Consultants tracks and studies new laws and regulations issued by relevant authorities linked to our clients’ business, providing copies to ensure they operate with the highest legal compliance and avoid future legal issues.

Accordingly, we inform you:

• The new Commercial Register Law 1446H has been issued with modern provisions aligned with Saudi Arabia’s economic changes consistent with Vision 2030.
• It was published in the Official Gazette on 1-4-1446H (4-10-2024) and becomes effective after 180 days from publication, i.e., 28-9-1446H (28-3-2025).
• It repealed the former Commercial Register Law issued by Royal Decree No. (M/1) dated 21-2-1416H.
• The preamble grants those registered a five-year grace period from 28-9-1446H (28-3-2025) to 28-9-1451H (1-2-2030) to rectify the status of branch registers. After that, all branch registers will be struck off per a mechanism set by the Ministry of Commerce.
• The Minister of Commerce shall issue the executive regulations within 180 days from publication, to be effective on the same date as the law.

For companies:

• Convert the branch register by incorporating a new company.
• Or strike off the branch commercial register.

For establishments:

• Transfer the register to another owner by sale or other means.
• Or convert the register by incorporating a new company.
• Or strike off the branch commercial register.

The new Commercial Register Law introduced concepts not present in the former law, including:

• Exempting certain trader categories from registration based on criteria to be set in the regulations.
• Allowing a trader to register different, non-homogeneous activities under one commercial register.
• Abolishing branch commercial registers and sufficing with a single register per trader.
• Abolishing a fixed expiry term for the register.
• Introducing annual confirmation of registered trader data.

The new law also reduces the deadline to update register data to 15 days instead of 30 days under the former law.

Additional concept:

• It introduced suspension of registration if the annual confirmation is not submitted within 90 days of its due date.
• The trader is warned 14 days before suspension.
• Suspension leads to suspension of all licenses issued on the basis of the suspended register.
• Suspension lasts one year and is lifted only after paying the fine and submitting the annual confirmation.

• Any person may view the basic data recorded in the commercial register.
• Entries recorded in the commercial register are evidence for or against the trader from the date of registration, and any interested person may rely on them.
• Any person may request an official extract of the entry data or a certificate of no registration.

• Every trader must register in the commercial register unless exempted.
• The trader must update register data within 15 days of any change, such as:
• A final court judgment striking off the entry.
• Completion of liquidation or bankruptcy.
• Death of the trader without heirs updating the entry.
• The trader must submit an annual confirmation of the registered data.
• The trader must display commercial register data prominently at the place of business.
• The trader must provide all required information after registration such as bank account data and others.

Penalties:

• A fine not exceeding SAR 50,000 for non-compliance.
• The fine may be doubled upon recurrence, considering the seriousness of the violation and the size of the establishment.

A quasi-judicial Committee for Commercial Register Violations is formed to:

• Hear violations and impose penalties.
• Issue decisions pursuant to rules approved by the minister.

Committee powers:

• Warning the trader.
• Requiring the trader to take corrective steps to prevent future violations.
• Issuing a decision to correct data recorded in the commercial register.

Right to appeal:

Any trader against whom a committee decision is issued may appeal before the Administrative Court (Board of Grievances) within 30 days from notification.

This law is an important regulatory step that enhances the efficiency of the commercial environment and legal compliance. All traders must comply to avoid penalties and ensure continuity of their activities.

AT Lawyers & Consultants confirms its readiness to provide full legal support for applying the law so clients can operate with the highest legal compliance and avoid future issues.

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