Shareholder and Partner Dispute Lawyer in Dammam Shareholder and Partner Disputes

The Companies Law allows one or more partners or shareholders representing 5% of the company's capital, unless its articles set a lower percentage, to bring the company's liability action against its manager or board members if the company itself does not bring it, provided the action serves the company's interest, rests on valid grounds, the claimant acts in good faith and is a partner or shareholder when filing, and the manager or board members are notified of the intent to sue at least fourteen days before filing. Assessing whether these conditions are met is the first step in a matter like this.

In a joint stock company, one or more shareholders representing at least 10% of the voting shares may request an ordinary general assembly, and the board must call it within thirty days of the request; if it does not, the competent authority may call it.

It starts with assessing the partner's or shareholder's legal position under both the Companies Law and the company's own articles of association. This includes confirming their ownership percentage, because certain rights, such as requesting a general assembly or suing on the company's behalf, are conditioned on holding a set percentage of capital or shares.

In some cases, yes. Where the dispute is capable of an amicable resolution, negotiation may be the appropriate course before any other step, and the company's articles of association or the partners' agreement may include their own mechanisms for handling disputes, worth reviewing first. Where amicable resolution is not possible, the available statutory rights or litigation before the competent judicial authority may be pursued, depending on the nature of the dispute.

Yes, they may bring a personal claim where the error of the manager or board members caused them a particular harm. A company's manager and board members are jointly liable to the company, partners, and shareholders for damage caused by violating the law or the company's articles of incorporation or association, or by error, negligence, or default in performing their duties, and any condition to the contrary is void.

No. Approval by the partners or the general assembly discharging the manager or board members does not prevent a liability action, subject to the statutory periods after which the action is not heard.

Except in cases of forgery and fraud, the action is not heard after five years from the end of the financial year in which the harmful act occurred, or three years from the end of the manager's or board member's term, whichever is later.

They typically include the company's articles of association and any agreement between the partners or shareholders, and the shareholder or partner register showing each party's ownership percentage. They also include the minutes of the board or general assembly meetings relevant to the dispute, and financial statements or documents relevant to the decision or distribution in dispute.