Corporate Compliance in Oman: A Legal Guide to the Limited Liability Company After Incorporation (2026)

Oman's Commercial Companies Law, issued by Royal Decree No. 18 of 2019, puts continuing duties on a company after it is registered. This guide covers the limited liability company (LLC), the form most foreign and local investors use. It explains who can be a partner, how capital and shares work, what managers can and cannot do, and the yearly cycle of accounts, reserve, audit and partner meetings. We assist clients with Oman through our partners there.

Note on sources: the article texts below were checked against the Arabic Official Gazette text published by Oman's Ministry of Justice and Legal Affairs. This guide covers the Law's cited provisions, not a review of its executive regulations (Ministerial Decision No. 146 of 2021). Confirm the current rules and procedures before relying on them for your company.

The seven forms and why the form matters (Article 4)

Article 4 requires commercial companies to take one of seven forms: general partnership, limited partnership, joint venture, joint stock company (public or closed), holding company, limited liability company, or one-person company. Duties differ by form. The reserve, audit and disclosure rules in this guide are the LLC rules in Articles 234 to 278. Joint stock companies follow a different set of articles in the same Law.

Who can be a partner (Articles 234 and 235)

An LLC has at least two and at most fifty partners, who may be natural or legal persons. Their liability for the company's obligations stops at their share of the capital. Capital is divided into equal-value shares that are fully paid at registration. By decision of the Minister, in the public interest, the maximum number of partners may be raised for some companies. Companies that the State founds alone are excluded (Article 234).

If the number of partners goes above the maximum after incorporation, the Ministry must warn the company to fix this within 180 days of the warning. A company that does not comply is treated as dissolved, and its partners are personally and jointly liable for the obligations that arose from the excess from the date it happened (Article 235). This is subject to Article 256 on inheritance, below.

Name (Article 236)

The name may consist of the name of one or more partners, or any word or phrase, as long as it does not mislead about the company's purpose, identity or partners. It must always be followed by "limited liability company" or the abbreviation (ش.م.م). If a breach of this rule leads a good-faith third party into a mistake about the limits of the partners' liability, the person who committed the breach is liable with his own funds for the damage.

Capital and shares (Articles 237 to 245)

• No trading and no subscription. Shares in an LLC cannot be traded, and the company may not resort to subscription to raise or increase its capital (Article 237).
• Capital and nominal value. Capital is set in the constitutive documents and divided into shares of a single nominal value (Article 238).
• What a partner can contribute. Shares are cash or in kind. They cannot be services or work. A one-person company set up to issue sukuk or bonds on behalf of a joint stock company is excepted, under the procedures and rules in the regulations (Article 239).
• The contract. All partners sign the founding contract. It must carry the details the Ministry sets, and at least: the company name and main place of business; the capital and the cash or in-kind shares with their value; the partners' names, nationalities, addresses and share amounts; the purpose; the date of incorporation and its term; the manager's name, personal details and powers; the start and end of the financial year and the date of the first financial year; the bodies that resolve disputes between partners; and the voting percentage for partners' meeting resolutions at each meeting held, except where the Law fixes one (Article 240).
• Bank account. A company in formation opens an account at a bank licensed in Oman, and each partner deposits the full value of his shares in cash. The bank may not release the deposit unless the partners present a certificate of registration, or decide to abandon incorporation (Article 241).
• In-kind shares. The partner states the type, place and value of the asset in a report prepared by a valuation office or a licensed auditor. The Ministry may value it itself or send it to experts. If the valuation is wrong, the contributor, the valuer and the auditor are liable to the Ministry and third parties. If the asset was valued above its true value, the contributor pays the difference in cash from his own funds (Article 242).
• Deadline to register. If the company is not registered within 180 days from the deposit of the first shares, any partner who deposited may treat the constitutive documents as cancelled by written notice to the other partners and the bank, and may recover the deposited value (Article 243).
• Joint ownership of a share. A share cannot be divided, but several persons may own it if they choose one representative, whose name goes in the register. After the deadline the company sets, it may sell the share for the owners' account, and partners have priority to buy. Dealing with a jointly owned share needs an official document (Article 244). The co-owners are jointly liable, and count as one person for the maximum number of partners (Article 245).

