Commercial Companies Law — articles 101–200

The Regulations shall specify the data which must be included in the notice of subscription, the bodies which are designated for receiving the applications for subscription and the number and responsibilities of such bod…

The constitutive committee shall, subsequent to the approval of the prospectus, publish the notice of subscription in accordance with the rules and dates specified by the Regulations.

The application for subscription, which may be in an electronic form, must be drawn up according to the form prepared by the Authority.

The constitutive committee shall appoint one of the companies licensed by the Authority as an underwriter for covering the prospectus and disclose the direct and indirect costs related to the coverage. The underwriter co…

The Authority may determine the procedure and conditions of subscription, the maximum and minimum number of shares which must be subscribed for, the cases in which the application for subscription is acceptable, the case…

If an invitation is issued to the public to subscribe for the shares of a company, the founders who make contributions in kind must give a description of such contributions in the subscription document and the Regulation…

The founders shall, within thirty (30) days of the date the decision of establishment of the company is issued, invite the public for subscription. The subscription shall remain open in accordance with the period specifi…

The constitutive committee shall convene the constitutive general meeting at the place and date specified in the prospectus. The Concerned Body must be notified of the date for convening of such meeting and the Concerned…

The constitutive general meeting shall be chaired by a member of the constitutive committee. The convening of the meeting shall not be valid unless the meeting is attended by shareholders in person or by proxy representi…

The constitutive committee shall present to the constitutive general meeting a report containing sufficient information on the actions taken and the amount spent for establishment of the company and the actions made on b…

The constitutive general meeting shall have the following functions: 1. making sure that the conditions necessary for establishment of the company have been observed. 2. ratification of the amendments made to the article…

Companies which carry out their businesses according to the provisions of Islamic Sharia shall comply with Islamic Sharia in all the acts performed by them and the Concerned Body shall issue a special regulations contain…

Without prejudice to the right of submission of a petition for a judgment of invalidity of the company if there is a defect in the procedure of its establishment, any interested person may, within three (3) years from th…

The company shall not raise its invalidity because of a defect in the procedure of its establishment as a defence. The founders shall be jointly liable for the damage resulting from the dissolution of the company by reas…

The company’s first board of directors shall register the company with the Registrar within fifteen (15) days of the date of convening the constitutive general meeting. The members of the board of directors shall be join…

The company shall facilitate perusal by the public of its articles of association at its principal place of business and on its website on the internet. Any person shall be entitled to obtain a true copy of the articles …

The board of directors shall draw up internal regulations for regulation of the company’s management, its business and the affairs of its employees, within one year from the date of registration of the company with the R…

A company shall have an issued share capital and its articles of association may specify an authorized share capital exceeding its issued share capital. The share capital of a company shall be represented by shares that …

A share shall not be owned by more than one person except in the case of inheritance, provided that the heirs shall be represented by one representative to be appointed from among them, or they shall be represented by th…

The value of a share may be reduced by dividing it, and its value may also be increased by merger of shares, according to a resolution of the board of directors.

Shares shall enjoy equal and inherent rights in the ownership thereof. The most important of these rights are namely, the right to receive dividends declared by the general meeting, the preferential right of subscription…

The articles of association of a company may establish certain privileges for some of the shares with respect to voting, dividends or proceeds of liquidation or such other rights, provided that the shares of the same cla…

Concessionary shares may be issued by companies whose articles of association provide for amortization of their shares prior to the expiry of the company’s term by reason of connection of the company’s activity with enga…

A company may convert some of its shares to certificates of deposit tradable in international markets according to the terms specified by the Regulations. Such certificates shall be issued by an international depository …

The offer of shares and other securities which are offered by public joint stock company for public or private subscription shall be in accordance with the provisions prescribed by law. A closed joint stock company may o…

It is permissible to add a maximum of two percent (2%) to the value of the share to cover the issue expenses. If there is an excess after payment of the issue expenses, such excess shall be transferred to the legal reser…

