The Legal Framework of the Company Director’s Obligations and Liability under the Saudi Civil Transactions Law

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Dr. Waleed Yahya Alsalehe

Abstract

A company is considered a legal entity that carries out its activities through a manager who is responsible for managing its affairs and administering all related matters. A company manager is "the person responsible for managing its day-to-day business and making the decisions necessary to conduct its activities and achieve its objectives. He/she legally represents the company before third parties, acts in its name and for its benefit, and is responsible for complying with all applicable laws and regulations." The importance of this research lies in highlighting the pivotal role played by a company manager as its legal representative and the holder of supreme authority within its administrative structure, regardless of the nature of the activity for which the company was established. Hence, the need to study the nature of the obligations and duties incumbent upon the manager, in addition to clarifying his/her responsibilities towards the company and third parties, as stipulated in the Civil Transactions Law. This research aims to clarify the concept of a company manager and his/her legal nature, identify his/her obligations related to company management, and explain the nature and basis of his/her responsibilities, based on the Civil Transactions Law. The study concluded with several important findings, most notably that the company director is bound by the duties and powers stipulated in the articles of association and by laws and may not exceed them. He must also ensure that all activities carried out within the company comply with relevant regulations and legislation that may affect the company's operations.

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Research Articles — Volume 1