In this article, we`re going to give you a list of 10 major changes that will affect public companies under the new CDC: The regulations cover different types of companies, including closed-loop public companies (SAOCs), limited liability companies (LLCs), and sole proprietorships (SPCs). Public joint-stock companies (SAOGs) are expressly excluded from these regulations and are subject to separate capital market supervision regulations. Much of the procedures and communication with MOCIIP must be done through MOCIIP`s electronic system, including, but not limited to: filing an application for incorporation of a commercial company, registration of a commercial company or branches of foreign companies, updating of share capital, whether increased or decreased, application for approval of liquidation, conversion of the legal form of the company, mergers, appointments of directors, etc. In case of submission of a request, MOCIIP may request additional information and documents, and the Company is obliged to respond within 7 days of the date of the request, otherwise MOCIIP has the right to refuse such request. The Commercial Companies Act (the “CDC”) promulgated by Royal Decree No. 18/2019 is the cornerstone of company law in Oman. The Ministry of Trade, Industry and Investment Promotion (“MOCIIP”) has now issued regulations that apply to all forms of Omani business companies, with the exception of state-owned companies. The regulations were published in the Official Journal on 24 October 2021 and entered into force on 25 October 2021. Below is a general summary of some of the important changes implemented by the Regulations.

At present, it is not possible to assess how some of these provisions are interpreted and shaped by MOCIIP in practice. The ER has issued detailed provisions concerning the new form of legal companies introduced by the Commercial Companies Act, the single-member limited liability company. Important changes have been introduced in public limited companies (JSC) in Oman`s CCL and summarized and discussed below: Sole proprietorships were first introduced into the CCL to provide another choice for those who prefer to operate through a legal entity but do not want partners. According to the regulation, the agreement to set up a one-man business is based on a model developed by MOCIIP. In addition, the incorporation agreement must contain certain information, including: (i) the name and registered office of the company, (ii) the share capital (cash and/or tangible assets) and the nominal value of the shares, (iii) the name of the shareholder, (iv) the purpose of the company and (v) the date of incorporation of the company and its duration. The company name is followed by “SSC”. The RA also contained provisions for the establishment of CROs to protect the interests of companies and institutions based outside the Sultanate. The RA clarified the authorized and unauthorized activities of CROs. The introduction of the emergency room is part of the measures taken by the Omani government to improve and improve the legal framework for commercial enterprises so as to contribute to the achievement of Oman`s Vision 2040 national priorities of boosting the private sector and activating the economy. Oman`s new Business Companies Act (CCL) is now in force, completely repealing the previous 1974 law.

Al Tamimi & Company`s corporate team reviewed the CDC and identified a number of incremental changes to the rules governing legal entities in Oman, including changes that will require companies to act in the coming months. The main structural strength of the CDC is that limited liability companies, the entry-level corporate vehicles commonly used to do business in Oman, can now be incorporated with a single natural person or corporate shareholder. It is important to stress that this single-shareholder option does not constitute an explicit repeal of Oman`s Foreign Capital Investment Law and the option to create a legal entity with a sole shareholder is likely to only be available to GCC companies, GCC citizens, and/or investment arms of the Omani government. Company Information: The regulation requires all companies to include the following information in all their documents and publications: The new Commercial Companies Act (CCL) in Oman was promulgated by Royal Decree No. 18 of 2019 (the Law) and published in the Official Gazette on February 17, 2019. The Act entered into force within 60 days of its publication on 17 April 2019 and repealed Oman`s former Business Companies Act (Act No. 4 of 1974, as amended). The current law is considered one of the modern corporate decrees and has sought to abolish complex and cumbersome governance and other related procedures.

For the first time, the law also paves the way for the formation of a single-member company by a natural or legal person and contains numerous provisions relating to the liability of directors and shareholders of the company. Section 3 of the new CDC defines a business entity as a for-profit business created by two or more persons. Under Article 13 of the Act, investors may incorporate a company, provided that their principal place of business is located on the mainland. With regard to free zones, it is specified that these free zone units are subject to the regulations of the corresponding free zone approved by the Council of Ministers. In the absence of such legislation for free zone enterprises, it is safe to say that such a company is subject to the CDC. Companies wholly owned by Omani nationals enjoy all rights restricted by Omani corporate law. Under the previous law, commercial companies could adopt one of 6 forms of partnership, including a partnership, a limited partnership, a joint venture, a joint-stock company and a limited liability company. The new law provides for a seventh form, a single-member company according to article 4 of the law. In this article, we want to discuss the changes that mainly involve three forms of companies, namely joint-stock companies, limited liability companies, and joint venture companies. Existing businesses will have one year to comply with the provisions of the new CDC.

While the new CDC largely retains the legal framework currently applicable to public companies in Oman, it codifies a number of management practices already followed by public companies and makes significant changes to the way a public company is managed. The ER requires commercial companies wishing to publish advertisements, contracts or documents, warnings, receipts, papers or publications to provide the name, legal form, address, place of work, company registration number, means of communication and any other company data provided by MOCIIP. Other companies may benefit from the possibility of setting up sole proprietorships and should consider transferring ownership of the share capital from the minority shareholder to the majority shareholder with the approval of the Ministry of Trade and Industry. As previously stated, this option is unlikely to be available to companies subject to Oman`s Foreign Capital Investment Law, which remains in force. The general idea of regulation seems to be a strengthening of corporate supervision and control. Examples include the power to request audited financial statements or other data from a company at any time, and the requirement for companies to engage licensed professionals for various processes such as assessing in-kind contributions. This approach becomes even more pronounced with respect to private corporations, where we can see additional requirements for capital increases, more mandatory requirements for the composition of extraordinary general meetings, the introduction of certain conditions that a director of a closed corporation must meet, and the mandatory appointment of a full-time legal counsel and internal auditor. The ER specified the controls for the registration of branches of foreign companies with MOCIIP via the electronic system, provided that the branch takes the legal form of the company at its headquarters and for the same purposes. Many Omani companies will have adopted constitutional documents a few years ago without making subsequent changes to reflect international practices and improvements in corporate governance.