Saturday 01 / November / 2025
In the life cycle of a business, closure is sometimes inevitable. Whether due to financial loss, fulfilment of the purpose, or shareholders agreement, Oman’s Commercial Companies Law promulgated under Royal Decree 18/2019 ensures that liquidation is carried out through a transparent legal process that protects creditors, shareholders, and the public interest.
Speaking exclusively to the Times of Oman, Dr. Mohammed Ibrahim Al Zadjali, Founding Partner of Mohammed Ibrahim Law Firm a leading law office in the Sultanate stated: “Liquidation is not just winding down operations. It is a legal procedure with serious implications, governed by strict timelines, defined roles, and formal requirements.”
“The company may be dissolved for various reasons, including failure to conduct business for over two years, loss of most of its capital, or by shareholder agreement or court order.
“Once a dissolution event occurs, liquidation procedures must begin immediately. The company enters a liquidation phase and must add under liquidation to its name,” he explained.
He further stated that “the law requires the appointment of a licensed liquidator, either by shareholder agreement or court order, who takes full control of the company’s assets and liabilities. The liquidator must notify all creditors via registered letters and publication, giving them 180 days to submit claims, settle debts in legal order of priority, and distribute remaining assets to shareholders based on their shareholding.”
“The liquidator must maintain detailed records, submit periodic reports, and complete the liquidation within three years unless extended by the authorities Upon completion, the liquidator submits a final report and a final statement of accounts audited by the company’s auditor for shareholder approval and filed with the Registrar,” he said.
He added that the company is only removed from the commercial registry once the final report is accepted and filed with the Registrar, ensuring that all obligations have been legally closed. Failure to follow the procedure can expose liquidators to personal liabilities for damages resulting from violations of law, exceeding authority, fraud, forgery, negligence, or failure to act as a prudent person.
“Oman’s Commercial Companies ensures that business closure is handled with legal responsibility, fairness, and financial discipline,” he concluded.
* (Mohammed Ibrahim Law Firm ([email protected]), (+968 244 87 600) was established 18 years ago and is serving clients through its offices in Muscat and Sohar, as well as operating on a request basis in other areas. It offers legal representation across a wide range of practice areas that include Labour Law, Corporate, Commercial, Contracts, Banking and Finance, International Trade, Foreign Investment, Insurance, Maritime Law, Construction and Engineering Contracts, International Arbitration, Intellectual Property and more).
