Conversion of Companies allowed in Iran, not Yet Executable
J.Nouraei & M.Mostafavi Law Offices -8 December 2020- Tehran – After years of prohibiting the conversion of commercial companies into one another, Iran has decided to lift the ban. In our contact today with the Companies Registry we realized that the new regulations in this respect are being processed and will be executed in the near future. The conversion of private joint stock companies to public joint stock companies, foreseen in Articles 277 to 283 of the Amendment to the Commercial Code, remains possible as has previously been the case.
The seven companies referred to in Article 20 of the Commercial Code are: 1. Joint Stock Company (in two private and public forms) 2. Limited Liability Company 3. General Partnership 4. Limited Partnership 5. Joint Stock Partnership 6. Proportional Liability Partnership 7. Producers and Consumers Cooperatives.
A look at the background of the aforesaid development indicates that the Council of Ministers in its decree No. H57048T/88919 Dated 1398/07/15 (7 October 2019) added the following text as Article 36 to the Executive Procedure of the Companies Registration Law of the Iranian year 1311 (13 May 1932):
“Article 36- Conversion of all the companies listed under Article 20 of the Commercial Code of 1311 into one another is allowed. The manner of the conversion of these companies shall be based on the rules of implementation, to be prepared within three months by the Legal Deputy of the President assisted by cooperation with the Ministry of Economic Affairs and Finance and the National Organization for Registration of deeds and Properties”.
In a supportive development, the head of the Judiciary in circular letter No. 900/123032/1- Dated 99/7/30 (21 October 2020) has also declared that conversion of the commercial companies into one another is allowed and this stipulation should be added as Article 10 to the Procedural Regulations relating to Articles 196, 197 and 199 of the Commercial Code of Iran. (Copyrighted. Re-publication and usage wholly or partially allowed upon naming the source J.Nouraei & M. Mostafavi Law Offices ).