Saturday 07 / February / 2026
A business decision to formally and permanently cease operations is a substantial undertaking. Oman’s Commercial Companies Law, established under Royal Decree 18/2019, provides a clear and structured legal framework for the dissolution and subsequent liquidation of companies, ensuring the process is conducted with transparency, fairness, and full protection for the rights of all parties involved.
In an exclusive interview with Times of Oman, Dr. Mohammed Ibrahim Al Zadjali, Founding Partner of Mohammed Ibrahim Law Firm, said that, “dissolution is not a single event but a process initiated by specific triggers. These include a resolution by the shareholders, the expiry of the company’s term, a severe loss of capital, or the number of shareholders falling below the minimum prescribed for that company form, as well as where the company fails to commence its business, ceases its activities for more than two years, becomes bankrupt, or is dissolved by a final court order, as prescribed under the law. Once triggered, the company must immediately begin liquidation, which is the formal winding up of its affairs.”
“Upon dissolution, the authority of the company’s managers ceases. The process is then placed in the hands of a licensed liquidator, who takes custody of all assets and assumes responsibility for settling the company’s obligations.”
“A fundamental aspect of the process is the protection owed to creditors. The law mandates strict safeguards. The liquidator must notify all creditors via registered letters and publication, giving them 180 days from publication to submit their claims. The company’s assets must be used to settle these valid debts in their legal order of priority before any distribution to shareholders can be considered,” Dr. Mohammed noted.
Addressing the final stages, he stated that “following the full settlement of liabilities, any remaining assets are distributed to the shareholders according to their proportionate interests. To finalise the process, the liquidator prepares a comprehensive report and audited accounts and submits them to the shareholders and the creditors. Upon approval by the shareholders, this approval is then filed with the Commercial Registrar, leading to the formal removal of the company from the commercial register and a final public notice of its closure.”
“Oman’s legal framework for company dissolution provides a fair and orderly exit, safeguarding creditors and shareholders alike while strengthening confidence in the commercial environment,” Dr. Mohammed concluded.
(Mohammed Ibrahim Law Firm ([email protected]), (+968 244 87 600) was established on 14th December 2006 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).
