The best joint stock company that gives profits in 2023 in Saudi Arabia and the rules for distributing profits –
best dividend stock company, Joint stock companies allow small investors to invest their money without owning a large number of shares. Companies is an attractive matter, and the risks that the investor may face must be taken into account. In this article, we mention the best dividend-paying joint-stock company.
What are joint stock companies
It is possible to reach a specific definition of the joint-stock company as a company owned by investors, through which investors buy and sell shares so that they own part of the company, and the percentage of ownership depends on the number of shares owned by each person, also it allows shareholders to buy, sell and transfer shares between each other without With minimal risk to the company, it is possible for individuals to build a thriving business where every member contributes to the success of the company.
Types of joint stock companies
The joint stock company is considered one of the largest companies that raise funds, as well as it is owned by the shareholders, and it is distinguished by the ease of the shareholders in buying and selling shares in it, as well as the percentage of ownership of each person is determined by the number of shares that the person owns, we mention the following types of joint stock companies:
- Public joint-stock companies The number of investors is often large, and some of them are ignorant, and its capital is divided into shares of equal value, and it is negotiable and listed in the stock market by public subscription.
- Private joint-stock companies are between individuals with whom they have ties of trust, and it is possible that they are from one family and then it is called a civil company, and if the company wants to offer its shares, it offers them by private subscription.
See also: Types of joint stock companies in Saudi Arabia 2023, their characteristics and names
Advantages of joint stock companies
A joint-stock company is usually established by law, so that everyone adheres to the laws and regulations just like ordinary people, and it allows legal persons to own real estate, sign contracts, borrow money, sue other companies, etc. As for the controller of legal persons is the board of directors, which fully delegates their rights, and the most prominent features of companies The contribution is explained below:
- Where different members invest a large amount of capital.
- In the event of a capital shortage in the joint-stock company, it is possible to issue shares to the public
- Accordingly, huge capital is collected when shares are issued.
- The joint stock company has a separate legal existence, as the life of the joint stock company is not affected by the death of the members.
- Therefore, the joint-stock company has a long-term life.
- In the event of changes in management, the board of directors or some members may come or go, the company’s function is not affected.
- The shareholders are required not to pay the excess debts of the company by selling their private and personal property.
- Therefore, the shareholders are liable up to the amount invested, due to the provision of limited liability
- Potential investors are also attracted by a joint-stock company.
- The joint-stock company owns the freely transferable shares.
- No one is obliged to join or leave the company.
- Also, no permission or mutual consent is required to transfer the shares of a joint stock company.
- The joint stock company is characterized by democratic management.
- So that it is managed by the majority of shareholders who elect the Board of Directors.
- They are also responsible for managing the activities of the joint stock company, and qualified members are elected from the elections to manage the company.
General faith and trust
- The joint-stock company is obligated to disclose the financial documents for the annual general assembly meeting.
- Also, banks and financial institutions believe in a joint stock company because of the disclosed accounts.
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What are the disadvantages of joint stock companies
The company is full of advantages as well as defects, which are inevitable, because of the difficult legal procedures that are difficult to establish or operate compared to commercial and individual companies, and the reason for that is that it collects capital from the general public, we explain in those lines what are the disadvantages of joint-stock companies:
- Establishing a joint stock company is something that needs more time and resources, as the usual time is from a few weeks to a few months, and this is a very expensive process and the main disadvantage of these companies.
- The country’s corporate law also requires all listed companies to disclose their financial records, which means a serious lack of confidentiality, as all documents will be made public.
- The need to adhere to strict laws and regulations that greatly restrict their freedom, and therefore the activities of the joint-stock company are restricted.
- The stakeholders in the joint stock company are many and very diverse, ranging from shareholders to promoters and bondholders, and this diversity leads to more problems and conflicts of interest.
See also: Establishment of a joint stock company Explanation of the establishment of joint stock companies
The best dividend stock company
Many companies, especially those with very high returns, may end up not being able to pay the estimated amount, as high-yield stocks are actually the stocks that most investors should stay away from, given that there is a large gap between the expected dividend yield and the dividend yield. Real shares, and the best joint-stock company that gives profits, we mention the following:
|arrangement||company||The number of years during which dividends have been distributed||Combined cash dividends per share (SAR)|
|1||Where the cement of the south||85.63|
|3||So is Jarir||79.57|
|5||Also SABIC for agricultural nutrients||75.19|
|7||As Eastern Cement||54.18|
|9||Also, Arab Cement||50.21|
|14||Then the Saudi French||16.54|
|27||So are the refineries||9.32|
|31||Also for real estate||7.18|
|44||Also Fitaihi Group||6.83|
|54||Sin for the gene||2.00|
|56||Add to that abundance||1.30|
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What are the rules for distributing profits in joint stock companies?
The distribution of profits in joint-stock companies is subject to the provisions of the law, as well as to what is required by the company’s system and what is approved by the general assembly in this regard. Dividend distribution in joint stock companies:
- Where 10% of the profits are considered to form a statutory reserve, and accordingly, the association may stop setting aside when the reserve reaches 50% of the capital
- It is also permissible to set aside a percentage of the profits to form a consensual reserve for purposes determined by the company’s by-laws.
- It is also permissible to set aside a percentage of the profits to form other reserves that serve the company.
- The distribution of the prescribed percentage shall be for the owners of preferred shares
- 5% of the paid-up capital to common stockholders.
- While the share of the founding shareholders (not exceeding 10%) of the net profits.
- Moreover, the system did not specify how to dispose of the remainder, so it can be transferred to a retained earnings account and appears in the statement of financial position within shareholders’ equity.
The best joint-stock company that gives profits, the most important details we explained in this article, while identifying the characteristics of companies and the most prominent defects and risks that investors fall into and should beware of.