Exiting a limited liability companyHow to leave the company and sell your share.

What exiting means here

The limited liability company chapter has no article giving a partner the right to withdraw at will. Article 184 says the company does not end when a partner withdraws unless the articles say so. In practice, the way out is to assign or sell your share.

The word “exit” appears in the law in two cases: a partner who doesn't want to continue when the company's term is extended, whose share is valued and the extension only takes effect once it is sold and paid for (Article 183), and a partner who objects to converting the company (Article 222).

Start with the articles of association

The law requires the articles to set out the rules for assigning shares (Article 158), so they are the first thing to read. The partners may have set:

• Conditions for assignments, even between partners.
• A redemption period longer than 30 days, or another way of notifying or valuing (Article 178).
• A right for the majority to make the minority sell with it, and for the minority to join a majority sale at the same price and terms, if owners of 90% of the capital agreed to them (Article 181).

Who can you sell your share to?

To another partner

A partner may assign their share to any other partner on the terms in the articles, without a redemption right for the others (Article 178).

To a buyer from outside

1. Notify the other partners through the company's manager of the buyer's name and the terms; the manager informs them as soon as it arrives.
2. Within 30 days of being told the price, any partner may ask to redeem the share and pay for it, or have the company buy it. If several partners ask, it is split by their shares in the capital.
3. If you disagree on the value, one or more accredited valuers set the fair value in a report, paid by whoever asked to redeem, or by the company.
4. If the period ends with no request, or the requester doesn't pay, or the company doesn't buy, you may sell to your buyer.

The redemption right doesn't apply when a share passes by inheritance, a will or a court ruling (Article 178).

When are you actually out?

Signing the sale isn't enough. Article 25 says ownership of shares in a limited liability company passes by recording in the commercial register, and the transfer counts for the company and others only from that date.

The articles are amended on the Saudi Business Center through the “amend articles of association” service: 1500 for the articles, 100 for the register, plus 15% VAT, processed immediately. The manager or someone authorised online applies, and the registration must be active and not suspended.

When the partners' details change at the Ministry of Commerce, the Zakat, Tax and Customs Authority updates its records automatically.

If only one partner is left

The company doesn't end if all its shares end up with one person. That person holds the powers of the manager and the general assembly, records decisions in writing in a register kept by the company, and the company has a “basic statute” instead of articles of association (Article 157).

Before you sign: what the exiting partner checks

• The assignment rules in the articles: periods, restrictions and valuation method.
• Your share's value: the company's financial statements, and an accredited valuation if you expect a dispute.
• What's between you and the company: partner loans and unpaid amounts.
• Personal guarantees you signed for banks or suppliers on the company's behalf: agree to have them released before you leave.
• Notify the manager in writing and keep the date: the 30-day period runs from it.
• The recording date in the commercial register: that's the day you're actually out.

Selling your share on Mumtalakat

1. List your share as an exit, full or partial, and verified buyers see it.
2. Interested buyers see the documents after the NDA, and you negotiate inside the platform.
3. Both sign the contract online, and the amount is held at Dhamen until the transfer is recorded.

For selling a share step by step in other company types, read Selling a share in a company.

Common questions