Monitoring Non-profit Companies – Comparative Analytical Study in light of Saudi Legislation

The Saudi legislation introduced non-profit companies' regulation in the Companies Law issued in 2022, where it is indicated that companies can be established in which do not aim to achieve profit for the partners, but for social and humanitarian purposes. The law of this type of company allows...

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Bibliographic Details
Authors: Rjoub, Abdelsalaam Mohammad (Author) ; Alsubaie, Sara (Author) ; Awwad, Ahmed Mohammed (Author)
Format: Electronic Article
Language:English
Published: 2024
In: International journal of criminal justice sciences
Year: 2024, Volume: 19, Issue: 1, Pages: 312-329
Online Access: Volltext (kostenfrei)
Check availability: HBZ Gateway
Keywords:
Non-profit companies
Terrorist financing
Money Laundering
Monitoring
Auditing
Saudi law
Description
Summary:The Saudi legislation introduced non-profit companies' regulation in the Companies Law issued in 2022, where it is indicated that companies can be established in which do not aim to achieve profit for the partners, but for social and humanitarian purposes. The law of this type of company allows one to receive financial resources from others in the form of grants (donations) or endowments, which exposes this type of company to the risks of illegal exploitation such as Terrorist Financing or money laundering. In addition, the founding partners of the non-profit companies can also deviate from benefiting from the company's profits for their personal interest. To prevent such acts, the objective of this research was to examine the regulatory frameworks, identify risks of illegal exploitation, and evaluate how external and internal monitoring systems can enhance the sustainability and public trust of non-profit companies in Saudi Arabia. For this purpose, an analytical content analysis technique was applied.  The key findings showed that it is necessary to appoint an external auditor to monitor the sources of financing not to be a cover for terrorist financing or money-laundering. The study ended with a conclusion and a set of recommendations that help these companies to be sustainable and not lose the confidence of the public, including the appointment of an external auditor to monitor the sources of financing in order not to be as a cover for financing terrorism or money laundering.
ISSN:0973-5089