{"id":145911,"date":"2026-06-20T12:53:20","date_gmt":"2026-06-20T09:53:20","guid":{"rendered":"https:\/\/www.salamahlaw.com\/?p=145911"},"modified":"2026-06-20T12:53:20","modified_gmt":"2026-06-20T09:53:20","slug":"establishing-a-professional-company","status":"publish","type":"post","link":"https:\/\/www.salamahlaw.com\/en\/establishing-a-professional-company\/","title":{"rendered":"Establishing a Professional Company"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">A professional company is an independent legal entity established by persons who are legally licensed to practice a liberal profession, such as medicine, accounting, or law. It is governed by the New Companies Law issued in 1443H and is incorporated in accordance with the incorporation procedures prescribed for the chosen company form.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Meaning of a Professional Company<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Article (197) defines a professional company as follows:<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">\u201cA professional company is a company established by one or more persons who are legally licensed to practice one or more liberal professions, whether alone or together with others, for the purpose of practicing such professions.\u201d<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Establishing a Professional Company \u2013 Ministry of Commerce<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A professional company may take any of the company forms set out in Article (4) of the Companies Law, namely:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">General Partnership<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Limited Partnership<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Joint Stock Company<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Simplified Joint Stock Company<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Limited Liability Company<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The provisions applicable to the chosen company form shall apply, insofar as they do not conflict with the nature of a professional company. A partner or shareholder in a professional company\u2014regardless of its legal form\u2014shall not acquire the status of a trader by virtue of their partnership or ownership of shares or equity interests in the company.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Articles of Association of a Professional Company<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Article (200) of the Companies Law provides that:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Persons licensed to practice a single liberal profession may establish among themselves a professional company in any of the forms set out in Article (4) of the Law.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A person licensed to practice a single liberal profession may establish a professional company in the form of a joint stock company, a simplified joint stock company, or a limited liability company owned by one person, through which they may practice their profession. If licensed to practice more than one liberal profession, they may practice all or some of them through the company, after satisfying the conditions and controls set out in the regulations.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A professional company may be established by persons licensed to practice more than one liberal profession. It is also permissible to establish a joint professional company between persons licensed to practice one or more liberal professions and a non-Saudi professional company. The regulations shall specify the conditions for establishing such companies and the controls governing their activities.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Except for general partnerships and limited partnerships with respect to general partners, a natural person who is not licensed to practice the relevant liberal profession(s), or a legal person, may participate in or hold shares in a professional company. The regulations shall set out the conditions and controls applicable thereto, as well as the general rules for managing this type of professional company in a manner that preserves the independence of professional partners or shareholders in the practice of their professions.<\/span><\/li>\n<li aria-level=\"1\"><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">One-Person Professional Company<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A professional company may be established by a single person. The provisions of the Companies Law shall apply thereto; however, such person shall not acquire the status of a trader.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If a partner or shareholder in a professional company permanently loses the license to practice their liberal profession and is the sole practitioner of that profession among the partners or shareholders, or if the professional company is owned by one person, or if, due to the death of a partner or shareholder or the transfer of their shares or equity interests, the company loses the sole practitioner of a liberal profession among its partners or shareholders, the company must cease practicing that profession. In such case, the company shall be granted a period of six (6) months to rectify its status in accordance with the Law. The Minister may extend this period for a similar duration if deemed in the public interest. The company shall be dissolved upon expiry of the period without rectification.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Model Articles of Association for a Professional Company<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">To obtain a model articles of association for a professional company, you may <span style=\"color: #0000ff;\"><strong><a style=\"color: #0000ff;\" href=\"https:\/\/api.whatsapp.com\/send\/?phone=966533336845&amp;text&amp;type=phone_number&amp;app_absent=0\" target=\"_blank\" rel=\"noopener nofollow\">contact <\/a><\/strong><\/span><\/span><span style=\"color: #0000ff;\"><strong>Al-Salamah Law Firm and Legal Consultations.