Founders in the public joint stock company shall not dispose of their shares before the company has published two balance sheets for two (2) consecutive financial years from the date of its registration. The period of re…

The transfer of ownership of a company’s shares shall be effected by entering it in the shareholders register. A company shall not consider the ownership of any share by any shareholder unless his/her ownership is regist…

Annual or interim distribution of dividends shall be effected by a resolution of the ordinary general meeting based on the latest audited financial statements. Part of the net profits may with the approval of the ordinar…

Distribution of dividends among the shareholders shall not be made in the following cases: 1. if as a result of the the distribution the company’s ability to pay its debts and financial liabilities on time will be affect…

No distribution shall be made except from the net profits after deduction of all the necessary costs, and setting aside the depreciations, appropriations and reserves which must be set aside, including any part of the pr…

The board of directors of a company shall in each financial year, set aside ten percent (10%) of the net profits, after deduction of taxes, for establishing a legal reserve until such legal reserve amounts to at least on…

A company may establish optional reserve accounts which shall not exceed twenty percent (20%) of the net profits for each financial year, after deduction of taxes and the legal reserve. The ordinary general meeting may r…

A company shall deposit the dividends which have not been collected by the persons who are entitled to receive them, in the fund established by a decision of the Concerned Body for this purpose, provided that such decisi…

The ownership of the funds deposited in the fund mentioned in Article 134 of this Law shall vest in the Concerned Body after the lapse of fifteen (15) years from the date of the deposit, if such funds have not been colle…

The extraordinary general meeting may resolve to increase the authorized share capital of the company, or its issued share capital if it has no authorized share capital. The board of directors may resolve to increase the…

The issued share capital may be increased by means of making contributions in kind or conversion of the company’s debts to shares.

The extraordinary general meeting may resolve to allot some shares of the increase of the share capital for the employees of the company, within a maximum of five percent (5%) of such shares in accordance with the rules …

The extraordinary general meeting may resolve to allot the shares of the increase of the share capital for the benefit of one or more specific persons, in accordance with the rules specified by the Regulations.

If the shares of increase of the share capital are offered for subscription, each shareholder shall have a preferential right to subscribe for such shares or to waive such right according to the procedure and rules speci…

The extraordinary general meeting may resolve to reduce the issued share capital if it exceeds the needs of the company, provided that such reduction shall not result in reduction of the share capital below the minimum l…

If the company has reduced the share capital pursuant to the provision of the first paragraph of Article 141 of this Law, it must publish the resolution of reduction within seven (7) days at most of the date of its issua…

A company may purchase some of its shares by a resolution of the board of directors in the circumstances and according to the rules prescribed by the Regulations, provided that such purchase shall not result in the reduc…

A company shall not pay the value of purchase of its shares except from the net profits. As an exception to the foregoing, the value of the purchase of shares may be paid from another financial source, provided that it s…

The board of directors of the company shall issue a statement containing the terms of purchase and specification of the financial resources available for payment of the company’s debts and continuation of its activity.

The purchase of shares must be effected within one hundred and eighty (180) days of the date of issuance of the resolution of purchase, failing which the resolution shall be considered null and void. The resolution of pu…

The board of directors of a company shall take all actions which secure the preservation of the company’s share capital. If the company loses twenty five percent (25%) of its share capital, the board must take the necess…

If a company commits any act which is detrimental to the interests of its shareholders, or the parties dealing with the company, or its creditors, or if any danger occurs which threatens the stability of the Capital Mark…

A company may in consideration of the amounts borrowed by it, issue tradable securities or bonds pursuant to the provisions of the Capital Market Law and the rules specified by the Regulations. The articles of associatio…

A company shall observe the provisions relating to the increase of share capital when it issues securities or bonds which will automatically be converted to shares on the due date of their maturity or are capable of conv…

If the terms of issue include capability of conversion of the securities or bonds to shares, they shall not be converted before the lapse of at least two (2) years of the date of their issuance and the holders of the sec…

Securities or bonds shall be of nominal value, and their value must be fully paid at the time of subscription therefor. All securities or bonds of each issue must also be of the same value, entitlement and duration.

