Commercial Law in Iran
The current Iran Commercial Law has been ratified before the Islamic Revolution on May 3rd, 1932 and consists of sixteen chapters. Since merely the chapters 1, 2, 4 and chapter 6 up to 9 of the Iran Commercial Law would be discussed in this paper, the other chapters would be discussed under Incorporation law.
Chapter one of the Iranian Commercial Law
The first chapter is dedicated to the definition of merchants and commercial transactions that clarifies the constituting elements of a merchant and explain how a transaction should be considered as a commercial transaction.
Who is the merchant and could be the subject to the Iran Commercial Law?
Commercial Law in Iran
In accordance with Article 1 of the Iran Commercial Law, a merchant is a person whose ordinary engagement is commercial transactions. By considering the presented definition, both natural and legal persons would be considered as a merchant which means that the managers or managing director of the companies wouldn’t be recognized as the merchant as they work on behalf of and in the name of the company.
Furthermore, in the case that either a natural or legal person considered as a merchant, he/she should be obliged to register his/her name in the registration office and having commercial books as well as declaring the bankruptcy but the recognition of a person weather natural or legal as a merchant should be on the own discretion of the court.
What is the Commercial Transaction?
Articles 2 and 3 of the Iran Commercial Law identifies Commercial Transactions. In this regard, in general, there are two kinds of transaction which should be recognized as a commercial transaction:
- The inherent commercial transaction in which it is not important if conducted by a merchant or not. Therefore everybody should be authorized to conduct that actions as commercial transaction such as Purchase or acquisition of any kind of movable property, for the purpose of sale or hire, whether in its original state or not, Transport business of any kind by land, sea or air, Business connected with auctions, etc.
- The transactions named subordinated Commercial transactions in which one or both of the contracting parties are merchants.
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