Registration, the partners' register and share transfers (Articles 246 to 256)

The partners, or the manager named in the constitutive documents, must apply to the registrar within 30 days of finishing the incorporation steps, with the originals and copies of the documents and anything else the regulations require. Amendments to the constitutive documents must be registered the same way and within the same 30 days from the date of the amendment (Article 246).

The company must keep a register of partners that records each partner's name, nationality, chosen residence and address, age, the number and value of his shares and every legal act on those shares. A partner's ownership counts only if it is entered in the register. The managers are jointly liable for the register and the accuracy of its entries, and partners and anyone with an interest may inspect it (Article 247).

A partner may transfer his shares, for payment or free, to another partner or a third party, by an official document, subject to legal limits and the constitutive documents. The transfer takes effect against the company and third parties only from its registration and publication, and may never push the number of partners above the maximum (Article 248). Priority rights to buy do not apply to shares that pass by inheritance or will. If inheritance takes the number of partners above fifty, the Minister's approval is needed. Without it, the heirs' shares are treated as jointly owned unless they agree to move the shares to enough of them to stay within the limit (Article 256).

Sale to an outsider and pre-emption. A partner who wants to sell all or some of his shares to someone who is not a partner must send the manager a written notice, with one copy for each partner. The notice states the number of shares, the buyer's name, nationality and address, and the terms (Article 249). The manager confirms receipt at once, sends a copy to each partner at the address in the register, and tells each of them in writing that they may buy the shares first on the same terms (Article 250). A partner who wants to buy must tell the manager in writing and deposit the full price within 45 days of the date the manager was told of the planned sale. If no partner does so, the seller may sell to the buyer named in the notice (Article 251). If several partners ask to buy and together want more shares than are offered, the shares are shared out in proportion to each partner's holding. A partner who asked for fewer than his share gets what he asked for, and the rest is divided among the others the same way (Article 252).

If no valid notice arrives, or the notices cover fewer shares than were offered, the manager may buy the shares for the company on the terms of the notice, unless the constitutive documents or a partners' decision forbid it. The price may not be paid out of the capital or the legal reserve (Article 253). Shares bought this way belong jointly to all partners in proportion to their holdings. They do not count for quorum or votes, or in sharing dividends or assets, and the proceeds of any later sale go to the company and into its reserve (Article 254). If the partners or the company decide to buy, the manager sends the seller a written notice of the purchase, with the price set in his notice. If the seller does not receive that notice and the price within 50 days of being notified by the manager, he is free to sell, but must complete the sale within the next 30 days and on the terms in his notice (Article 255).

Changing the capital (Articles 257 to 262)

An increase or decrease in the capital needs a decision of the partners' meeting passed unanimously (Article 257). On an increase, each partner may subscribe for new shares in proportion to the shares he holds. If a partner takes less than his share, the other partners may subscribe for the rest in proportion to their holdings (Article 258). If an increase is made in kind, the assets are valued under the Article 242 rules (Article 260). The capital may be reduced if it exceeds the company's needs or if the company has made losses, subject to Article 238 (Article 261). A decision to reduce the capital must be published with a call to all creditors to object within 30 days of publication. It takes effect only after that period ends without objection, or once the objecting creditors have given a discharge, either because their debts were paid or because they were given suitable security (Article 262).

Managers: appointment, powers and limits (Articles 263 to 273)