<\/strong><\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Professional Limited Liability Company<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A professional limited liability company may be established and shall be subject to the provisions governing limited liability companies. A partner or shareholder in a professional company who practices a liberal profession may not participate in or hold shares in another professional company practicing the same liberal profession, unless otherwise provided in the articles of association or bylaws of the company, without prejudice to relevant laws. The regulations shall specify the cases, provisions, and controls under which a licensed partner or shareholder may participate in or hold shares in another professional company.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Articles of Association of a Professional Limited Liability Company<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">To obtain a model articles of association for a professional company or a mixed professional company, you may <span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" href=\"https:\/\/api.whatsapp.com\/send\/?phone=966533336845&amp;text&amp;type=phone_number&amp;app_absent=0\" target=\"_blank\" rel=\"noopener nofollow\"><strong>contact <\/strong><\/a><\/span><\/span><span style=\"color: #0000ff;\"><strong>Al-Salamah Law Firm and Legal Consultations.<\/strong><\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Professional Law Firm<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The legal profession is considered a liberal profession, and a law firm may be established in the form of a professional company to practice such profession. A professional company may not engage in commercial activities. However, it may own real estate assets and invest its funds in real estate, securities, or any other type of investments to serve its purposes. The regulations shall determine the relevant controls.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Loss of License to Practice a Liberal Profession<\/span><\/h2>\n<p><b>Temporary Loss of License<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">If a partner or shareholder in a professional company temporarily loses the license to practice their liberal profession, they must immediately refrain from working in the company until the license is reinstated. If such person is the sole practitioner of that profession among the partners or shareholders, or the sole owner of the professional company, the company must cease practicing the profession until the license is reinstated. The articles of association or bylaws of the company shall specify how profits and losses are to be distributed in either of these cases, in respect of professional companies not owned by one person.<\/span><\/p>\n<p><b>Permanent Loss of License<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">If a partner or shareholder in a professional company permanently loses the license to practice their liberal profession, they shall be deemed to have withdrawn from the company, unless the articles of association or bylaws provide for their continuation as a non-licensed partner or shareholder, subject to the fulfillment of the conditions, controls, and rules referred to in paragraph (4) of Article (200) of the Law.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Questions &amp; Answers<\/span><\/h2>\n<p><b>What is a professional company?<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">It is a company established by one or more persons legally licensed to practice one or more liberal professions, whether alone or together with others, for the purpose of practicing such professions.<\/span><\/p>\n<p><b>Is a license required to establish a professional company?<\/b><b><br \/>\n<\/b><span style=\"font-weight: 400;\">Yes, a professional license must be obtained to practice the profession.<\/span><\/p>\n<p><b>What is the required percentage of a Saudi partner in a professional company?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The percentage of the licensed Saudi partner in a mixed professional company must not be less than 25%.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The percentage of licensed partners must not be less than 70%.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Do not risk the establishment of your company or the required incorporation steps. Contact us today to obtain an assessment of your legal needs, and we will assign you the most suitable lawyer to ensure that your company is launched properly and in full compliance with Saudi law.<\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A professional company is an independent legal entity established by persons who are legally licensed to practice a liberal profession, such as medicine, accounting, or law. It is governed by the New Companies Law issued in 1443H and is incorporated in accordance with the incorporation procedures prescribed for the chosen company form. &nbsp; Meaning of&#8230;<\/p>\n","protected":false},"author":34,"featured_media":145909,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[105],"tags":[],"class_list":["post-145911","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legal-services"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.salamahlaw.com\/en\/wp-json\/wp\/v2\/posts\/145911","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.salamahlaw.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.salamahlaw.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.salamahlaw.com\/en\/wp-json\/wp\/v2\/users\/34"}],"replies":[{"embeddable":true,"href":"https:\/\/www.salamahlaw.com\/en\/wp-json\/wp\/v2\/comments?post=145911"}],"version-history":[{"count":1,"href":"https:\/\/www.salamahlaw.com\/en\/wp-json\/wp\/v2\/posts\/145911\/revisions"}],"predecessor-version":[{"id":145912,"href":"https:\/\/www.salamahlaw.com\/en\/wp-json\/wp\/v2\/posts\/145911\/revisions\/145912"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.salamahlaw.com\/en\/wp-json\/wp\/v2\/media\/145909"}],"wp:attachment":[{"href":"https:\/\/www.salamahlaw.com\/en\/wp-json\/wp\/v2\/media?parent=145911"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.salamahlaw.com\/en\/wp-json\/wp\/v2\/categories?post=145911"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.salamahlaw.com\/en\/wp-json\/wp\/v2\/tags?post=145911"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}