IRAQ Law and Practice Contributed by: Ahmed Al-Janabi, MENA Associates in association with AMERELLER
Implications In the absence of legal provisions, buyers must negotiate with non-tendering shareholders on a case-by-case basis if they wish to acquire their shares. 6.11 Irrevocable Commitments Iraqi law does not allow obtaining irrevocable commitments from principal shareholders to tender or vote in a particular manner.
If the buyer is a legal entity, financial statements (whether pro forma or otherwise) must be pro - vided. These financial statements must be prepared in accordance with the unified accounting system used in Iraq, ensuring consistency in financial reporting. This framework ensures that only relevant enti - ties are held to these disclosure standards, in line with Iraqi accounting practices. 7.4 Transaction Documents Disclosure of Transaction Documents For a share transfer in Iraq, full disclosure of the transaction documents is required. The following documents must be disclosed and filed with the Companies’ Registrar:
7. Disclosure 7.1 Making a Bid Public Public Disclosure of a Bid in Iraq
Under Iraqi law, the share transfer process does not involve a traditional tender or bid approach. Instead, the transaction is made public when the share transfer is filed with the Companies’ Registrar. This filing date marks the official dis - closure of the bid. 7.2 Type of Disclosure Required Disclosure Requirements for the Issuance of Shares in a Business Combination In cases where mergers lead to the issuance of new shares, a full disclosure of all financial, legal and administrative records by the par - ties is required. This comprehensive disclosure ensures transparency and supports the due diligence process for regulators, investors and other stakeholders. 7.3 Producing Financial Statements Financial Statements in Disclosure Documents In the context of a share transfer in Iraq, disclo - sure obligations differ based on the legal status of the parties. Financial statements are required only from legal entities rather than natural per - sons.
• Share Transfer Resolution; and • Share Purchase Agreement.
8. Duties of Directors 8.1 Principal Directors’ Duties
Directors are primarily responsible for managing all aspects of the company, including its legal, administrative and financial affairs. Their role is to ensure the smooth operation and governance of the company during the business combina - tion process, namely: • management of company affairs – directors must oversee and manage all facets of the company’s operations, ie, legal, administra - tive and financial; and • reporting obligations – directors report exclusively to the direct shareholders of the company, rather than to all stakeholders.
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