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According to the Iranian Commercial Code, there are 7 type
of companies all of which must be duly established and
registered in order to have legal personality. All types of
companies under Iranian law, are briefly introduced below:
- Joint Stock Company
is a company whose capital is divided into shares and the
liability of whose shareholders is limited to the par value
of the shares respectively held by them. The members of a
joint stock company must not be less than three.
Joint stock companies fall under two distinctive categories:
1- Public Joint Stock Company
whose promoters secure a portion of its share capital by way
of transferring shares to the public and such a company is
called a public company.
2- Private Joint Stock Company
whose share capital, in its entirety, is secured by its
promoters at the time of its formation and such a company is
called a private company.
- Limited
Liability Company is a company formed by two or
more persons for the purpose of trading; the company's
capital is not represented by shares or bonds, and the
responsibility of the partners is limited to the extent of
their contribution only. In the company's title the phrase
"limited liability" must appear, otherwise the company will
be considered as a general partnership with respect to third
parties. The name of the company must not include the name
of any partner, otherwise the partner whose name appears
will, by third parties be looked upon as a member of a
general partnership. A partner's contributions cannot be
represented by transferable commercial instruments whether
bearer or registered. The partners' contributions in the
company cannot be transferred to third parties without the
consent of a majority of partners, representing at least
three quarters of the company's capital. The partners'
contributions will not be transferred unless a notarial deed
is drawn up in this connection.
- General Partnership
Company is formed between two or more persons
with joint and several responsibility under a common name
for the purposes of trade. When the company’s assets are not
sufficient to meet its liabilities, each of the partners is
liable for the payment of all the debts of the firm. Any
stipulation among partners to the contrary is null and void
so far as third parties are concerned.
- Limited Partnership
is formed for trading (under a special name without any
issue of shares) between one or more general partners and
one or more partners with limited liability. The general
partners are liable for all the debts and obligations of the
firm that may be incurred in excess of the assets of the
firm, whereas the limited partners are only liable up to the
extent of the capital they have contributed or may
contribute to the partnership. The term "limited
partnership" and the name of at least one of the general
partners must appear in the name of the firm. A limited
partner whose name appears in the name of the firm is, so
far as the creditors of the firm are concerned, considered
to be a partner with unlimited liability. Any agreement to
the contrary between partners is null and void so far as
third parties are concerned. The management of a limited
partnership is entrusted to the partner or partners with
unlimited liability. The scope of their powers is the same
as that defined in the case of partners in general
partnership.
- Joint Stock
Partnership is formed under a special name,
between a number of shareholding partners and one or several
partners with unlimited liability. The shareholding partners
are partners whose capital is represented by shares or bonds
of equal nominal value, and their responsibility is limited
to the extent of the amount of capital each has contributed
to the partnership. A general partner is a partner whose
capital is not represented by shares and who is liable for
all debts the firm may have incurred beyond its capital. If
there are several general partners, their responsibility to
creditors as well as their relationship with each other
shall be governed by the provisions concerning general
partnerships. In the name of the firm "joint stock
partnership" must appear, as well as the name of at least
one of the general partners. The management of a joint stock
partnership is exclusively in the hands of the partner or
partners with unlimited liability.
- Proportional
Liability Partnership is formed for trading
purposes, under a special name, by two or more individuals
the liability of each partner being in proportion to the
amount of capital subscribed by him. Therefore, if the
assets of a proportional liability partnership are not
sufficient to meet its liabilities, each of the partners is
responsible for the firm's liabilities, in proportion to the
capital he has subscribed. In the name of such firms the
phrase "Proportional Liability Partnership" and the name of
at least one of the partners must appear.
- Cooperative Company:
1- A Producers
Cooperative Company is one formed between
producers and artisans for the production and sale of goods
that they produce in common.
2- A Consumers
Cooperative Company is one formed for the
following purposes:
(a) Sale of Articles necessary to life either produced by
the members or purchased by them.
(b) Distribution of profits and losses between members in
proportion to the purchases made by each of them.
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