Every joint stock company or limited liability company registered with the Ministry of Commerce and Industry (“MOCI”) in Oman is required to hold Annual General Meetings (“AGMs”) in compliance with the requirements provided under the Commercial Companies Law of Oman (“CCL”).
A joint stock company should hold an AGM within a period of three (3) months from the close of their financial year. However in the case of limited liability companies, the statutory period is six (6) months from the end of the financial year.
As a general rule, AGMs for both limited liability companies and joint stock companies are required to approve the following items as part of the agenda for the AGM:
- Report of the Board of Directors in case of a joint stock company or report of the managers in case of a limited liability company;
- Audited accounts of the company including the auditor’s report, the balance sheet and profit and loss statement;
- Payment of dividend to the shareholders of the company (whether joint stock or limited liability company) upon the recommendation of the directors/managers.
In addition to the above, the shareholders of a joint stock company are also required to approve the following items:
- Transactions entered into with related parties of the company;
- Sitting fees and remuneration of the directors;
- Appointment of directors if there is a vacancy or the term of the board has come to an end; and
- Appointment of the auditor for the company.
Compliance and procedure for joint stock companies
Notice of the AGM should be sent to the shareholders at least fourteen (14) days prior to the date set for the AGM. In the event fourteen (14) days’ notice is not provided, all of the shareholders must be present at the AGM as required under Article 118 of the CCL.
Prior to sending out the notice of the AGM to the shareholders and preferably eighteen to twenty days prior to the date of the AGM, the agenda for the AGM together with the supporting documents, including the audited accounts, related party transactions, report of the board of directors and corporate governance report, etc. and an invitation to the Capital Market Authority (“CMA”) or MOCI to attend the AGM should be filed with the CMA or the MOCI, as the case may be for their approval. Invitation to the shareholders and publication of the notice of the AGM in the newspaper as required under the CCL can commence only after the CMA or MOCI has approved the agenda.
Agenda of the AGM for a closed joint stock companies (“SAOC”) may be signed singly by the chairman or deputy chairman of the company. However in the case of a public joint stock companies (“SAOG”) the agenda must be signed by the chairman, auditors and the legal advisor of the company.
Once the MOCI or the CMA approve the AGM agenda, notice of the AGM may be sent to the shareholders and the company should also publish the agenda in two local newspapers for two consecutive days at least fourteen (14) days prior to the date of the AGM. Publication of the agenda in local newspapers may be avoided if the company can confirm that 100% of its shareholders will be present at the AGM. In the case of SOAGs, the agenda for the AGM together with other supporting documents must also be published on the Muscat Securities Market’s electronic transmission system.
In addition, the company must send an invitation to the auditors and the legal advisors. The company must also ensure that either the Chairman or the Deputy Chairman is present to Chair the meeting. In the absence of both, the meeting will be considered as invalid.
A shareholder of the company may appoint a proxy to represent him at the AGM. In such event the company should receive the proxy form duly signed by the respective shareholder prior to the date of the meeting or on the day of the AGM.
Finally, minutes of the AGM duly signed by the Chairman of the meeting, the Secretary, the auditors and the legal advisors should be deposited with the MOCI/CMA within fourteen days from the date of the AGM.
Compliance and procedure for limited liability companies
In case of limited liability companies, the manager is required to prepare the balance sheet and profit and loss statement within a period of four (4) months from the close of the financial year of the company. The manager should then send every partner of the LLC the notice of the AGM together with the balance sheet, profit and loss statement and the report from the auditors and managers within 6 months from the end of the financial year of the company. Unlike in joint stock companies, notice for the AGM may be sent to the partners without the need for the same to be approved by the MOCI. The partners should be given at least twenty (20) days prior notice of the AGM.
Every partner of an LLC is entitled to appoint a proxy to represent him at the AGM. In such cases, the partner may sign a written proxy in favour of another partner to attend the AGM and vote on his behalf. A proxy may be grant only to a partner of the company, unless the constitutive contract of the company provides otherwise.
Finally, a resolution of the partners’ decision regarding the items mention in the AGM agenda should be drawn up as soon as possible after the meeting and signed by the partners representing at least 50% of the share capital of the company. The minutes of such AGM should be maintained by the company in their records, as there is no requirement for the same to be filed with the MOCI.