• Appointment. One or more managers, who may be partners or other natural persons, run the company. They are appointed for a fixed or open period by the constitutive documents or by a partners' decision (Article 263).
• Powers. Managers may do everything needed for the company's purposes, unless the constitutive documents say otherwise. A company decision that limits the managers' powers or changes the managers must be registered and published, and binds third parties only from its registration (Article 264). A good-faith third party may assume that any act a manager does in the course of business is within his authority, unless the limit on authority was registered (Article 268).
• Liability. Managers are subject to the same liability rules as board members of a joint stock company, and any clause that says otherwise is void (Article 265). They are liable, individually or jointly as the case may be, to the company and third parties for breaches of the Law and the constitutive documents and for management errors. Where several managers took part, the court sets each one's share of the damages (Article 269).
• Conflicts. Managers must tell the partners' meeting about any conflict between their interest and the company's in a planned transaction (Article 266).
• Acts that need express permission. Managers may not do the following unless the constitutive documents expressly allow it or all partners decide unanimously: give donations (except small, ordinary ones the business needs); sell all or an important part of the company's assets; mortgage or pledge its assets except to secure debts from its ordinary business; guarantee third-party debts, except ordinary-course guarantees that serve the company's purposes; or release the company's debtors, settle with them or agree to arbitration with them (Article 267).
• Partner's rights against managers. A partner who is not a manager may ask at any time for information about the company and inspect its books, records, accounts and other papers himself or through an expert. Partners, or any one of them, may sue the managers for the company's benefit and claim full compensation, and any clause against this right is void (Article 270).
• Removal. The partners' meeting may remove managers by a decision of a majority of partners holding three quarters of the capital, and the decision must appoint replacements. A partner who is a manager does not vote on his own removal. One or more partners may also ask the court to remove a manager. The removal decision is published as the Law requires (Article 273).

The yearly cycle (Articles 274 to 278)

1. Legal reserve (Article 274). The manager or managers set aside 10% of the company's net profit for each financial year, after tax, as a legal reserve until it reaches one third of the capital. The reserve cannot be paid to partners as dividends, but may cover accumulated losses. They may also set aside up to 20% of annual net profit for an optional reserve.
2. Financial statements (Article 275). Within 90 days of the end of each financial year, the managers prepare the financial statements and a report on the company's activity, financial position and their proposals on distributing profit, and put them at the auditor's disposal, if there is one. The auditor prepares a report, submits it to the partners' meeting and gives a copy to the managers within 60 days of receiving the documents.
3. Sending to partners (Article 276). Within 180 days of the end of the financial year, the managers send each partner a copy of the financial statements, the managers' report and the auditor's report, with a call to a partners' meeting to approve them.
4. Deposit and inspection (Article 277). The originals must be deposited at the company's main office at least 14 days before the partners' meeting, and each partner may inspect them. A partner may also ask, whenever he wants, to inspect the records and documents of the past ten years. A clause in the constitutive documents or a later agreement that goes against this is void.
5. Auditor (Article 278). The partners' meeting must appoint an auditor for one financial year if the company has more than seven partners, if its capital exceeds OMR 50,000, if its constitutive documents call for an auditor, or if partners holding at least one fifth of the capital ask for one.

A compliance checklist for an Omani LLC

1. Keep the number of partners between two and fifty, and watch inheritance and share transfers.
2. Before selling shares to an outsider, send the pre-emption notice and wait out the partners' purchase period. Before reducing capital, publish the decision and wait 30 days for creditor objections.
3. Keep the partners' register current and sign every transfer with an official document, then register and publish it.
4. Register every amendment within 30 days.
5. Register and publish any limit on the managers' powers, or it will not bind third parties.
6. Set the 10% reserve from net profit after tax until it hits one third of capital.
7. Prepare statements within 90 days, send them within 180 days, and deposit the originals 14 days before the meeting.
8. Check each year whether the auditor rule in Article 278 applies.

Read also: Oman Foreign Capital Investment Law: Investor Guarantees | Commercial Contracts in Oman: Formation Rules Investors Miss

Frequently asked questions

How many partners can an Omani LLC have?

At least two and at most fifty, unless the Minister allows more for a particular company (Article 234).

Can LLC shares be sold on a market?

No. LLC shares cannot be traded and the company cannot resort to subscription (Article 237).

How much of the profit goes to the legal reserve?

10% of net profit after tax each year until the reserve reaches one third of the capital (Article 274).

When do the financial statements have to be ready?

Within 90 days of year end, and they must reach each partner within 180 days (Articles 275 and 276).

When must an LLC appoint an auditor?

When it has more than seven partners, capital above OMR 50,000, a clause that calls for one, or a request from partners holding one fifth of the capital (Article 278).

Can a partner inspect the books?

Yes. A partner who is not a manager may ask for information at any time and inspect the books, and may inspect ten years of records. Any clause against this is void (Articles 270 and 277).

How can you help?

We assist clients with Oman through our partners there. Contact us to review your constitutive documents, your yearly compliance calendar or your managers' authority.