The Single Person Company (SPC), or alternatively known as the One-Person Company, represents a distinctive business legal structure blending the autonomy of a sole proprietorship with the protective veil of limited liability enjoyed by Limited Liability Companies (LLCs). Enacted under articles 291 to 297 of the Commercial Companies Law of 2019, the SPC caters to individual entrepreneurs and corporate entities seeking to isolate particular business activities within a single-owner framework. This blog post will provide details on the formation, liability, and limitations of SPCs under Omani law.
Formation
An SPC is a limited liability company in which 100% of the share capital is held by a single natural person (an individual) or a juristic person (a corporate entity). To maintain market transparency and prevent overly complex corporate webs, the law states that an individual may not establish more than one SPC, and that an SPC cannot establish another SPC of its own.
Limited Liability
The defining feature of an SPC is the limited liability shield provided to the owner, which caps their financial responsibility to the amount of the capital invested. This safeguards the owner’s personal assets from company debts. However, article 296 of the law provides that the owner would be held personally liable if he, acting in bad faith, liquidates it or discontinues its activity before the expiry of its duration, or if he does not separate the company’s business from his private business.
Dissolution
Article 295 of the law governs the dissolution of an SPC and provides that this occurs automatically upon the death of the sole natural owner unless the heirs consolidate the shares in one person or elect to continue the business in another legal form within 180 days, and the company likewise ceases if the juristic owner itself is dissolved.
Conclusion
SPC is one of the most popular company forms that are used for doing business in Oman. It is highly recommended that you read the text of the Commercial Companies Law to learn more about its attributes on the link below:
