The limited liability company is the most common vehicle for doing business in Oman. It separates the partners’ assets from the company’s and is governed by the Commercial Companies Law issued by Royal Decree 18/2019. Said Ibrahim Ambusaidi Advocates (SIA), a law firm in Muscat, explains the formation steps and the obligations founders most often overlook.

How is the company formed and registered?

The company rests on its constitutive documents (the memorandum and constitutive contract), which set its name, objects, capital, the partners’ shares and the management structure. Article 246 of the Commercial Companies Law requires an application for registration to be filed with the Registrar, together with the original constitutive documents and the papers specified in the regulations, within thirty days of completing the incorporation procedures, and any later amendment to those documents must also be registered. In practice registration runs through the systems of the Ministry of Commerce, Industry and Investment Promotion, along with the commercial registration and any activity-specific licences.

Do not drag your feet: Article 234 allows any partner who has paid in a share to treat the constitutive documents as cancelled and recover what was paid if the company is not registered within one hundred and eighty days of the first capital contribution.

What is the partners register and why does it matter?

Article 247 obliges the company to keep a register of partners recording each partner’s name, nationality, residence, the number and value of the shares held, and every legal dealing in those shares. Ownership of a share cannot be invoked unless it is recorded in this register. The company’s manager is responsible for the register and the accuracy of its entries, and the partners and any interested party may inspect it. Neglecting this register invites disputes over share ownership, among the most common conflicts in family companies.

Can a company be formed by one person?

Yes. Article 291 of the Commercial Companies Law permits the one-person company, a limited liability company whose entire capital is owned by a single natural or juristic person. The law attaches restrictions, including that a natural person may not incorporate more than one one-person company. The owner’s liability remains limited to the capital allocated to the company, provided the separation between personal and company assets is respected.

Which post-formation obligations do founders overlook?

After registration the continuing obligations begin: appointing one or more managers by resolution of the partners assembly under Article 263; registering any restriction of the managers’ powers with the Registrar so that it binds third parties under Article 264; holding the partners assembly at least once a year within one hundred and eighty days of the financial year end under Article 281; and making the financial documents available to partners ahead of the assembly. Transfers of shares to non-partners are subject to the existing partners’ pre-emption rights under Articles 249 and following, so the constitutive documents should regulate that mechanism deliberately.

Key facts

The LLC in Oman is governed by the Commercial Companies Law issued by Royal Decree 18/2019.
The registration application must be filed within thirty days of completing incorporation procedures, under Article 246.
If the company is not registered within 180 days of the first capital contribution, a partner may treat the constitutive documents as cancelled and recover the contribution, under Article 234.
Share ownership is only invocable once recorded in the partners register kept by the manager, under Article 247.
The one-person company is permitted under Article 291; a natural person may incorporate only one.
The partners assembly must meet at least annually within 180 days of the financial year end, under Article 281.

When to involve a lawyer

Involve a lawyer when drafting the constitutive documents and allocating shares and management rights, when designing the share-transfer and pre-emption mechanism, when buying into an existing company whose registers and liabilities need checking first, and when an early disagreement between founders is better settled in the documents than in court.

At Said Ibrahim Ambusaidi Advocates we draft constitutive documents and shareholders agreements, handle registration, and represent companies and partners in their disputes before the courts across Oman. The first consultation is free by phone or WhatsApp on +968 9706 3030. We are based in Al Khoudh, Seeb, Muscat, and work Sunday to Thursday, 9:00 to 13:00 and 14:00 to 17:00, in Arabic and English.

This article is general legal information, not legal advice.

Setting Up a Limited Liability Company in Oman: Procedure and Obligations