Losses reach half of capital
Our accumulated losses are more than half our capital. What must we do?
The situation
Article 182 of the Companies Law requires LLC managers to call a partners meeting when losses reach half of capital. Automatic dissolution at 50 percent losses was removed in the 2023 law.
The law
- Art 182, Companies Law: LLC managers must call a partners meeting when losses reach half of capital
What it means for you
Example: capital SAR 500,000 and losses SAR 280,000, which is above SAR 250,000. Partners decide whether to continue, inject capital or dissolve. Record the decision and keep it with the statements. Lenders and ZATCA may ask for it.
What to do
- Compute losses against capital.
- Call the partners meeting.
- Record and file the resolution.
We can do this for youAnnual financial statements, statutory audit and Qawaem filing within six months: SAR 6,000