Five years to rectify commercial records: A new decision gives establishments a valuable opportunity before being deregistered

In a move considered one of the most prominent initiatives to improve and regulate the commercial sector, the Ministry of Commerce issued a new decision granting businesses an exceptional opportunity to rectify their commercial registrations without incurring any fines. Decision No. (288) opens a five-year window, starting April 3, 2025, and specifically targets branch commercial registrations, giving their owners several legal options to amend their status before automatic deregistration takes effect. The Ministry of Commerce approved a new mechanism for rectifying commercial registrations under Ministerial Decision No. (288), issued on September 20, 1446 AH (corresponding to 2025 CE), in a step aimed at improving the business environment and enhancing compliance with regulations, while giving businesses an opportunity to correct their status without incurring fines within a specified timeframe. The mechanism includes the possibility of amending or canceling a non-compliant commercial registration, provided that this is done within the specified timeframe. The mechanism also includes details specific to branch commercial registrations, where owners are given three options to rectify their status: closing the branch registration, converting it into a new company, or transferring its ownership to a person not registered in the commercial register. The Ministry confirmed that these options must be implemented within a period not exceeding five years, starting from April 3, 2025. The decision also stipulated that licenses and approvals associated with the branch registration will be transferred to the new registration if it is transferred to another company or person, after completing the regulatory procedures. In the event that the branch registration is cancelled, the licenses will be automatically transferred to the main registration associated with it. The Ministry of Commerce emphasized that failure to correct the status of the branch registration within the approved time period will lead to the automatic cancellation of the registration, without the need for prior notice. This reinforces the importance of interacting with the decision and taking advantage of the correction period. This step comes within the framework of the Ministry’s efforts to support compliance, improve the quality of commercial data, and provide a more organized and transparent environment for establishments operating in the Kingdom