15 May 2019
OMAN: New Company Registration Law Enacted
Oman’s new Commercial Companies Law comes into effect in April, bringing all matters related to listed companies (other than registrations) under Capital Market Authority jurisdiction. Companies governed by the old law, enacted in 1974, must now comply with the new legislation within one year. The main point of the new law include:
- A holding company must take the form of a joint-stock company, rather than having the option of being limited liability. Current limited liability companies must convert to a joint-stock company.
- The minimum share capital requirement is unchanged at OMR2 million (US$5.2 million) for public joint-stock companies and at OMR500,000 (US$1.3 million) for private joint-stock companies.
- The previous option, available to both public and closed joint-stock companies, to pay half the nominal value of issued shares on subscription, provided that the remainder is paid within three years of incorporation, is not provided for in the new law.
- Closed joint-stock companies may now offer securities – other than shares – for public subscription.
- A new article was introduced that aims to provide a more sound legal basis for establishing accounting and law firms.
- The new law also contains added restrictions on shareholders and boards of directors. For example, board meetings must now have at least two-thirds of members present to allow decisions to be made. Shareholders holding more than 5% of company stock are no longer allowed to act as proxies for other shareholders in general meetings.
- The new law does not alter existing rules regarding the payment of net profits by companies to shareholders as dividends.