The new commercial register: one register and the annual confirmation

The Ministry of Commerce announced that the Commercial Register Law and the Trade Names Law, together with their implementing regulations, came into force on 3 April 2025, corresponding to 5 Shawwal 1446 AH. The new framework brought two changes that touch every business: a single commercial register for the business across the Kingdom covering all of its activities, with subsidiary registers no longer issued; and a new requirement for an electronic “annual confirmation” of the registered data in place of the former practice of renewing the register.

This article sets out what those two changes mean in practice for a business and its contracts, and what to review now that they are in force.

From multiple registers to one

Under the former practice a business might hold a principal register plus subsidiary registers for its branches or for its activities in different cities, each with its own data and its own dates. That produced duplicated data, staggered renewal dates and repeated administrative work.

Under the new framework the business has a single register across the Kingdom covering its activities, and subsidiary registers are no longer issued. In practice that means:

• The reference data for the business is consolidated in one place.
• There is no longer a set of separate dates to track for subsidiary registers.
• What a business is asked to produce when contracting, opening an account or applying for a licence is simpler.

Organising branches and stating where an activity is carried on remains a live matter, but it is handled differently from issuing a separate register for every branch.

Annual confirmation instead of renewal

The essential idea in the annual confirmation is that it is not a formality to extend the life of a document. It is a confirmation by the business that its registered data is still accurate.

That is a change in the nature of the obligation: from a “renewal” carried out to keep a document in force, to a “confirmation of accuracy” submitted electronically on time. The consequence is that neglecting it is not merely an administrative delay; it concerns the accuracy of what is recorded in a register that third parties rely on.

Per the Ministry of Commerce announcement, a trader must confirm the register data every twelve months from the date of issue. The Commercial Register Law provides that the registrar suspends a trader’s registration if the annual confirmation is not submitted within ninety days of its due date, and that before suspending he must warn the trader that the registration will be suspended fourteen days from the date of the warning; if the period passes without the confirmation, the trader is notified of the suspension decision.

A suspension decision suspends all licences issued against the suspended registration. The registration stays suspended for one year, and the registrar must lift the suspension if, within that year, the trader applies to lift it, submits the annual confirmation and pays the prescribed charge together with the prescribed fine. If he does not, the registration is struck off — except for a company or a branch of a foreign company, which has no right to apply to lift the suspension after the period, and where the Ministry may, at the end of it, require the partners or shareholders to dissolve the company or apply to the competent court for its dissolution. That is a material difference between an establishment and a company, and not one to overlook.

Why registered data matters in contracts

Commercial register data is not an internal administrative matter; it is what third parties rely on when dealing with a business. It bears on at least three things.

Identifying the contracting party. A contract is made with the business as an entity with a name and a registration number. An error in describing the party — an old trade name, or a cancelled subsidiary register number — creates an ambiguity that can surface at the point of a dispute or of enforcement.

The signatory’s authority. Whoever signs for the business must be authorised, and the authority data is drawn from what is registered. A change of manager or of partners without updating the data opens the door to a challenge to the validity of the signature. The Law does not leave updating to the business’s discretion: on any change or amendment to the registered data, the trader must update it within fifteen days of that change occurring.

The scope of the activity. Contracting for an activity not covered by the business’s registration or licence is a matter to be checked before signature, not after.

A hypothetical: a business with several sites used to make supply contracts in the name of a branch, using the branch register number. With subsidiary registers no longer issued, the business needs to standardise how its contracting party is described in new contracts, and to review existing contracts that refer to data no longer current — not to invalidate them, but to avoid an argument about who the party is at the point of enforcement.

What to review in the business now

• Registered data against reality: the actual activity, contact details, the manager, the partners, the address.
• Contract templates: how “first party / second party” is described and which registration data is cited.
• Authorisations: who signs, up to what limit, and whether their authority is documented and current.
• Invoices and formal correspondence: the data printed on them.
• Obligations in existing contracts: is there a clause requiring notice to the other side when register data changes?
• The annual confirmation date: who inside the business is responsible for it, and how are they reminded.

