Commercial Companies Law — articles 201–262

If for any reason a seat of a member of the board of directors falls vacant during the period between two ordinary general meetings, the board may, unless the articles of association of the company provides otherwise, ta…

Any member of the board of directors or of the Executive Management shall not take advantage of his/her post for obtaining benefits to himself/herself or to any other person, and anyone who violates this obligation shall…

A member of the board of directors of the company shall not participate in the management of any other company which carries out similar businesses. The members of the board of directors and the Executive Management of t…

A member of the board of directors or any related parties to the company shall not have any direct or indirect interest in the transactions or contracts entered into by the company or for the company’s benefit. As an exc…

A member of the board of directors and the Executive Management must notify the company in writing of the interests he/she has with the company and the securities held by him/her therein, within five (5) days at most fro…

The members of the board of directors shall be jointly liable to the company, the shareholders and third parties for the damage resulting from their acts in violation of the law, or acts which are beyond the scope of the…

If one or more shareholders who own at least five percent (5%) of the company’s shares, are of the opinion that the management of the company’s affairs has been performed, or is being performed in a manner which is detri…

The board of directors or the ordinary general meeting, may adopt a resolution to institute legal proceedings against any member of the board of directors who is considered responsible for the damage sustained by the com…

A company shall keep financial records showing its transactions and financial status, provided that the financial statements shall be prepared according to international financial reporting standards, and shall be audite…

The financial statements shall include the budget, profit and loss account, a statement of the cash flow, the changes in the property rights and explanations accompanying the aforementioned. A company shall, at the end o…

The articles of association of a company shall specify the beginning and end of the financial year. However, if a company is established during the first half of the calendar year, its financial year shall end by the end…

A company shall put the financial records at the disposal of the auditor to the extent that enables him/her to perform his/her duties in accordance with the law. A shareholder may peruse such records after submission of …

A company must keep its financial records for a period of ten (10) years commencing from the end of the financial year, and the Regulations shall specify the method of keeping such records.

The board of directors of a company shall, within sixty (60) days of the end of the financial year, prepare a report on the position of the company and its performance. Such report shall particularly contain the financia…

The auditor shall prepare a report according to international financial reporting standards, showing the actual financial position of the company. Such report shall include, in addition to the data specified by the Regul…

The financial statements and the reports provided for in the preceding Articles of this Section, shall be submitted to the annual ordinary general meeting, and a copy of such financial statements and reports shall be sen…

The board of directors shall send to each shareholder and anyone who is entitled to attend the annual ordinary general meeting, along with the invitation for attendance, a summary of the audited financial statements, and…

If it appears to the board of directors prior to the convening of the annual general meeting that there are errors in the financial statements, it shall correct such errors and send a notice thereof to the shareholders a…

A company shall have one or more auditors from among those who are licensed to practice the profession of audit and accounting approved by the Concerned Body. The appointment of the auditor and determination of his/her f…

The Regulations shall specify the conditions and rules of appointment of auditors, their qualifications, rights and duties and the benefits they may obtain from the company in any capacity.

In all circumstances, the Concerned Body may object to any of the auditors appointed by the general meeting, by a reasoned decision, within fifteen (15) days of the date of the minutes of the annual ordinary general meet…

A company may remove the auditor by a resolution adopted by the ordinary general meeting and the general meeting must appoint another auditor in the same meeting. The Regulations shall set forth the provisions of termina…

The auditor shall not be a founder, a member of the board of directors or of the Executive Management, or from the employees of the company or its subsidiary companies. The auditor shall not provide to the company or its…

The company’s auditor shall assume his/her professional and technical duties and preserve the confidentiality of the company’s secrets. In all circumstances, the auditor shall be liable to the company, the shareholders a…

The auditor shall examine the company’s books and ascertain that they are prepared according to international financial reporting standards and the financial data correspond with such books. The auditor shall have the ri…

When the auditor is preparing the reports entrusted to him/her, he/she shall observe all the changes occurring in international financial reporting standards which must be followed in the preparation of the financial sta…

A holding company is a joint stock company exercising financial and administrative control over one or more joint stock or limited liability companies, which become its subsidiaries through the holding of at least fifty …

The objects of the holding company shall be as follows: 1. manage its subsidiary companies or to participate in the management of the other companies in which it is a shareholder. 2. participate in the establishment of j…

A holding company shall be established by either of the following methods: 1. establishing a joint stock company whose objectives shall be determined by one or more of the objectives provided for in Article 228 of this L…

A holding company shall adopt a commercial name, provided that the expression “holding company” shall be added beside such name. The issued share capital of the holding company shall not be less than two million (2,000,0…

A subsidiary company is a joint stock company or a limited liability company, which is subject to the control of another company that owns at least fifty one percent (51%) of its shares. Each of the holding company and i…

