OMAN LAW AND PRACTICE Contributed by: Said Al-Shahry, Thamer Al-Shahry, Jeremy Pooley, Maria Mariam Rabeaa Petrou, Shadha Al Kharusi and Salim Al Harthi, Said Al Shahry & Partners (SASLO )
LLCs General principles
and the constitutional documents of its parent company. The general manager of a branch will also be personally liable if the authority granted in their power of attorney is exceeded (as will any other authorised signatory of the branch who exceeds their authority). The parent company of a branch is required to guarantee the obligations and liabilities of the branch pursuant to the letter of undertaking referred to under 3.2 Incorporation Process . Therefore, the liability of a branch is not ring- fenced. 4. Employment Law 4.1 Nature of Applicable Regulations The employer/employee relationship in Oman is regulated by the Labour Law RD 53/2023 (the “Labour Law”). Regulations are issued from time to time by the Ministry of Labour to regulate par - ticular aspects of the employment relationship further. The Labour Law prescribes an employee’s mini - mum benefits and entitlements, such as maxi - mum working hours, annual leave and sick leave entitlements. The employment contract may include benefits and entitlements that exceed these minimum requirements. Employee unions are recognised in Oman. Col - lective negotiations may take place between the employer and the employees’ trade union to improve the terms and conditions of work, enhance productivity and settle disputes. Employees have a right to strike peacefully, pro - vided certain procedures are followed.
The managers of an LLC are jointly or severally liable to the LLC and third parties for, inter alia, their violation of the CCL 2019 and/or the LLC’s constitutive documents and their negligence in the management of the LLC. The CCL 2019 also provides that the managers of an LLC are subject to the same liability as the directors of a JSC, regardless of any provision to the contrary in the LLC’s constitutive docu - ments. Conflicts of interest The CCL 2019 contains several provisions that subject a manager to liability where the CCL 2019’s provisions requiring a manager to avoid conflicts of interest have been contravened. Piercing the corporate veil The general rule is that the liability of an LLC is limited to the amount of its share capital, and a shareholder’s liability is limited to its sharehold - ing in the LLC’s share capital. There is, however, the potential in certain lim - ited circumstances for the corporate veil to be pierced in the event of an LLC’s bankruptcy, and managers can also become liable where they act outside their authority. In certain limited cir - cumstances, managers may also become crimi - nally liable under the Penal Code RD 7/2018, as amended (the “Penal Code”) in the event of an LLC’s bankruptcy. Branches The liability of a branch’s directors/managers and officers will, generally speaking, be deter - mined based on the laws applicable in the juris - diction of incorporation of its parent company
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