Question

Write an essay describing about the different forms(types) of commercial companies(businesses) in Oman as per Oman commercial companies(in 3 pages). You can refer to Oman commercial Companies Law, to answer this question (Link is provided in Moodle under chapter-5).

Answer 1

The features are explained as bullet points in a tabular column which can be later elaborated as per your wish.

The commercial company incorporation in Oman is completely governed by the Commercial Companies Law, Commercial register law and the Foreign Capital Investment Law. Business structure, objectives of the parties involved will be depending upon the capital and the type of business. The most common types of commercial companies which is used in Oman are:

Limited liability company (LLC),

Joint stock company (closed) (SAOC),

Joint stock company (public) (SAOG),

Joint venture (JV)

General partnership.

These are explained as follows,

S. No	LLC	SAOC	SAOG	Joint Ventures	General Partnerships
Name of the company
1.1	LLC should follow the name of the company	SAOC must follow the name of the company	SAOG must follow the name of the company	Doesn’t have a name of its own, beacuse it is an agreement between 2 people	General partnership should follow the name of the company
1.2	May include the name of one or more partners	The name cannot include the name of a natural person unless registered as a patent	Any name other than the natural name of a natural person	Since there is no juristic personality, they doesn’t subject to any government registration authority	May include the name of one or more partners
Share Holders
2.1	Can have a minimum of 2 partners	Can have a minimum of 3 partners	Can have a minimum of 3 partners	Can have minimum of 2 partners	Formed by 2 or more legal persons
Capital required
3.1	A minimum Capital of 20,000 OMR for wholly owned Omani Companies	Minimum of 500,000	Minimum of 2,000,000	N/A	N/A
3.2	In case of foreign investment minimum capital of OMR 150,000 or minimum capital of OMR 20,000 for foreign investment applicable under US-Oman Free Trade Agreement	N/A	N/A	N/A	N/A
3.3	No Authorized Capital	Authorized capital can be more than issued capital	Authorized capital can be more than issued capital	N/A	N/A
3.4	The company capital of the company could be increased or reduced only by a unanimous decision by the partners	Half of issued capital should be paid on subscription	Half of issued capital should be paid on subscription	N/A	N/A
3.5	No public share subscription	No public share subscription	No public share subscription	N/A	N/A
Shares of the company
4.1	Nominal value for single class of shares	Different classes of shares and preferential rights permissible	Promoters can subscribe not less than 30% or more than 60% of the company’s shares and can offer the remaining to the public.	N/A	Partner’s share not represented by negotiable certificates
4.2	Shares cannot be mortgaged	Share to be owned by only a single person	Share to be owned by only a single person	N/A	N/A
4.3	Assignment of shares are subjected to the preemptive rights exercisable by other shareholders	Shareholders could be confined to pay the value of the shares	Voting rights permissible to the share holders	N/A	N/A
4.4	Each partner has the right to attend partners’ meeting and also to vote for each one of the share he owns	Preferential and the concessionary shares can be included in the Articles Association of the company.	Shares offered to the public subscriptions are required to be subscribed fully.	N/A	The partner share's owner can be transferred only to a third party with the consent of all other partners
Constitutional documents
5.1	Constitutive Contract	Constitutive Contract should be approved by the Directorate General of MOC (Ministry of commerce)	Constitutive Contract and Articles of Association (must be) approved by the Directorate General of MOC	JV Agreement	Partnership memorandum
Rights & Obligations
6.1	Right to the dividends and also the obligation to bear losses related to the share in issued capital	Right to the dividends and also the obligation to bear losses related to the share in issued capital	Right to the dividends and also the obligation to bear losses related to the share in issued capital	Can govern the rights and also the partners obligation;	Right to receive profits
6.2	Purchase rights to Pre-emption of new shares	Preferential right to the subscription of new shares	Preferential right to the subscription of new shares	Can also govern profit/loss distribution.	The partners shall be jointly and severally liable for obligations whereas non partners are responsible for any third party if their name is included
Decision Making
7.1	Managed by one or more managers whose appointment and tenure is determined by the Constitutive Contract	The management of the company shall be entrusted to a board of directors	The management of the company shall be entrusted to a board of directors	Management of affairs of JV to be governed by JV Agreement	The management to be by one or more managers who shall be natural persons and who may be partners or non-partners
7.2	A partner can be a manager	Members of the board of directors should be a minimum of three and maximum of twelve directors	Minimum of five and maximum of twelve directors	N/A	Managers may be appointed by one or more partners
7.3	The managers can not perform certain things without the authorization of the partners	Director’s term of office is to be determined by applicable law or general meeting to elect the members of the board of directors	Director’s term of office is to be determined by applicable law or general meeting to elect the members of the board of directors	N/A	A manager of the partnership has all the authority to perform acts in all the business affairs
7.4	Appointment and removal of the managers are done by the partner decision meeting.	The general meeting body is empowered to remove any or even all the members of the board	The general meeting body is empowered to remove any or even all the members of the board	N/A	Removal of managers is achieved by all the partner's unanimous decision
7.5	The partners would act by way of resolutions which is adopted by partner’s voting at the meetings	The company is only bound by the acts of the chairman and the board of directors, within the scope of their authority	The company is only bound by the acts of the chairman and the board of directors, within the scope of their authority	N/A	Bound by the manager's acts within the scope of their authority
Auditing
8.1	Auditor can be appointed when, there are more than 10 partners and share capital exceeds 50,000 OMR	Appointment of a dedicated auditor is mandatory who would be appointed by the general meeting	Appointment of a dedicated auditor is mandatory who would be appointed by the general meeting	N/A	N/A
Liquidation
9.1	Can be dissolved for the reasons mentioned in the constitutional document or the Omani Law	Can be dissolved for the reasons mentioned in the article of association or the Omani Law	Can be dissolved for the reasons mentioned in the article of association or the Omani Law	Not justice, so no reasons for liquidation	Can be dissolved for the reasons mentioned in the partnership memorandum or the Omani Law
9.2	May be dissolved at any time favorable to vote of partners who is at least representing the company for 3 quarters capital	May be dissolved at any time favorable to general who is at least representing the company for 3 quarters capital	May be dissolved at any time favorable to vote of partners who is at least representing the company for 3 quarters capital	N/A	Only the competent court upon the request of one of the partners to decide the partnership dissolution.

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