A security or bond shall not be divisible nor shall it be owned jointly by more than one person except in the case of inheritance, provided that the heirs shall be represented by one representative who is selected from a…

A general meeting of holders of securities or bondholders of each issue shall be constituted by virtue of law, whose objective shall be the protection of their joint interests. The Regulations shall specify the functions…

A company shall not change the terms of the issue or the inherent rights of securities or bonds except with the approval of the general meeting of the holders of securities or bondholders. The subscribers shall be entitl…

All securities or bonds of each issue shall enjoy equal and inherent rights in accordance with the provisions of the articles of association of the company and the content of the resolution of the general meeting or the …

The board of directors of a company shall register the issue with Muscat Securities Market within fifteen (15) days of the date of completion of subscription. The company shall keep a register of holders of securities or…

The meeting of the general meeting of holders of securities or bondholders shall not be valid unless such general meeting is attended, in person or by proxy, by a number of holders of securities or bondholders representi…

The general meeting of holders of securities or bondholders shall have a representative to be appointed by the company issuing the securities or bonds in accordance with the rules issued by a decision of the Concerned Bo…

The ordinary and extraordinary general meetings, the board of directors and the Executive Management, each within the scope of its authority shall have the right to perform the acts or to take the legal actions related t…

A company shall be bound by any act or action performed by the ordinary or extraordinary general meetings, the board of directors or any of its committees, or the Executive Management during the course of their performan…

A bona fide third party may claim the validity of the act or action against the company even if it exceeds the authority of the person who preformed it or the procedures prescribed by law have not been followed with resp…

A person who deals with the company shall not be obliged to get acquainted with the authorities of the persons with whom he/she deals or to enquire whether the act or action is permissible under the regulations of the co…

The general meeting may resolve all matters which are not within the functions of the board of directors according to the provisions of this Law and the company’s articles of association. The general meeting shall be con…

The board of directors of the company shall prepare the agenda of the general meeting and shall include in the agenda any proposal submitted by representatives of more than five percent (5%) of the share capital, provide…

The general meeting shall not consider any matters other than those listed in the agenda. However, the general meeting may consider any urgent matters which arise during the meeting subject to a resolution adopted by sim…

The invitation for convening the general meeting shall not be valid unless it contains the agenda. The notice to convene the general meeting must, after approval thereof by the Concerned Body, be published pursuant to th…

Any shareholder shall have the right to attend the general meetings in person or by proxy and shall have one vote for each share owned by him/her. A proxy must be made in writing, failing which it will not be valid. A pr…

A member of the board of directors shall not represent a shareholder, or else the proxy will not be valid. All the members of the board of directors shall attend the general meetings, and the general meeting may censure …

Shareholders who represent all the shares of the share capital may convene a general meeting for considering any of the matters in respect of which the adoption of resolutions is within the authority of the general meeti…

The chairman of the board of directors shall preside over the general meetings, and if his/her attendance is not possible, the meetings shall be presided over by his/her deputy, and if the attendance of both of them is n…

The annual ordinary general meeting shall be convened within ninety (90) days of the end of the financial year of the company. The functions of the annual general meeting shall particularly include the following: 1. stud…

Convening of the ordinary general meeting shall not be valid unless it is attended in person or by proxy, representatives of at least half of the shares of the share capital. The proxy must be in writing, otherwise it wi…

The Concerned Body may, upon request of shareholders who own a percentage of at least five percent (5%) of the shares of the company, issue a decision for suspension of the resolutions adopted by the general meeting of t…

The company shall enable the shareholders, the holders of the securities and the bondholders, to peruse the financial statements and the reports of the board of directors and the auditor, related to the past year at leas…

