An official expert is no longer required to evaluate non-cash contributions in limited liability companies.

Nouraei & M. Mostafavi Law Offices – 9 July 2024- Tehran- According to the Official Gazette of 30 Khordad 1403 (19 June 2024), the Court of Administrative Justice has ruled through the written judgment No. 140331390000250102 dated 4/2/1403 (23 April 2024) that contrary to what the Country’s Deeds and Properties Registration Organization has stipulated, evaluation of non-cash contribution in limited liability companies is no longer required to be done by an official expert.


According to Article 173 of the Constitution of Iran, the Court of Administrative Justice has been created to investigate the people’s complaints, grievances, and objections regarding government officials, organs, and statutes.


In paragraph 1 of Directive No. 1401/155244 dated 08/21/1401, the head of the Country’s Deeds and Properties Registration Organization his stated: “In all types of commercial companies that apply for non-cash capital registration at the time of establishment or capital increase, the evaluation of non-cash assets should be carried out by the official expert of Justice Administration for submitting his to the company registration authority.”

The Organization has argued to the Court of Justice Administration through Bill No. 2879667 dated 22/06/1402 (13 September 2023) that not only their decision is legal, but, at the same time, it prevents the abuse of those who fraudulently value the company’s non-cash contribution more than its actual value, and evaluation of the non-cash contribution by an official expert will be practical in combatting money laundering and emergence of so-called paper companies.


From the decision of the Court of Administrative Justice, it is understood that only those cases in which the Commercial Code explicitly emphasizes the need for official expert evaluation (such as Article 76 of the legal Bill Amending a Portion of the Commercial Code regarding joint-stock companies) require an official expert evaluation, but limited liability companies are exempted from that with respect to non-cash contribution. Hence, the partners are entitled to mutually agree on the value of contributions, as was done before the directive of the Country’s Deeds and Properties Registration Organization.


It is important to note that, based on our information, the company registration offices across the country have already begun implementing the ruling of the Court of Administrative Justice.


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