Registration is not a professional licence

A frequent mistake is assuming that commercial registration is enough to carry on any activity. In fact many activities require, in addition to registration, a licence from a competent authority according to the type of activity.

The register establishes the business’s commercial registration; the lawfulness of carrying on a particular activity may require a separate licence with its own conditions, duration and issuing authority. Confusing the two can lead to carrying on an activity without a required licence, which has consequences of its own.

Trade names

The trade names framework was issued alongside the register framework, and a trade name is a distinct matter from a trademark, although the two are often confused.

The working rule for a business: the name used in dealings, contracts, signage and invoices should be the registered name itself; and registering a trade name is one thing while protecting a trademark is another, with its own procedure and its own authority.

The effect on dealings with third parties

The commercial register is a document third parties rely on: the bank when opening an account, a customer before contracting, a supplier before granting credit, a government body when considering a licence application or a tender.

The weight of that data is laid down expressly: data registered in the commercial register is evidence for or against the trader from the date of its registration, and no particular required to be registered or updated may be relied on against third parties unless it has been registered or updated — although a person with an interest may rely on that particular against the trader. The effect runs one way: a failure to update can be used against the business, and cannot be used by it against anyone else.

With the register consolidated, what is produced to third parties is a single statement rather than several documents. That shortens the procedure, and it also makes any gap between reality and the register more visible. A business that changed its manager and never updated the registration will meet the difference at its very next transaction.

The flip side is that anyone contracting with a business should get into the habit of checking before signature: read the registration, confirm it is current, confirm the signatory’s authority, and confirm the activity covers the subject of the contract. That review takes very little time and prevents a dispute that is hard to cure later.

A suggested internal procedure

In small and medium businesses, regulatory changes are implemented through a simple internal routine rather than an elaborate system:

• One file holding the current registration extract and the date it was last updated.
• A named person responsible for the annual confirmation, with a reminder well before the date.
• A standing rule: any change of manager, partners, activity or address triggers an update to the registration before any new contract is signed.
• An annual review of contract and invoice templates to confirm the data still matches.

That simple administrative habit prevents most of the problems that arise in this area, and its cost is negligible next to the cost of dealing with them afterwards.

Practical questions

I have a business with three sites — do I need a register for each? The new framework provides for a single register for the business across the Kingdom and no longer issues subsidiary registers. The decree issuing the Law granted those registered in the commercial register a five-year period, running from the date it came into force, to regularise their subsidiary commercial registers, and all their subsidiary registers are struck off at the end of that period under a mechanism set by the Ministry of Commerce. The period is not a deferral without consequence; it has a fixed end date. How the places where the activity is carried on are recorded should be checked against the Ministry’s current procedure.

What if I miss the annual confirmation? Suspension is preceded by a fourteen-day warning; the registration, the linked services and the licences issued against it are then suspended if the confirmation is not submitted within ninety days of the due date; and the suspension runs for one year, during which it can be lifted by submitting the confirmation and paying the charge and the fine. After that the registration is struck off — while a company or a branch of a foreign company has no right to apply to lift the suspension once the period has passed. The detail should be checked with the Ministry of Commerce before it is relied on.

Do my old contracts referring to a subsidiary register become invalid? A change in the framework does not by itself invalidate an existing contract, but it is worth reviewing the wording in renewals and new addenda so that no ambiguity arises about who the party is.

Responsibility for the data

Moving from renewal to confirmation shifts additional weight onto the business: it is the business that confirms its data is accurate. Confirming data that is not accurate is not a neutral click; it has consequences.

So before each annual confirmation, the data should actually be reviewed rather than nominally confirmed: has the activity changed? Has the manager or have the partners changed? Is the address still current? The confirmation is submitted after that review, not before it.

In short

The two core changes — one register per business, and an annual confirmation of the data — simplify the procedure and, in exchange, raise the importance of the registered data being accurate.

The most useful thing a business can do now is straightforward: reconcile what is registered with what is real, update contract templates and authorisations, and name someone internally as responsible for the annual confirmation date. The detail of periods and procedures should be checked with the Ministry of Commerce and against the text of the Law and its regulation.