The Saudi Bankruptcy Law came into effect in 2018. The aim of the Saudi Bankruptcy Law is to regulate the following:
Protective settlement.
Financial restructuring.
Small debtor's financial restructuring.
Administrative liquidation.
Liquidation.
Small debtors' protective settlement.
Small debtors' liquidation.
Protective Settlement Procedure
A process that facilitates the settlement of debts between the debtor and its creditors, while preserving a debtor's right to manage his/her own activities.
Financial Restructuring Procedure
Financial restructuring falls under the supervision of the financial restructuring officeholder, providing a way for the debtor and its creditors to reach an agreement regarding the restructuring of their debts.
Liquidation Procedure
Liquidation under the management of the liquidator, dealing with items such as settling creditors' claims, selling bankruptcy assets, and distributing the sale proceeds to creditors
Small Debtors' Protective Settlement
A general partnership is a company incorporated by two or more (natural or legal) persons who are jointly and personally liable for the company's debts and liabilities.
Small Debtors' Financial Restructuring Procedure
A small debtors' financial restructuring procedure aims to facilitate reaching an agreement between the small debtor and its creditors in order to restructure its activity within a reasonable time frame, through simple, low-cost and efficient proceedings under the supervision of the officeholder.
Small Debtors' Liquidation
It aims to sell the assets and distribute its proceeds on creditors within a reasonable time frame, using simple, low-cost, and efficient procedures under the supervision of the officeholder
Administrative Liquidation
In an administrative liquidation procedure, the aim is selling assets that are not expected to generate sufficient proceeds to cover liquidation expenses or small debtors' liquidation expenses.
The Bankruptcy Law applies to natural persons and companies engaging in commercial and professional activities, and foreign investors holding assets in Saudi Arabia.
Moreover, bankruptcy procedures aim to assist bankrupt debtors in restructuring their financial positions and enable them to resume their business, protect creditor's rights, maximize the value of bankruptcy assets, and ensure fair distribution of sale proceeds among creditors upon liquidation, decrease the procedures' costs and duration, and conduct administrative liquidation of a debtor's assets that do not cover the costs of the liquidation
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
