Affidavit Of Business Closure Template for Saudi Arabia

What is a Affidavit Of Business Closure?

The Affidavit of Business Closure is a mandatory legal document required when ceasing business operations in Saudi Arabia. It is used to formally declare the closure of a business entity and certify that all statutory obligations have been fulfilled. This document must comply with Saudi Arabian commercial law and regulations, requiring authentication by a notary public and submission to various government authorities. The affidavit includes comprehensive information about the business, confirmation of settled obligations (financial, employment, tax), and supporting documentation. It serves as a critical tool for business owners and authorized representatives to officially document the termination of their business activities and obtain necessary clearances from Saudi government entities such as the Ministry of Commerce, ZATCA, and GOSI.

About the Affidavit Of Business Closure

When you need to close your business in Saudi Arabia, an Affidavit of Business Closure is a legally required document that formally declares the termination of your business operations. This sworn statement serves as official notification to Saudi government authorities and provides legal documentation that you have fulfilled all statutory obligations before ceasing operations.

When do you need this document?

You must prepare an Affidavit of Business Closure whenever you permanently cease business operations in Saudi Arabia, regardless of your business structure. This includes sole proprietorships closing due to retirement or financial difficulties, partnerships dissolving after completing their intended purpose, and companies undergoing voluntary liquidation. The document is also required when businesses are forced to close due to regulatory violations or court orders, or when foreign companies are withdrawing their operations from the Saudi market. Additionally, you need this affidavit when transferring business ownership requires formal closure of the existing entity before establishing a new one.

Key legal considerations

Your affidavit must include comprehensive business information, including your complete legal name, commercial registration (CR) number, business address, and entity type. You must declare your authority to act on behalf of the business and provide specific closure details, including the effective date and reason for cessation. The document requires detailed confirmation that all financial obligations have been settled, including employee final settlements, supplier payments, and loan clearances. You must also certify compliance with tax obligations and obtain clearance certificates from ZATCA. The affidavit needs notarization by a certified notary public to ensure legal validity, and you should attach supporting documentation such as financial statements, tax clearance certificates, and employee settlement records.

Legal requirements in Saudi Arabia

Under Saudi Commercial Law (Royal Decree No. M/32) and the Companies Law administered by the Ministry of Commerce, you must follow specific procedures for business closure. The affidavit must be submitted to multiple authorities including the Ministry of Commerce for commercial registration cancellation, ZATCA for final tax settlements and clearance certificates, GOSI for social insurance obligations, your local Chamber of Commerce, and the relevant municipality for license cancellation. Saudi Labor Law (Royal Decree No. M/51) requires you to properly terminate all employees with appropriate notice and final settlements before closure. You must also comply with Commercial Registration Law requirements for registration cancellation and publish closure notices in local newspapers if required by your business type. The entire process typically takes 30-90 days depending on the complexity of your business structure and the efficiency of document processing by various authorities.