Frequently Asked Questions: Corporate Governance of Omani LLCs

When setting up an Omani limited liability company (Omani LLC), one of the key issues is how the Omani LLC will be governed. Many clients, particularly those from jurisdictions outside of the Sultanate, seek for the Omani LLC to be governed by a board of directors.

However, under the Omani Companies Law, an Omani LLC is governed by its shareholders acting pursuant to shareholders’ resolutions and is managed by one or more managers (the latter, often referred to as board of managers) who are appointed by the shareholders and act within the limits of the powers delegated to them (including any authorized signatory powers) by the shareholders.

That is to say, the Companies Law does not contemplate boards of directors for Omani LLC’s, as it does for Omani joint-stock companies. An Omani LLC will sometimes put in place a nominal ‘board of managers’ or ‘steering committee’; but in order for the decisions of such board or committee to be legally binding, they would need to be given legal effect by a shareholders’ resolution or the members of such board or committee would have to be authorised signatories duly empowered under their authorized signatory powers to take such decisions.