Sources reviewed
From annual accounts to a distribution decision
The manager prepares annual accounts, an activity report and any proposed distribution. Partners must receive the accounts, activity report and any auditor’s report at least 21 days before the annual meeting. The assembly considers the accounts and decides the proposal. It sets the proportion of net profit after reserves to distribute. The resolution specifies entitlement and payment dates. [1]
How do you calculate the balance?
Suppose net profit after reserves is SAR 1 million and the assembly distributes 40%. A quarter interest yields SAR 100,000 assuming equal rights per unit and no contrary provision in the articles. Deduct actual receipts and check ownership on the entitlement date and the articles before finalising the calculation. [1] The commercial court has subject-matter jurisdiction over claims arising under the Companies Law. For recovery of a declared distribution, also check who and what the dispute-resolution clause in the articles covers. [3] Article 173 permits the articles of association to provide for arbitration or other dispute resolution for the disputes it specifies. [1]
What remedy fits the discrepancy?
If the only document is a manager’s recommendation, obtain the minutes and resolution before asserting a fixed debt. If a resolution exists and payment has matured, reconcile it to the bank and partner ledgers. If the LLC cites an earlier transfer as payment, trace its reference. It may have repaid a partner loan in a different year.
Applicability on 2026-10-30
This guide addresses a Saudi LLC and events in 2026. The current Companies Law replaced its predecessor after a 180-day commencement period following publication in 2022. [2]
Sources
- نظام الشركات | Companies Law 167(1)–(2), 168, 175(1)–(3), 173
- نظام الشركات | Companies Law 280–281
- نظام المحاكم التجارية | Commercial Courts Law 16(4)
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