SAOGs play an important role in the Omani economy, so it is not surprising that the Financial Services Authority (FSA) has issued unique regulations that apply to the operations of such companies, including specific rules on the duties of the board of directors, the internal auditor, and the legal advisor of the company. This blog post will highlight some of the duties of a legal advisor of an SAOG as prescribed by the Public Joint Stock Companies Regulation.
What is an SAOG?
SAOG is a French abbreviation for the term Société anonyme Omanaise general, which means in English an Omani Public Joint Stock Company, or more simply, a company publicly traded in the stock exchange. Examples of SAOGs include some of the biggest companies in Oman, such as Bank Muscat and Omantel. In Oman, there are two forms of joint stock companies, the first is the SAOG, and the other is the SAOC, i.e. a Closed Joint Stock Company.
The main legal instruments that govern SAOGs in Oman are Commercial Companies Law and the Public Joint Stock Companies Regulation. This regulation provides a comprehensive framework for the establishment of an SAOG and the conversion of any other form of company into an SAOG.
How are Legal Advisors Appointed?
For us lawyers, the Public Joint Stock Companies Regulation is interesting because it requires the board of directors of an SAOG to appoint a legal advisor and prescribe in detail the qualifications and duties of this legal advisor.
A company that wishes to appoint a legal advisor must abide by the requirements in article 176 of the regulation. This includes a requirement that the legal advisor must have a bachelor’s qualification or its equivalent in law from a recognised university and that the legal advisor has practical experience of not less than five years in corporate and legal work relating to commercial activities. However, Omani nationals can be exempt from the experience requirement, provided the company enrols them in training programmes in various fields of expertise mentioned in the article.
What are the Duties of the Legal Advisor?
The duties of the legal advisor are specified under article 183 of the Public Joint Stock Companies Regulation. We will highlight some of the most important ones here:
1. Reviewing Prospectuses
A Prospectus is a formal document that the company’s issue manager needs to submit to the authority for the company to be approved as an SAOG. This is an essential document that requires adequate legal skills to make sure that the document meets the requirements prescribed by the law. A key duty of a legal advisor of an SAOG is to review the prospectus.
2. Verifying Validity of the General Meetings
SAOG companies are required by law to hold certain ordinary and extraordinary meetings. Each of the meetings has specific requirements set by the law which the legal advisor must verify for the meeting to be deemed valid. The legal advisor is responsible for verifying the validity of the invitation procedure, the quorum, and the person holding the chairmanship of the meeting, as well as the presence of the accounts auditor.
3. Reviewing Agendas and Minutes
Due to the significance of the general meetings of SAOGs, the regulation imposes specific obligations on the legal advisor to review and approve the agendas of the meetings as well as the minutes of the meetings (i.e. the summary of the deliberations and outcomes of the meeting). The legal advisor is required to ensure that such agendas and minutes are compliant with the law, the regulations, the articles of association of the company, as well as the instructions issued by the FSA.
4. Verifying Validity of the Board Formation
The role of the legal advisor extends beyond the actual meetings as they must verify that the board remains valid throughout the term of membership in cases of, for example, the vacancy of a seat or the disqualification of a member from continuing to remain on the board.
5. Reviewing the Nomination Forms
The legal advisor is responsible for making sure that nomination forms of new members of the board are in line with the legal requirements, which is an obviously pre-requisite for any elections taking place in connection with the board.
Conclusion
The duties mentioned above are merely examples of the requirements stipulated by the Public Joint Stock Companies Regulation and they highlight the importance of the role of legal advisors in SAOGs. We highly recommend that all legal advisors read the full text of this regulation on the link below:
