{"id":9626,"date":"2026-10-27T00:59:32","date_gmt":"2026-10-26T21:59:32","guid":{"rendered":"https:\/\/ususlawfirm.com\/board-liability-claims-saudi-companies-law\/"},"modified":"2026-10-27T01:01:23","modified_gmt":"2026-10-26T22:01:23","slug":"board-liability-claims-saudi-companies-law","status":"publish","type":"post","link":"https:\/\/ususlawfirm.com\/en\/board-liability-claims-saudi-companies-law\/","title":{"rendered":"Liability Claims Against the Board of Directors under the Saudi Companies Law"},"content":{"rendered":"<style>.usus-tbl{border-collapse:collapse;width:100%;max-width:760px;margin:12px 0 20px;font-size:15px}.usus-tbl th{background:#f4eff9;color:#2A124A;font-weight:700;text-align:right;padding:9px 12px;border-bottom:2px solid #C9A227}.usus-tbl td{padding:9px 12px;border-bottom:1px solid #e5ddec;vertical-align:top}<\/style>\n<div dir=\"ltr\" style=\"text-align: left;\">\n<p>Liability claims protect the company&#8217;s rights and compensate a partner&#8217;s or shareholder&#8217;s own loss. Articles 29 and 30 of the Saudi Companies Law set three routes: a claim brought by the company, a claim a partner or shareholder pursues on the company&#8217;s behalf when it does not act, and a personal claim for the shareholder&#8217;s own loss. They also address the effect of a discharge and the limitation periods.<\/p>\n<table class=\"usus-tbl\">\n<thead>\n<tr>\n<th>Claim<\/th>\n<th>Who brings it<\/th>\n<th>Who receives compensation<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Company claim<\/td>\n<td>The company, by decision of the partners, general assembly or shareholders; the liquidator in liquidation<\/td>\n<td>The company<\/td>\n<\/tr>\n<tr>\n<td>Company claim pursued by a shareholder<\/td>\n<td>Partners or shareholders holding 5% of the capital (or a lower bylaw threshold) if the company has not sued<\/td>\n<td>The company only<\/td>\n<\/tr>\n<tr>\n<td>Personal claim<\/td>\n<td>The partner or shareholder who suffered a personal loss<\/td>\n<td>That partner or shareholder<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<figure class=\"usus-ig usus-ig-9626-1\"><img class=\"wp-image-9632\" src=\"https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-9626-1.webp\" width=\"1200\" height=\"1013\" alt=\" \u2014 Liability Claims Against the Board of Directors under the Saudi Companies Law (Usus Law Firm infographic)\" loading=\"lazy\" decoding=\"async\" srcset=\"https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-9626-1.webp 1200w, https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-9626-1-768x648.webp 768w, https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-9626-1-640x540.webp 640w, https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-9626-1-400x338.webp 400w, https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-9626-1-367x310.webp 367w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><\/figure>\n<h2>The company&#8217;s claim<\/h2>\n<p>The company may sue the manager or board members for breaching the Law, the articles of association or bylaws, or for errors, negligence or failure in performing their work that harm the company: for example abuse of powers, failing to protect company assets or collect its rights, exceeding authority, using the company&#8217;s name for personal deals, unlawful competition, using its funds without right, or misstating its accounts. A breach alone is not enough: there must be harm to the company and a causal link. The partners, general assembly or shareholders decide to sue and appoint who represents the company, which need not be the chairman, who may himself be a defendant.<\/p>\n<h2>A shareholder pursuing the company&#8217;s claim<\/h2>\n<p>Conditions: holding at least 5% of the capital alone or with others (or a lower bylaw threshold); the company has not sued; the main purpose is the company&#8217;s interest; a sound basis; good faith; being a partner or shareholder when suing; and notifying the manager or board at least fourteen days before filing. The company&#8217;s approval is not required, and the bylaws cannot bar or condition this right. Any compensation awarded belongs to the company alone.<\/p>\n<h2>The shareholder&#8217;s personal claim<\/h2>\n<p>A shareholder who suffers a personal loss from a board member&#8217;s fault may sue for it, proving fault, personal loss and causation: for example withholding the shareholder&#8217;s dividends, publishing false information to harm them, blocking their vote or access to the company&#8217;s books, or failing to call the general assembly.<\/p>\n<h2>Discharge and limitation<\/h2>\n<p>A discharge approved by the partners, general assembly or shareholders does not prevent these claims (Art. 30). Except for forgery and fraud, a claim is not heard after five years from the end of the financial year in which the harmful act occurred, or three years from the end of the manager&#8217;s or member&#8217;s term, whichever is later.<\/p>\n<h2>Frequently asked questions<\/h2>\n<h3>Does a board discharge prevent a liability claim?<\/h3>\n<p>No. Under Article 30 of the Companies Law, a discharge does not prevent liability claims.<\/p>\n<h3>What stake does a shareholder need to pursue the company&#8217;s claim?<\/h3>\n<p>Five percent of the capital, alone or with others, or a lower threshold in the bylaws, with fourteen days&#8217; prior notice to the board.<\/p>\n<p>Usus Law Firm handles board liability claims, shareholder disputes and corporate governance. See our <a href=\"https:\/\/ususlawfirm.com\/en\/commercial-lawyer-riyadh\/\">commercial and corporate lawyer in Riyadh<\/a>.