The Commercial Code of Iran provides for seven kinds of trading companies:
There are three types of companies that are more common to be established by non-Iranians in Iran:
Joint-Stock Company (Sherkat-e Sahaami)
As it is defined by the Commercial Code of Iran, a joint-stock company is a company whose capital is divided into equal parts called shares, and the liability of shareholders for debts of the company is limited to the par value of their shares.
1.2.1 Public joint-stock company
In a public joint-stock company, the founders must subscribe to at least 20% of the shares and they must first pay at least 35% of the company's capital. They must deposit this amount in an attributable bank account in the name of the company and these paid funds cannot be used in the name of the joint-stock company about to be established until the completion of the registration of the company.
The founders of a public joint-stock company provide part of the company's capital by selling shares to the public.
Moreover, the other requirements for the establishment of a public joint-stock company are as follows:
1.2.2. Private Joint-Stock company
All the capital of a private joint-stock company must be provided exclusively by the founders at the time of the establishment. In a private joint-stock company, the founders themselves must pay at least 35% of the subscribed capital.
In addition to the abovementioned, to form a private joint-stock company the following steps are required by the founders:
To form a private joint-stock company, a minimum capital of IRR 1,000,000 is required at the time of formation, and for a public joint-stock company the minimum capital will be IRR 5,000,000.
1.4. Par value
A par value or nominal value is required to be allocated to the shares of a joint-stock company and all shares must have an equal value. A public joint-stock company has a maximum nominal value of IRR 10,000 per share provided by law but there has not been a minimum or maximum nominal value set for the shares of a private limited company.
Joint-stock companies comprise 3 organs:
A joint-stock company is managed by the board of directors who are elected by the shareholders at least once every 2 years through the elections.
Dissolution of a company is the cessation of the company's operations for any reason.
The dissolution of a company can be either compulsory or voluntary.
Compulsory dissolution of a company is in cases where the company is dissolved legally or by court order. Such as the impossibility of doing the subject of the company or the bankruptcy of the company.
Voluntary dissolution of the company is in cases where the company is dissolved by the decision of the extraordinary general assembly.
A limited liability company is defined as a company formed by two or more persons for trading while the company's capital is not represented by shares or bonds. Each partner is responsible for the obligations and liabilities of the company only to the extent of its contribution.
The name of the company is always accompanied by the phrase "limited liability", and the name of the company must not include the name of any partner.
The formation of a limited liability company is per a contract signed between the partners.
The office of the Registrar of Companies must be notified in writing of the resolution approving the issue and its publication accompanied by the declaration giving the necessary information.
Further requirements for registering a limited liability company are as follows:
The contribution or partners' portion is the cash or non-cash capital that indicates the extent of the partners' partnership in the company. The contribution can be cash or non-cash.
The limited liability company comprises 3 bodies:
The limited liability company shall be dissolved in the following cases:
Registering a company in Iran has many complexities and subtle points; Therefore, it is highly recommended to consult with a lawyer specializing in business and commercial affairs before registering any sort of company in Iran.
Karimi & Associates Law Firm’s International Trade Law division is ready to provide company registration services and professional legal advice to you.
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