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Company Register in the Country
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Company Registration in Iran
Trading companies are those that are established with the aim of carrying out commercial and financial affairs to conclude fully formal contracts between two or more individuals by determining the amount of capital, profit, and liability limits.
Companies are generally divided into several categories, as follows:
– Private Joint Stock Companies
– Public Joint Stock Companies
– Limited Liability Companies (LLC)
– Proportional Liability Partnership Companies
– General Partnership Companies
– Mixed Joint Stock Partnership Companies
– Limited Partnership Companies
– Production & Consumption Cooperative Companies
Vista GTC can aid you with the registration process of all of the aforementioned companies.
Private Joint Stock Company
– A company with at least 3 members and private shares is called a private joint stock company. It should be noted that the shareholders are necessarily private. In this type of company, one person is considered as the CEO, and the rest of the board members are not necessarily shareholders of the company.
– Establishing a private joint stock company is possible for anyone, and there are no restrictions on choosing the type of activity. Also, the initial capital of these companies is provided by their founders after registration, and each of them, as a shareholder, must be responsible for the company’s debts and obligations according to their share.
– It should be noted that in private joint stock companies, the shares of each partner can be bought and sold through the general assembly (not the stock market), and people can also participate in these transactions. Of course, the general assembly is composed of all shareholders of a company, and in it, all members have the right to vote.
– Private joint stock companies require a minimum of 5 board members, including at least 3 shareholders (minimum) and 2 inspectors, according to Article 107 of Iran’s Trade Law Bill, to be registered.
– The use of approved funds in the name of the company during the establishment process.
– Issuance of share certificates or temporary share certificates.
– Conversion of privately held companies to public companies.
– Issuance of bonds and participation papers.
– Founders of these types of companies are formed with easier conditions compared to public companies, without the need for underwriting and attracting a portion of capital from the public. The commitment to pay capital by shareholders is recorded in a meeting where each person officially states the amount of capital they are willing to pay immediately.
– Important components of a private joint stock company include the decision-making body (the general assembly), the administrative body (the board of directors), and the controlling body (the inspector or inspectors).
– The structure of private joint stock companies is designed for a larger number of shareholders and larger investments, as the management system of these companies is suitable for organizing a large number of participants.
Public Joint Stock Company
– A public joint stock company is formed with a large number of individuals, and its shareholders can also be ordinary people. In this type of company, there is one CEO and the remaining members are members of the board of directors, and there is no requirement for them to be shareholders. Forming a public joint stock company is possible for anyone, and in choosing its type of activity, there are no restrictions.
– In addition, the capital of these companies is provided by buying and selling shares on the stock market. The founders of the company enter their shares in this market and sell them to ordinary people. Therefore, all debts and liabilities of the company will affect the value of its shares in the stock market.
– An important point public joint stock companies is that the date of registration must be announced to the public for buying and selling shares on the stock market after the publication of the company’s establishment advertisement on a specific date.
– It should be noted that anyone who purchases shares in a public joint stock company is considered a shareholder and has the right to vote as a member of the company’s general assembly.
Limited Liability Company
– In Iran, a limited liability company (LLC) is a company that consists of a maximum of 2 members and each member contributes a certain amount as capital to the company.
– In this type of company, one person is designated as CEO, one person as Chairman of the Board of Directors, and the rest of the members are not required to be shareholders.
– The company’s shares are divided among the partners in proportion to their capital, and each of these shareholders takes on defined responsibilities in the company and is responsible for its commitments and debts.
– Any eligible person can establish an LLC.
– The company’s area of activity must be in the field of trade affairs, such as exports and imports.
Proportional Liability Partnership Company
– According to Articles 183, 184, and 185 of Iran’s Trade Code, a relative commercial company is a company whose partners’ liability is proportional to the amount of capital they have in the company.
– The personality of the partners is essential in this type of company, and members must agree on important and fundamental matters. It is noteworthy that if partners decide to transfer their shares, other shareholders must declare their consent. If a new partner joins the company to increase capital, they will share the company’s debts based on this principle.
– In these companies, partners are not allowed to compete with the company. No partner is allowed to establish a business similar to the company’s business without the consent of the other partners, nor are they allowed to manage another company with a similar business.