A subsidiary company of any of the holding companies, shall not hold shares in such holding companies. If the subsidiary company has held shares therein prior to the date on which its position as a subsidiary has been es…

The board of directors of a holding company may invite the chairman of the board of directors of any of its subsidiary companies to attend the meetings of the board of directors of the holding company, when considering m…

A limited liability company shall consist of natural or juristic persons whose number shall not be less than two (2) and not more than fifty (50) persons, and their liability for the company’s debts shall be limited to t…

Subject to the provision of Article 256 of this Law, if the number of the shareholders at any time after the establishment, exceeds the maximum number prescribed in Article 234 of this Law, the Ministry shall give a noti…

The name of a limited liability company may consist of the name of one or more shareholders, or any word or expression, provided that the name shall not be misleading as to its objectives, its identity or the identity of…

The shares of shareholders in the share capital of a limited liability company shall not be tradable and the company shall not resort to subscription for raising or increasing its share capital.

A limited liability company shall be established with a share capital specified in its Constitutive Documents and shall be divided into shares of equal nominal value.

Contributions to the share capital of a limited liability company may be made in cash or in kind, but they shall not consist of services or labour. The one-person company established for the purpose of issuing bonds or s…

A limited liability company shall be established under a contract signed by all shareholders and it must contain the data specified by the Ministry, particularly the following: 1. the name of the company and the principa…

An account for a company (under establishment) shall be opened with a bank licensed to operate in the Sultanate in which the value of the shares subscribed for by shareholders shall be deposited, provided that each share…

If one or more shareholders offer contributions in kind, the shareholder shall specify its kind, place and value in a report prepared by a valuation office or an auditor licensed to practice in the Sultanate. The Ministr…

If the company is not registered with the Registrar within a period of one hundred and eighty (180) days from the date of depositing the first contributions therein, any one of the shareholders who have deposited their c…

Shares in a limited liability company shall not be divisible, but a share may be owned by more than one person, provided that the several owners shall be represented by one person to be chosen from among them, who will b…

Joint owners of a share shall be jointly liable for any obligations arising from such ownership and shall be deemed to be one person, when the number of the shareholders in the company is determined.

Shareholders or the manager appointed by them under the Constitutive Documents, as the case may be, shall within a maximum period of thirty (30) days of the date of completion of the procedures of establishment of the co…

A company shall prepare a register of its shareholders in which the name of each shareholder, his/her nationality, his/her domicile of choice and his/her address, his/her age and the number of shares owned by him/her and…

Subject to the restrictions prescribed by law or the provisions set forth in the Constitutive Documents, each shareholder of the company shall be entitled to dispose of his/her shares whether for a consideration or not, …

If any shareholder intends to dispose of all or some of his/her shares to a person who is not a shareholder, he/she shall send a written notice to the manager of the company, together with a number of copies equal to the…

The manager of the company shall promptly confirm to the shareholder who intends to dispose of his/her shares, the receipt of the notice and the date of such receipt, and shall promptly send a copy thereof to each shareh…

Any shareholder who intends to purchase, shall inform the manager of the company who sent the notice to him/her, in writing of his/her intention to purchase the offered shares or any number thereof, with all the terms se…

If notices of intent to purchase the shares are received from more than one shareholder, during the period specified in Article 251 of this Law, which are compliant with the terms and the total number of the shares inten…

If no notice of intent to purchase the shares which is compliant with the terms is received from any shareholder, or if the notices received are compliant with the terms, but they are in total less than the number of the…

Shares purchased in the name of the company pursuant to Article 253 of this Law shall be jointly owned by all the shareholders in proportion to the number of shares owned by each of them. Such shares shall not be counted…

If the shareholders or the company have decided to purchase the offered shares, the manager of the company shall send a written notice to the selling shareholder of the intention to purchase and to exercise the pre-empti…

The pre-emptive right shall not apply to the purchase of shares which are transferred by inheritance or will. If the shares are transferred by inheritance or will to more than one person and such transfer results in the …

Increase or reduction of the share capital of a limited liability company shall be effected by a unanimous resolution adopted by the shareholders’ meeting.

Upon the increase of the share capital, each shareholder shall be entitled to subscribe for a number of the new shares proportionate to the number of shares owned by him/her. If a shareholder subscribes for less than the…

The amounts of the increase of the share capital shall be deposited in one of the banks that are licensed to operate in the Sultanate and shall not be withdrawn until the price of the shares is fully paid and the increas…

If the increase of share capital is effected by contributions in kind, such contributions shall be evaluated in accordance with the provisions of Article 242 of this Law.

Subject to the provision of Article 238 of this Law, the share capital of a company may be reduced if it exceeds the company’s needs or if the company has incurred any losses.

The resolution of reduction of the company’s share capital shall be published in accordance with the provisions of this Law, accompanied by a notice inviting all the creditors to submit their objections within a period o…