Sunday 07 / September / 2025
In Oman, a share transfer is a legally significant event, not merely a change of ownership. Governed by Royal Decree 18/2019, the Commercial Companies Law establishes a framework to ensure every transfer is valid, fair, and compliant with the company’s corporate structure and shareholder rights.
Speaking exclusively to the Times of Oman, Dr. Mohammed Ibrahim Al Zadjali, Founding Partner of Mohammed Ibrahim Law Firm, a leading law office in Oman, stated: “Not all share transfers are equal. The law treats them differently depending on whether the company is an LLC or a Joint Stock Company, and it imposes strict conditions to protect the company and other shareholders.”
“In an LLC, shares may be transferred; however, before transferring shares to a third party, the selling shareholder must first offer them to the existing shareholders under their statutory pre-emptive right. If the shareholders do not exercise this right within the prescribed period, the transfer to the third party may proceed. In accordance with Article 248, a share transfer is not effective against the company or third parties unless it is registered in the Commercial Register; without such registration, the transfer has no legal force,” he said.
He further stated that “for Joint Stock Companies, share transfer is generally permitted, but Article 127 imposes a restriction on the transfer of founder’s shares. Founders in a Public Joint Stock Company shall not dispose of their shares before the company has published two balance sheets for two consecutive financial years from the date of its registration. This ensures stability in the early operational phase. However, exceptions apply, such as assignments of shares owned by the State, assignments amongst the founders themselves, or transfers by inheritance”.
He clarified that “inheritance of shares is addressed by the law, confirming that shares pass to heirs upon the shareholder’s death. For Joint Stock Companies, Article 119 specifies that a share owned by heirs cannot be disposed of except with the approval of all heirs or their legal attorney. For LLC, the transfer of shares to legal heirs is allowed. Article 256 confirms that such transfers are not subject to pre-emptive rights of other shareholders. He emphasized that in all cases, the transfer of ownership of shares is affected by entering it in the company’s share register, and a company shall not consider the ownership of any share by any shareholder unless it is registered in its shareholders’ register.”
He concluded by stating that, Oman’s Commercial Companies Law establishes a clear and effective framework for share transfers, ensuring that every change in ownership is legally sound, secure the interests of the company.
(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).
