Saudi Arabia’s Ministry of Commerce has started implementing a ministerial decision to impose fines on anyone who fails to submit financial statements in accordance with the provisions of the Companies Law and its regulations.

 

The decision was taken by the Minister of Commerce Dr Majid bin Abdullah Al-Qasabi, a Saudi Press Agency report said. The fines are as follows:

Violators in all types of companies (except for unlisted joint-stock companies)

SR8,000 ($2,132.5) for the violator in a single-manager company with a capital of less than SR500,000.

SR4,000 for the violator in a company with two or more managers with a capital of less than SR500,000.

SR12,000 for the violator in a single-manager company with a capital of SR500,000 or more.

SR6,000 for the violator in a company with two or more managers with a capital of SR500,000 or more.

Violators in unlisted joint-stock companies

SR15,000 for the violator if the company's capital is less than SR5 million.

SR20,000 for the violator if the company's capital is SR5 million or more.

 

Recurring violation

The decision states that if the violation of failing to submit financial statements is repeated during the statutory period for the following fiscal year after the previous fine decision has become final, the fine will be increased by 50%.

 

Based on the ministerial decision, violators will be notified of the direct fine decision in accordance with the mechanism stipulated in Article 94 of the executive regulations of the Companies Law.

 

The Companies Law issued in 1443 AH states in Article 17: "At the end of each fiscal year, the company's financial statements shall be prepared according to the generally accepted accounting standards in the kingdom. Such statements shall be submitted in accordance with the regulations described within six months following the end of the fiscal year, in accordance with the provisions set forth in the law."

 

The law also stipulates in Article 262 fines for violations against anyone who neglects or fails to perform their duty, with paragraph E specifying a fine against: "Whoever fails to perform his duty to keep the company's accounting records and supporting documents to clarify its business details and contracts, to prepare financial statements in accordance with accounting standards approved in the kingdom, or to file the same in accordance with the provisions of the Law."-- TradeArabia News Service