– The partners’ liability is proportional to the capital they have contributed to the company. This means that if the company is dissolved, and the company’s assets are not sufficient to pay its debts, each partner’s liability in the company will be in proportion to their capital in the company, which is called proportional liability.
– The management of these companies is usually done by the partners, and the regulations related to management are exactly the same as those in general partnership companies.
– At least one person is selected as the manager in these companies, and his or her responsibility is similar to that of a lawyer to their client.
– The manager’s powers are mentioned in the articles of association.
– If the company incurs a loss as a result of the manager’s actions, and the action is within their power, the manager is not responsible for it. However, if that action is not part of the manager’s powers, the manager is responsible for the loss.
– In this type of company, there are no restrictions on who can be employed as a manager.
General Partnership Company
– A general partnership company is formed by two or more people.
– All of the partners are responsible for the company’s commitments and debts if the budget is insufficient.
– Anyone can establish a general partnership company, and that person must guarantee the company.
– Since the duties of this company are very heavy, not everyone (individuals and legal entities) is interested in establishing it unless their type of activity requires such registration.
– The partners of these companies are adults who are not necessarily in the field of trade.
– One of the important reasons for choosing and registering a general partnership company by some individuals or legal entities is that they want to gain the trust of customers. Also, customers can receive necessary assistance from real persons in the company to solve any problems they face.
Mixed Joint Stock Partnership Company
– A mixed joint stock partnership company is a company formed by one or more guarantee partners and one or more stock partners.
– This type of company is a combination of joint stock and general partnership companies.
– The stock partner is responsible for the company’s commitments and debts to the extent of their shares, while the guarantee partner is responsible for all possible debts that the company may incur. Both partners are subject to the relevant laws.
They have three types of general assemblies:
1. Founders’ General Assembly
2. Ordinary General Assembly
3. Extraordinary General Assembly
Note: The Ordinary General Assembly does not have the right to elect managers because the management of the company is solely the responsibility of the shareholders.
Limited Partnership Company
– In fact, this type of partnership is only used in special circumstances. For example, elite individuals who have creative ideas for producing new products or services can use this format. They can find investors and bring their ideas to the production stage.
– However, it should be noted that gaining mutual trust in this partnership is not an easy task. If both parties are honest, this is a win-win partnership.
A limited partnership company is composed of two groups of partners:
Guarantor partners: For the establishment of a limited partnership company, the presence of at least one guarantor partner is mandatory. Guarantor partners are actually the capital providers of the company. They jointly take responsibility for all the company’s obligations.
Partners with limited liability: Partners with limited liability do not have the right to intervene in the company’s executive affairs. They can only supervise the company’s affairs.
Production & Consumption Cooperative Company
– Production & consumption cooperative companies are formed by a group of individuals who have a similar profession or relationship, such as neighbors, friends, relatives, or citizens, to achieve common interests.
– They establish a cooperative to obtain housing, purchase necessities, or obtain credit and loans.
– The function of this type of company is such that, for example, each member pays a small amount to purchase the required goods, and then the company purchases the necessary goods firsthand and sells them to the members at the same price or with a very small profit. In this way, unnecessary intermediaries in business and owners of such fake businesses are eliminated.
– In the cooperative, members may not have equal capital and share in profits, but each member has one vote regardless of their share percentage, and the proportion of shares to votes does not exist. In fact, the cooperative relies on its members, not on capital.
Production Cooperative: A company that engages in agricultural, livestock, poultry, fishery, aquaculture, industry, mining, urban and rural construction, tribal affairs, and similar activities, and manages a production unit.
Distribution Cooperative: A company that operates in the procurement and distribution of goods, housing, services, and other members’ necessities.
– The category of cooperative companies that are both production and distribution is called a production and distribution cooperative.
– Production cooperatives, such as farmers, beekeepers, industrial owners, and other groups mentioned in the production category, are considered to be supply cooperatives (providers of producers’ needs) if they form a cooperative to meet their own needs.
General Cooperative: Membership in this type of cooperative is open to all individuals, and the number of members is at least 500. Also, the founders of the company can sell shares of the company to the general public to provide some or all of the initial capital.
Special Cooperative: Membership in this type of cooperative is only allowed for a specific group of people, such as students, farmers, doctors, workers, engineers, and other specific professions. It should be noted that membership in these types of cooperatives is not subject to any restrictions, and the company is obliged to accept qualified applicants.