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Notes on the amendment of the Companies Law No. 21 of 1997 by the Coalition Provisional Authority DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

Notes on the amendment of the Companies Law No. 21 of 1997 by the Coalition Provisional Authority

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Notes on the amendment of the Companies Law No. 21 of 1997 by the Coalition Provisional Authority Empty Notes on the amendment of the Companies Law No. 21 of 1997 by the Coalition Provisional Authority

Post by claud39 on Tue Mar 05, 2019 9:27 am


[size=36][rtl]Notes on the amendment of the Companies Law No. 21 of 1997 by the Coalition Provisional Authority[/rtl][/size]

Sunday 03 March 2019

Notes on the amendment of the Companies Law No. 21 of 1997 by the Coalition Provisional Authority Alsabaah-7498

Prof. Mohamed Helou El-Khorsan

It is well known that the stability of the laws of great importance, especially those of interest to a large number of stakeholders, the importance of consistency in the clarity of the paragraphs of those laws and deal with them on this basis, both as regards the general conditions and the basic requirements for the establishment of companies as far as the law of companies which We are going to talk about it, as well as the capital increase or reduction or accession and withdrawal partner, as well as the nature of tax accounting and tax rate for each type of companies.

However, the importance of steadfastness to the laws referred to does not mean stagnation and stagnation of these laws and not to modify them in proportion to the accelerating changes in the surrounding environment in general and economic and financial ones in particular. Thus, the amendment of the laws achieves the desired goal which focuses on the general interest of the state and citizens without prejudice or negative impact. On stakeholders directly involved in that law.

In Iraq, the former Companies Act was Law No. 36 of 1985, but there are positive reasons for its time which led to the replacement of the previous law by the current law No. 21 of 1997, and this law was amended by the Coalition Provisional Authority (represented by Paul Bremer) Change in Iraq 2003.

However, it is noted that this amendment did not take into account the interest of the Iraqi state directly, but was aimed at serving foreign capital at the expense of national capital. The amendments also aim to achieve the investor's desire to achieve profits without considering the public interest and the type of activity and the extent of its agreement with development plans and the need of the Iraqi market Activity, the purpose of the amendment can be inferred when you know it has been very quickly after the change in Iraq.
The most important amendments to the law and its purpose will be reviewed in comparison to the text of the legal article that has been suspended or amended.

Article (1) The old text (this law aims at organizing and documenting companies and developing their activities according to the requirements of development plans and requirements of the stage of socialist construction).
Revised Text (This law aims to: 

1. Organization of companies.

2. Protection of creditors against fraud. 

3. Protecting shareholders from conflicts of interest and from misbehavior of Company officials and owners of the majority of shares in them and controlling their affairs effectively. 

4. Promote the provision of full information to owners regarding decisions affecting their investments and their company.

We note that the focus is on the protection of creditors and shareholders and providing information to them without interest (by organizing and developing the activity of companies in accordance with the plans of development and socialist construction), and by the way that the Coalition has removed the term or the word Socialist from all paragraphs of the amended law, and seems to think that this is a residue and ideas The former regime without realizing that it is an important sector within the organization of companies and businesses in Iraq.

Article (2) has been suspended.

• The old text of the article:

The objectives of the law are fulfilled according to the following principles: 

• Encouraging the investment of national capital in companies and supporting and sponsoring them according to the controls and indicators of development plans and planning decisions.

• Second, to regulate the activity of companies in order to ensure their role in the planned economic development.

The question is whether it is in the interests of the Iraqi state and people to suspend the article that calls for encouraging national capital and controlling the activity of companies within the planned economic development. Or, what is important for the Coalition Authority is foreign capital and the activity in any field, whether important or unimportant to Iraq As much as it is important to make profits for the foreign owner of the funds.

• Article (12) Amended Text:

First, a natural or legal person, an alien or an Iraqi, has the right to acquire membership in the companies provided for in this law as the founder thereof, holder of shares or a partner thereof, unless such membership is prohibited by law or as a result of a decision issued by a competent court or entity Authorized government. 

• II.
• III.
Ancient text of the article:

First: The Iraqi has the right to acquire membership in the companies stipulated in this law, founders, shareholders or partners, unless he is forbidden to his person or his status, from membership of companies under a law or decision issued by the competent bodies in the State.

Second: Citizens of Arab countries who are residents of the Arab countries shall treat the treatment of Iraq in respect of the acquisition of membership in the Iraqi companies contributing and limited, taking into account the laws in force. 

Thirdly, moral persons, whether public or private, may not acquire membership in an Iraqi company unless they also enjoy Iraqi nationality.

 It seems clear that the amendment is intended to be equal between the Iraqi and the foreign in the right to acquire membership of the company, as well as the suspension of the text on the inadmissibility of acquisition of non-Iraqi personalities membership in Iraqi companies, and as a result that became the major banks belonging to other countries involved in banking companies in Iraq has made huge profits through the conversion of foreign currency outside Iraq, and the same talk is said for the telecommunications companies, transport and extraction and others.

• Article (13) The amended text

The founders shall sign a contract for the company signed by them or by their legal representatives. The contract shall include a minimum of: 

First: The name of the company and its type. The name of the company shall be added to the name of the company if it is a mixed sector company, and any other acceptable elements shall be added to its name.

Second: the main headquarters of the company, to be in Iraq. 

Third, the purpose for which the company was established, and the general nature of the work to be performed. 

Fifth: The company's capital and its division into shares or shares

Sixth - How to distribute profits and losses in the companies of solidarity

Number of elected members of the Board of Directors of the Private Shareholding Company 
Names of the founders, their nationalities, occupations, permanent residences and the number of shares of each or any amount 

His share.

When looking at the old text of the article and specifically in the third item and item IV, which has been suspended, we note:

• The old text of the article:

• The founders shall prepare a contract for the company, signed by them or their legal representatives, containing: 

First - the name of the company derived from its activity, mentioning its type with the addition of a mixed word if mixed and the name of one of its members at least if it was a solidarity or an individual project, and it is possible to add any acceptable name if the contribution or limited. 

• Second - the main position of the company to be in Iraq 

Third: The company's objective is to confirm its role in developing the national economy according to development plans 

• The company's activity derived from its objective, provided that it is within one of the economic sectors and any other sectors related to its activity 
Where we find that the first item was modified linking the name of the company derived from its activity, while this was canceled by the amendment and I mean the purpose of this is clear.
In the third item was canceled the goal of the company confirmed its role in the development of the national economy and here also raises the question of the goal of the abolition of that and why the Coalition Authority is keen on the amendment on the exclusion of companies from the development of the Iraqi economy and to the health of the amendment.

The same is said for the fourth item, which was suspended under the amendment, noting that it indicates the need to agree the activity of the company from its goal, which is supposed to be within one of the sectors 
Economic development.

It is clear from the foregoing the keenness of the Coalition Authority in amending the Companies Law to ensure that the companies under this law are distilled from their important role and activity in building the Iraqi economy. It seems from the foregoing that this was a reason to object to Article 14 in the federal budget law for the year 2019 and not to oppose the participation of the Iraqi private sector known nationalism and the safety of goals and concern for the public interest.
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