The extraordinary general meeting shall have the following functions: 1. amending the articles of association of the company. The amendment to the articles of association shall not be effective, unless it is approved by …

A meeting of the extraordinary general meeting shall not be valid, unless it is attended in person or by proxy, by representatives of at least seventy five percent (75%) of the shares of the share capital. A proxy must b…

If any of the shareholders or of their representatives withdraw from the meeting of the ordinary general meeting or the extraordinary general meeting, after the declaration of presence of the quorum for convening thereof…

The management of the company shall be entrusted to a board of directors, the number of whose members shall be specified by the articles of association, provided that it shall be comprised of an uneven number. The number…

The members of the board of directors shall be elected from among the shareholders or from others, by way of a direct secret ballot, by the ordinary general meeting. The Regulations shall specify the rules, procedures an…

Each shareholder shall have a number of votes equal to the number of shares owned by him/her. He may distribute the votes he / she has among more than one nominee, and a single vote shall not be given to more than one no…

Immediately after its election, the board of directors shall elect from its members a chairman and a deputy thereof, and appoint a secretary for the board, provided that the board shall file with the Registrar a copy of …

Subject to the limits provided for in this Law and the articles of association of the company, the board of directors shall have full authority necessary for management of the affairs of the company, and the board shall …

The board of directors may, for the sake of management of the affairs of the company take the necessary actions for achievement of its objectives and particularly the following: 1. approve the commercial and financial po…

The board of directors shall be prohibited from performing the following acts unless it is expressly authorized to do so by the articles of association of the company or by a resolution of the ordinary general meeting: 1…

The chairman of the board of directors is the representative of the company before third parties and before the courts. He/she shall implement the resolutions of the board and he/she may delegate some of his/her function…

The membership of any person who is elected in violation of the provisions regulating the membership of the board of directors, shall be invalid from the date of his/her election. Such person shall be liable for any dama…

The membership shall cease to be valid by virtue of law, if a member of the board of directors loses any of the conditions required for membership. A member shall promptly inform the board of the loss of such condition a…

The board of directors shall, upon the request of its chairman, convene at least (4) four meetings each year provided that the period between any two meetings shall not exceed one hundred and twenty (120) days, and the c…

The chairman of the board of directors shall convene the board upon request of one or more members. If the chairman fails to do so within three (3) working days at most, the board shall be convened pursuant to a notice s…

The board of directors may, by unanimous agreement of the members, convene its meetings through the use of appropriate means of communication which facilitate simultaneous verbal and visual communication between the memb…

Convening of the board of directors shall not be valid unless the meeting is attended by two thirds of the members or their representatives. Resolutions shall be adopted by a simple majority unless the articles of associ…

The board of directors may, in the circumstances and subject to the rules specified by the Regulations, adopt any of its resolutions by way of minutes by circulation. In such a case, the secretary of the board shall reco…

The secretary of the board of directors shall prepare the minutes of the meetings, which shall be signed by the members who attended the meeting, and the secretary. A member who does not agree to a resolution adopted by …

A member of the board of directors may appoint in writing another member to represent him/her in attending one or more meetings of the board; however, a member shall not represent more than one member, or appoint another…

The company shall form an audit committee from among the members of the board of directors and appoint a legal consultant and an internal auditor in accordance with the conditions and the rules specified by the Regulatio…

The general meeting shall determine the remuneration and the sitting fees of the members of the board of directors in accordance with the rules set forth in the Regulations. The company shall disclose the privileges obta…

The ordinary general meeting may resolve to remove all or some of the members of the board of directors, regardless of any provision set forth in the articles of association of the company to the contrary and the removal…

Subject to the provisions of Article 198 of this Law, the ordinary general meeting which resolved the removal of a director, shall in the same meeting elect a new board of directors or the replacement of the removed memb…

A member may resign from membership of the board of directors by a written notice addressed to the chairman of the board. If the resignation is made by the chairman of the board, the notice shall be addressed to the secr…