Joint Stock Company
Joint Stock Company
Oman, the most dynamic nations in the Middle East has achieved surprising development in economical sectors. Government also encourages foreign capital to enhance the overall country’s development. To enter into the growing markets of Oman one has to be in Oman. Oman offers various entities through which a business can be formed.
Joint Stock Company is one of the largest forms of the entity in Oman. Joint stock Company’s are divided into equal negotiable shares and his/her liabilities or/and debts will be according to the ratio of share they hold. Promoters of Companies having shares for public subscription shall subscribe neither less than 30% nor more than 60% of the Company shares and remaining for the public. No individual can cover more than 20% of the capital and the shares of promoters shall not exceed 60% of Company’s capital. The Joint-Stock Company shall be bound by all acts performed by its Board of Directors, Chairman, Managing Directors and all executives as long as they are a part of the Company and its power.
Certain essentials are:
- Minimum 2 shareholders
- Minimum of 30% of shares to be held by an Omani shareholder
- Least share capital is to be OR 150,000
- Approval to be derived from Commerce & Industry Ministry
Features of a Joint Stock Company in Oman
- A SOAC requires to have a minimum of 3 shareholders and a capital of RO 150,000
- The capital requirement for SOAG is RO 2 million and the founders are required to subscribe for between 30-60% of the capital
- The liability of each shareholder is only limited to the capital they have invested.
Benefits of a Joint Stock Company in Oman
- 100% ownership
- Huge amount of natural resources
- No personal or corporate tax levied
- Very fast developing economy
- World class infrastructures
- Being a strategic location, it allows entering into other Middle East countries
The process for establishing an SAOC or SAOG is similar to that of an LLC, but longer and more intensive, especially for a SAOG. The foreign company must first apply for name reservation to the Commercial Registrar of the MCI. The next steps are as follows:
- An application must be submitted to the Director General of Commerce at the MOCI for issuance of an Administrative Decision with a set of documents
- After submitting the complete package with the required fees, the Director General of Commerce at the MOCI has 30 days to determine whether to approve the company’s formation. If approved, an Administrative Decision for registration of the company is issued
- The Director, during the course of time, may ask you to amend the proposed MOA or AOA and may request additional copies of all submitted documents
- Once an Administrative Decision approving the formation of the company is issued, the company’s founding members have 30 days to convene a Constitutive General Meeting (CGM)
- In the meeting, the member must prove all the actions taken by the founder prior to the registration date of the company like ratification of any agreements entered into on behalf of the company and approval of all pre-formation expenses incurred for the registration and formation of the company
- The CGM is additionally required to elect the members of the initial board of directors and to appoint its first auditors
- Lastly, the CGM should ensure, and declare, that all formalities and conditions for the formation of the company have been met
- The company must simultaneously fill the application form for commercial registration in Arabic and sign the same from the authorized signatories
- For a SAOG, a further complexity is the requirement of undertaking an initial public offering
- Covering letter( in Arabic)
- Final constitutive contract and Articles of Association
- Company Feasibility Study + Articles of Association + Memorandum
- By-laws of the Proposed Company.
- No objection letter by the Sponsor for Omani residents.
- For Omani citizens a Legal Guardian consent is necessary
- Company registration certificate.
- Foreign shareholder documents (similar to those documents required for an LLC)
- Omani shareholder documents (similar to those documents required for an LLC)
- A bank certificate issued by a bank in Oman confirming that each of the founder shareholders has deposited their capital contributions with the bank in the name of the to-be-formed company
- Copies of identification documents of the founder shareholders, if natural persons
- Meeting minutes for Omani company
- Passport Copy and the certificate of criminal record clearance of the Foreign Resident.
- Financial Stability Proof.
Board Of Directors
- Any individual with 10% share can be the member of the board as per his/her interest.
- Remaining members can be elected by the Shareholders. They must deposit his no: of shares within 1 month as a security for his/her responsibilities.
- Two additional members with high competence & expertise will be elected by the ordinary General Meeting.
- If the Director officer is vacant for 2 months then a temporary Director can be appointed. If half of the board members are temporary then within 2 months Directors can be elected when the Director office is forever vacant.
Methods of raising additional Capital
- Issuing Shares
- Debentures Allotment
Public share Invitation
Invitation for public share subscription will be published in 2 daily newspapers for at least 1 week prior to the subscription commencement which includes:
- Name, Principal place, Objectives and Duration of the business.
- Date of the decision authorizing Company Establishment.
- No: of shares offered, its nominal value, payment mode and issue expenses.
- Banks associated with the subscription
- Company’s Capital, No: of shares & their nominal value.
- Promoter’s name, address & nationality,no:of shares, its nominal value and the payment amount of each individual.
- Details of the contributions including the Contributor name, their value and the evaluation.
- Subscription period & Requirement.
- Any additional data required by the Muscat Securities Market.
- Public Joint Stock Company
Also known as SAOG, Public Joint Stock offers its shares to the public and is listed on the Muscat Securities Market. It is required to have a minimum of 5 shareholders and should not exceed 12 members.
- Closed Joint Stock Company
Also known as SAOC, it does not offer its shares to the public. It is required to have a minimum of 3 shareholders and should not exceed 12 members.