IRAQ Law and Practice Contributed by: Ahmed Al-Janabi and Sarmad Akrawi, MENA Associates in association with AMERELLER
Unless otherwise expressly indicated, referenc - es to any law, instruction or regulation is a refer - ence to such a statute as applied in Federal Iraq. Limited Liability Company An LLC may be established by a maximum of 25 shareholders. There is no minimum require - ment. The shareholders may be legal entities or individuals, or a combination of both. The general assembly of shareholders appoints and determines the powers of the managing director, who may be a foreign national. The minimum capital for an LLC is IQD1 million. Any public subscription of shares in an LLC is prohibited. Joint Stock Company A mixed or private JSC is founded by at least five shareholders, and their liability is limited to the amount payable on their shares. The general assembly of shareholders elects the board of members which governs the JSC. The board of a private JSC is composed of a mini - mum of five and a maximum of nine members. The board of members then elects the chairman and deputy chairman from among its members. The liability of the board of directors is the same as that of the managing director of an LLC. The minimum share capital of a JSC is IQD2 million. Unlike an LLC, part of the shares of a JSC must be offered to the public for subscrip - tion. The public subscription must be complet - ed before a certificate of establishment can be issued. Insurance and financial investment companies are required to register as JSCs.
Other possible entities under the Companies Law include the following. • General Partnership: A general partnership is an association of two or more persons who are jointly and severally liable for partnership debts. The minimum capital requirement is IQD50,000. • Individual Enterprise: An individual enterprise consists of one natural person who owns the single share and is personally liable for the enterprise’s debts to the full extent of his personal assets. • Simple Company: A simple company is established by a minimum of two and maxi - mum of five partners. The partners may also contribute to capital through services. The establishment process is, as the name sug - gests, extremely simple. • Holding Company: The holding company may be in the form of a JSC or LLC, and has control over one or more JSCs or LLCs. The holding company was introduced as a permissible type of company under the newly amended Companies Law. Branch of a Foreign Company A common registered entity is the branch of a foreign company. It should be noted that the commercial activity of the branch is limited to the registered activity of the foreign company. The foreign company would also be liable for any liabilities of the branch. The registration requirements for branches in Iraq are stipulated in Regulations No (2) of 2017 on Foreign Com - panies’ Branches. For the registration of a branch in Federal Iraq, the foreign company must have been estab - lished at least two years earlier. Any managerial changes must be approved through a sharehold - ers’ resolution by the parent company.
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