<\/p>\n<p style=\"font-size:12.5px;color:#6a6178;border-top:1px solid #e6ddd0;padding-top:10px;margin-top:16px\"><em>This article is general legal information and is not a substitute for advice on your specific case. Court proceedings in Saudi Arabia are in Arabic; the official Arabic text of each law prevails.<\/em><\/p>\n<div class=\"usus-qbox\">\n<h2>Request a quick consultation<\/h2>\n<p>Leave your name and mobile number, and a lawyer from our Riyadh or Tabuk office will call you during working hours. We advise in English.<\/p>\n\n<div class=\"wpcf7 no-js\" id=\"wpcf7-f6963-o1\" lang=\"en-US\" dir=\"ltr\" data-wpcf7-id=\"6963\">\n<div class=\"screen-reader-response\"><p role=\"status\" aria-live=\"polite\" aria-atomic=\"true\"><\/p> <ul><\/ul><\/div>\n<form action=\"\/en\/wp-json\/wp\/v2\/posts\/9626#wpcf7-f6963-o1\" method=\"post\" class=\"wpcf7-form init\" aria-label=\"Contact form\" novalidate=\"novalidate\" data-status=\"init\">\n<fieldset class=\"hidden-fields-container\"><input type=\"hidden\" name=\"_wpcf7\" value=\"6963\" \/><input type=\"hidden\" name=\"_wpcf7_version\" value=\"6.2.2\" \/><input type=\"hidden\" name=\"_wpcf7_locale\" value=\"en_US\" \/><input type=\"hidden\" name=\"_wpcf7_unit_tag\" value=\"wpcf7-f6963-o1\" \/><input type=\"hidden\" name=\"_wpcf7_container_post\" value=\"0\" \/><input type=\"hidden\" name=\"_wpcf7_posted_data_hash\" value=\"\" \/>\n<\/fieldset>\n<span id=\"wpcf7-6ae2460d8a246-wrapper\" class=\"wpcf7-form-control-wrap cf7apps-honeypot-wrap honeypot-qf-wrap\" style=\"position:absolute;width:1px;height:1px;padding:0;margin:-1px;overflow:hidden;clip:rect(0,0,0,0);white-space:nowrap;border:0;\"><label for=\"wpcf7-6ae2460d8a246-field\" class=\"hp-message\">Please leave this field empty.<\/label><input id=\"wpcf7-6ae2460d8a246-field\"  class=\"wpcf7-form-control wpcf7-text\" type=\"text\" name=\"honeypot-qf\" value=\"\" autocomplete=\"new-password\" tabindex=\"1000\" data-cf7apps-tabindex=\"1000\" \/><\/span>\n<div class=\"usus-qf\">\n<div class=\"f\"><label for=\"q-name\">Name<\/label><span class=\"wpcf7-form-control-wrap\" data-name=\"q-name\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-text wpcf7-validates-as-required\" id=\"q-name\" autocomplete=\"name\" aria-required=\"true\" aria-invalid=\"false\" placeholder=\"Your name\" value=\"\" type=\"text\" name=\"q-name\" \/><\/span><\/div>\n<div class=\"f\"><label for=\"q-phone\">Mobile<\/label><span class=\"wpcf7-form-control-wrap\" data-name=\"q-phone\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-tel wpcf7-validates-as-required wpcf7-text wpcf7-validates-as-tel\" id=\"q-phone\" autocomplete=\"tel\" aria-required=\"true\" aria-invalid=\"false\" placeholder=\"05xxxxxxxx\" value=\"\" type=\"tel\" name=\"q-phone\" \/><\/span><\/div>\n<div class=\"f\"><label for=\"q-city\">City<\/label><span class=\"wpcf7-form-control-wrap\" data-name=\"q-city\"><select class=\"wpcf7-form-control wpcf7-select wpcf7-validates-as-required\" id=\"q-city\" aria-required=\"true\" aria-invalid=\"false\" name=\"q-city\"><option value=\"Riyadh\">Riyadh<\/option><option value=\"Tabuk\">Tabuk<\/option><option value=\"Other city\">Other city<\/option><\/select><\/span><\/div>\n<div class=\"f w\"><label for=\"q-msg\">Your case in brief (optional)<\/label><span class=\"wpcf7-form-control-wrap\" data-name=\"q-msg\"><textarea cols=\"40\" rows=\"2\" maxlength=\"600\" class=\"wpcf7-form-control wpcf7-textarea\" id=\"q-msg\" aria-invalid=\"false\" placeholder=\"One or two lines are enough\" name=\"q-msg\"><\/textarea><\/span><\/div>\n<div class=\"s\"><input class=\"wpcf7-form-control wpcf7-submit has-spinner\" type=\"submit\" value=\"Request a call from a lawyer\" \/><\/div>\n<\/div><div class=\"wpcf7-response-output\" aria-hidden=\"true\"><\/div>\n<\/form>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Liability claims protect the company&#8217;s rights and compensate a partner&#8217;s or shareholder&#8217;s own loss. Articles 29 and 30 of the Saudi Companies Law set three routes: a claim brought by the company, a claim a partner or shareholder pursues on the company&#8217;s behalf when it does not act, and a personal claim for the shareholder&#8217;s [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":9628,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[83,86],"tags":[],"class_list":["post-9626","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial-law","category-team-writings"],"acf":[],"featured_image_src":{"landsacpe":["https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-cover-9626-1140x445.jpg?wsr",1140,445,true],"list":["https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-cover-9626-463x348.jpg?wsr",463,348,true],"medium":["https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-cover-9626-300x169.jpg?wsr",300,169,true],"full":["https:\/\/ususlawfirm.com\/wp-content\/uploads\/2026\/10\/usus-cover-9626.jpg?wsr",1200,675,false]},"_links":{"self":[{"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/posts\/9626","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/comments?post=9626"}],"version-history":[{"count":1,"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/posts\/9626\/revisions"}],"predecessor-version":[{"id":9634,"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/posts\/9626\/revisions\/9634"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/media\/9628"}],"wp:attachment":[{"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/media?parent=9626"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/categories?post=9626"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ususlawfirm.com\/en\/wp-json\/wp\/v2\/tags?post=9626"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}