Saudi Arabia announced Friday that Aramco had been granted new status allowing individuals to hold shares in the oil giant, which it aims to float on the stock market this year.
A bulletin published in the kingdom's official gazette said the cabinet had approved giving joint-stock status to Aramco effective January 1, 2018.
The move comes as the kingdom prepares to sell under five percent of state-owned Aramco, the crown jewel of its economy, in what is expected to be the world's largest ever initial public offering.
The flotation forms the cornerstone of a reform drive led by Crown Prince Mohammed bin Salman to wean the economy off its reliance on oil.
Managed by a board of directors, rather than directly by government, joint-stock companies allow individuals to hold stock and thus share in both the debt and profit of the company.
A provisional board of directors - Aramco's first ever - will be appointed based on the recommendation of the kingdom's oil minister, the bulletin said.
It will be followed at a later date by "the formation of a board of directors under the provisions of the founding statute".
The statement did not specify if the board would be elected or appointed.
The state will retain direct ownership of the majority of Aramco shares, according to the gazette.
The Aramco IPO could generate some $100 billion in much-needed revenue after the country lost hundreds of billions of dollars since crude prices slumped in mid-2014, leading to huge budget deficits.
Aramco CEO Amin Nasser has said the IPO is scheduled for the second half of 2018For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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