01
Legal issue
A holding company and its subsidiary have separate legal personalities; control alone does not make the holding company liable for the subsidiary's debts.
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Published principle
The Arabic text published by the Supreme Court is the primary source. The English translation was published by the Technical Bureau; Russian and Chinese are unofficial Smart Global Capital editorial translations.
This is a published legal principle—an extract selected by the Supreme Court of Oman Technical Bureau—not the full text of the judgment.
Pursuant to Article 231 of the Commercial Companies Law, both a holding company and its subsidiaries shall possess separate and independent legal personalities. The holding company shall bear no liability for the debts of its subsidiary, signifying that the subsidiary’s legal personality remains distinct and autonomous from that of the holding company. Consequently, the operational activities of the respondent company are separate and distinct from those of the holding company, as the latter is not liable for the debts of the subsidiary, as expressly provided in the aforementioned Article.
03
Applicability
This is a general separate-personality principle. Guarantees, commingling, abuse of corporate form, sham arrangements, special liability grounds and the current Commercial Companies Law must be assessed separately.
04
Related instruments
- Commercial Companies Law, Article 231
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