Oman: The Role Of Managers Of Limited Liability Companies Under Oman's New Commercial Companies Law

Last Updated: 19 August 2019
Article by Nick Simpson and Riaz Haq

The limited liability company (the LLC) is the most commonly incorporated form of company in Oman by both foreign investors and Omanis alike.

LLCs are typically preferred by investors to other types of Omani companies as they are subject to lower capitalisation requirements, a simpler regulatory regime and are, by comparison to other types of Omani companies, more straightforward to establish.

Key changes for managers of LLCs

The new Commercial Companies Law (promulgated by Sultani Decree No. 18/2019) became effective on 17 April 2019 (the New CCL) and repealed the old Commercial Companies Law (Law no. 4/74).  

Managers under the New CCL retain largely the same roles and responsibilities.  Pursuant to Article 264 of the New CCL and subject to the restrictions in the New CCL, managers may carry out all acts necessary for pursuing the LLC's objectives, unless their authority is limited by the LLC's constitutive documents.

However, the New CCL does introduce a number of provisions that extend or alter the responsibilities of managers.  A summary of the key provisions introducing these changes is set out below:

  1. Register of partners – Article 247: There is a new requirement for LLCs to maintain a register of partners.  Ownership of membership interests in an LLC will not be effective unless details of the partners and their interests are listed in the register.  Managers are jointly liable for maintaining the register and for the validity of its data.
  2. Liability of managers – Article 265: With respect to liability, managers of LLCs are now subject to the same provisions governing the members of the board of directors of joint stock companies.  From our analysis of the law, the key provisions relating to directors of joint stock companies that managers are now subject to are:

    • Article 202: Managers shall not exploit their positions for personal or third-party gain.  Managers who breach this provision will be liable to the company, its partners and third parties for any losses suffered and will be required to reimburse the company for any gains, even if no loss is suffered by the company.
    • Article 203: Managers shall not take part in the management of another company that is conducting similar business, shall not carry out any business similar to that of the company for their own personal gain or that of third parties, and shall not use the company's assets for their personal interest or the interest of third parties without the prior approval of the partners at a general meeting.  Any manager violating these provisions shall be liable for losses suffered by the company.
    • Article 206: Managers are jointly liable towards the company, shareholders and third parties for losses suffered due to their unlawful joint actions, ultra vires acts, fraud, forgery or wrongdoing committed in the course of performing their duties, as well as for failing to act as a prudent person when performing their duties.
    In addition, under Article 269, managers are now jointly and severally liable to the company and third parties for violating the provisions of the law, the constitutional documents or for any mismanagement of the company.  If more than one manager is complicit in any wrongdoing, then a court shall determine the proportion of damages payable by each of the managers involved.
  3. Conflict of interest – Article 266: Managers must now declare any personal conflict of interest  to the partners of the LLC at partners' meetings.
  4. Discharging debtors – Article 267: Managers are now prohibited from discharging debtors' payment obligations to the company or settling disputes with debtors without the prior unanimous consent of all partners (unless expressly permitted to do so by the company's constitutive contract).
  5. Partner inspection rights – Article 270: Any partner who is not a manager may, at any time, request company information and may examine the company's books, records, accounts and other documents.  In the event of obstruction of these inspection rights, the partner(s) have the right to file a claim for damages against the managers for any loss suffered.
  6. Limitation period – Article 271: Claims against the managers under Articles 269 and 270 may only be brought within five years from the date on which a manager's misconduct becomes known by the effected party.
  7. Loans and guarantees – Article 272: Managers and partners are prohibited from obtaining loans or guarantees from the company for themselves, their spouses or relatives (up to the third degree).  Any loan or guarantee granted by the company contrary to this provision is to be considered null and void.
  8. Dismissal – Article 273: Managers can now be dismissed and replaced by way of a partners' resolution passed by partners representing at least 75% of the company's capital; a partner may also apply to the court to dismiss a manager.
  9. Voluntary reserve account – Article 274: The requirement to deduct 10% of the company's net profits from each financial year for the purpose of a legal reserve until the legal reserve reaches one-third of the company's capital remains. However, managers may now voluntarily deduct up to 20% of the net profits for the purpose of the legal reserve account.

Furthermore, managers should also be aware of the penalty regime under the New CCL which is considerably more severe in parts than the old Commercial Companies Law – this will be the subject of a future client alert from Dentons Muscat.

About Dentons

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions