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Muscat - The Ministry of Commerce and Industry (MoCI) is taking strict measures to limit the multiplicity of commercial registrations. These include merger of relevant registrations into a single one.
A press release said that the merger will help government bodies deal with one legal entity rather than having to deal with many, and will also lead to forming a stronger legal entity with strong funds and effective administration that can bring success and power to the entity.
According to the ministry, simplifying and facilitating procedures for issuing commercial registrations are key to improving the investment environment in the sultanate. By simplifying the registration process for investors through the Invest Easy portal, the ministry aims to support entrepreneurs, investors and future trade with high quality service
Commenting on the ministry’s efforts to strengthen the sector, Abdullah bin Salem bin Khamis al Oraimi, manager of Department of Accuracy and Surveillance on Trade Facilities in MoCI said, “The ministry has halted more than 50 trade registrations, through Invest Easy, involving people who own individual facilities and shares in different companies. The suspension of registrations will not be lifted until investigation is completed and a proof of the validity of their commercial establishments, effectiveness and compliance with the commercial laws and regulations is provided.”
Oraimi said, “Also they must present an undertaking that they will obtain the lease and municipal licences and commit themselves to prepare and submit the financial statements according to International Accounting Standards and the Commercial Companies Law.”
He added, “It is also required to ensure that they adhere to the activities and trade purposes for which they are established. Moreover, the department has sent letters and messages via email according to their addresses available on Invest Easy. This measure has been announced through different media, and only a few responded, either by adapting or liquidating their companies according to the rules of law.”
Legal Requirement
“The problem is not the different trade names. Rather, it is a legal requirement as per Ministerial Decision No 124/2016 regarding the regulation of registration of Trade Names issued on April 27, 2016, which forbids the registration of a trade name if it is identical to the trade name of another establishment. The problem is the establishment of many companies and violating the law, especially when the ministry provides a lot of facilities and as many as 77 electronic services through Invest Easy,” Oraimi said.
Negative Impact
Oraimi confirmed that the multiplicity of trade registrations has many negative impacts. Registers can be exploited for non-commercial goals and objectives. Also, they increase hidden trade and contribute to an increase in the number of absconding and unemployed labourers. In addition, multiplicity of registrations can lead to exploitation by some people.
Multiplicity of registrations can reduce traders’ opportunities to obtain suitable commercial names for their establishments, causing competition in getting the necessary services from various official bodies. Further, multiplicity of records can hamper economic growth of the country.
He explained that the mechanism for harmonising the status of multiple registration holders, which regulate the merger of commercial companies, is to merge through annexation by dissolving one or more companies and transferring their financial assets to the new company that represent the merged companies.
As for the inactive companies, the only possible way for the partners is to dissolve and liquidate them according to paragraph (b) of Article 14 of the Commercial Companies Law No 4/74.
He said that individual institutions can transfer their trading activities to any other company or facility using the contracts of sale or gift without complying with the conditions of merger and not entailing publication in local newspapers then waiting for three months. Advertising in local newspapers and waiting for three months is limited to companies with fixed legal provisions.
The ministry aims to support the trader by giving guidance on compliance with the trade rules and regulations through various media channels. “We evaluate the results, and the ministry has procedural or legal options, such as pursuing legal action against anyone who violates these laws or regulations. The ministry, with its regulatory bodies and means tracks, monitors and controls irregularities,” he said.
© Muscat Daily 2017
