Limited Partnership in OMAN
A limited partnership in Oman is a company formed by one or more general partners liable for the company liabilities without limit, and one or more limited partners liable for the company liabilities to the extent of their respective shares in the capital only. A limited partnership is simply a modified general partnership.
There are two categories under limited partnership:
- General Partners, whose liability to the partnership is jointly and severally liable. This would mean that all the partners are equally liable. The partner must be an Omani or a GCC national, liable for the debts and obligations of the partnership without limitation in liability.
- One of more partners whose liability is limited to a particular amount of capital contribution. This partner’s liability is limited to the amount of capital contribution. Here foreigners may be silent partners, who essentially do not have a role in the management as opposed to the administration of the company regarding third parties. Silent partners should of course ensure that they do not lead third parties to believe that they are anything other than a silent partner, otherwise their limited liability will cease.
A general partnership can be formed between several people and this partnership is required to be registered under Commercial Register. While registering all the agreements between the partners are required to be mentioned.
- Company name of a General Partnership Company should contain the name of one or more partners.
- All the members are required to perform their part of work as specified in the agreement.
- General Partnership Companies comes to an end when a new member is added or any member leaves the partnership. General Partnership Company can also expire when the partnership term gets over.
- A partner cannot transfer the ownership without the consent of all the partners as mentioned in the MOA but can transfer the returns & profits associated with his/her share.
- An exited partner will not bear the debt and responsibilities occurring after his/her withdrawal date.
- For several managers, the final decision will be on the basis of the majority vote unless any one of them offends the conclusion on the basis of MOA.
- The partnership role may end in the case of death, declaration of ineligibility/bank issues/withdrawal. Remaining Partners will share the partnership among them after registering in Commercial Register.
- The liabilities on withdrawal of a partner must be cleared on exit, or else must be cleared by the rest of the partners.
- In case of a commercial dispute, any one partner can go against the failure and file case to dissolve the partnership. If the failure is caused by that partner then his disputes are cleared and removed from the partnership.
- If a partner exits in case of death/ineligibility he cannot transfer his responsibility to any individual but the liabilities or value of share will be transferred to legal heirs/representatives. If there arises a dispute then the share value is advised by an authorized expert, on the basis of the analysis of the business status just before the dispute. Settlement will be on agreed terms.
- At the point of dissolution all partners, including those who are not entitled to manage the partnership, shall have the right to participate practically in the decisions that affect the liquidation of the partnership.
Limited Share Partnership
In this type of partnership, two types of members are involved; General Partners involved in managerial practices of the business and Limited Partners who contribute in the capital of the company but not in the management related practices.
- Minimum number of partners involved in this is two
- LLPs have no limitation on a maximum number of partners.
- Limited Partnership should be registered under the Commercial Register.
- In a Limited Liability Partnership, General Partners are liable to their full extent of personal property but Limited Partners are supposed to bear the liability to the amount of capital contributed by them.
- Limited Partnership is similar to General Partnership in the factors of establishment, management, dissolution and liquidation.
- Dissolution may not occur in the case of death,ineligibility,bankruptcy,withdrawal or dismissal of a partner.