Procedures for establishing a ...

The individual company in Saudi Arabia is one of the most prominent types of companies in Saudi Arabia due to the advantages it provides to its owners, as it allows the owner to fully manage and own all of his private projects.

Now, do you aspire to establish your company and do not know where to start?

Here you will find everything related to the procedures for establishing an individual company in Saudi Arabia.

 

What is meant by an individual company

An individual company is a type of commercial company owned by only one person who is responsible for managing it and making all decisions related to it.

There is no partner with him and he is also responsible for paying all debts and bearing responsibility for all obligations related to this company.

The most important feature of establishing an individual company in Saudi Arabia

 

Establishing an individual company in Saudi Arabia has many advantages, the most important of which are:-

1_ Exclusivity of ownership, as it is owned by only one person who is responsible for making all decisions and bearing all responsibilities.

2_ Personal liability, as the person is responsible for the entire company and for paying any debts, and if the company suffers losses, his funds are at risk.

3_ Direct management, as the owner is the actual manager who supervises the daily operations of the company.

4_ Ease of establishment as the procedures for establishing an individual company are easier and less complicated compared to other types of companies.

5_ The owner can leave the job whenever he likes and change the activity if he wants.

 

Conditions for establishing an individual company in Saudi Arabia

1_ The founder of the company must be a Saudi or Gulf national, except for some activities that foreigners are allowed to work in.

2_ The founder of the company must have reached the legal age according to the laws of the Kingdom in order to be able to establish his own company.

3_ There must be no violations or criminal records for this owner as they are an obstacle preventing him from practicing this activity.

4_ Before starting the procedures for establishing an individual company, the company's capital must be available and deposited in an approved local bank.

5_ The founder must obtain legal permits from the Ministry of Investment and Trade to establish his company.

6_ All necessary contracts and documents must be documented by the relevant authorities.

7_ The founder must also establish his company by the laws of establishing companies in Saudi Arabia and not violate these provisions.

 

Procedures for establishing an individual company in Saudi Arabia

To establish an individual company in Saudi Arabia, some procedures must be taken, such as

 

1_ Determine the field in which this company will practice and that it is compatible with local provisions.

 

2_ Choose the name of this company and it must not be similar to any name and must not be inconsistent with morals and cultures.

 

3_ Complete the necessary licenses and taxes.

 

4_ Prepare the papers and documents required to establish your company.

 

5_ Choose a headquarters for your company.

 

6_ Apply to establish your company to the relevant authority in the place where you want to establish your company or to the Ministry of Investment.

 

7_ Pay all fees required to establish an individual company.

 

8_ After completing all the papers, receive the licenses and permits to start the actual work.

 

9_ Make sure to register your company with the Saudi Ministry of Commerce and Investment.

 

10_ Start your actual legal work in your company, taking into account compliance with the regulations and laws and not violating them to preserve your company without any violations or fines.

 

Documents required to establish an individual company in Saudi Arabia

1_ There must be a reliable copy certified by the Ministry of Foreign Affairs for the commercial register of the company you wish to establish.

2_ The capital must not be less than the amount recognized in the provisions for establishing companies in Saudi Arabia.

3_ The existence of a bank certificate confirming the deposit of the capital in an approved local Saudi bank.

4_ The existence of a legal permit confirming the approval of establishing this company on Saudi lands.

5_ Provide evidence that the owner has no criminal record or violations.

6_ A copy of the company owner's ID and a valid passport if he is not Saudi.

By submitting these documents and following the steps of the procedures for establishing an individual company in Saudi Arabia, you can establish your company legally in Saudi Arabia and to ensure that it is established correctly and legally without facing any obstacles, seek the help of the Itmam Foundation.

 

Form of the  individual company contract

The contract of incorporation must contain all the data related to the company such as

1_ The company owner's data.

2_ The name of the company.

3_ The company's activity and the goal to be achieved.

4_ The amount of the company's capital.

5_A declaration from the owner that he is personally responsible for making all decisions and bearing all responsibilities related to the company.

6_Determining the actual headquarters of the company.

7_The validity of this company if it is temporary.

8_The procedures that will be followed in the event of the liquidation and dissolution of the company.

9_The owner's signature on this contract.

 

Disadvantages of establishing an individual company

1_Difficulty in obtaining loans as lenders need a lot of guarantees to trust one person to bear this responsibility.

2_There are some activities prohibited for individual companies such as offering them for public subscription, dividing capital, and distributing it into shares, investments, banks, and insurance exercises as well.

 

The difference between an individual company and a limited liability company

There is a fundamental difference between individual companies and limited liability companies,

Individual Company

 is owned by only one person who is responsible for making all decisions bearing responsibilities personally, and paying all debts that expose the founder's personal property to risk in the event of failure to pay these debts, but also establishing this company does not require a large capital and these companies are often tax-free, but these companies usually end with the death of the owner.

 

Liability companies

are a company owned by one person or several partners with him, whose number may reach fifty partners, and the liability is limited only to the investor's capital and the partners bear debts only to the extent of their shares in this company, which guarantees them the safety of their private property, but its establishment requires many procedures that are more complex than for an individual company and it also has a special tax system, which can be