Fatemeh Rakideh
trainee lawyer at the Iranian Central Bar Association
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increase or reduction of an Iranian company’s capital

increase or reduction of an Iranian company’s capital

An increase or decrease in capital can change the ownership structure,, the percentage of participation and the financial rights of individuals. The decision-making method and its formalities depend on the type of company and the origin of the capital change.

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increase or reduction of an Iranian company’s capital

An increase or decrease in capital can change the ownership structure,, the percentage of participation and the financial rights of individuals. The decision-making method and its formalities depend on the type of company and the origin of the capital change.

Important aspects of this matter

Point 1

Company type and current registered capital

Point 2

Origin of increase or cause of decrease and its effect on the ownership of individuals

Point 3

Competent authority, The quorum for the decision and the possible rights of the partners or shareholders

Point 4

Preparing the minutes and carrying out the relevant registration and financial formalities

Legal documents and decisions related to increase or reduction of an Iranian company’s capital

Legal points and course of action

In joint-stock companies,, the increase and decrease of capital is subject to the special rules of the law amending part of Iranian Commercial Code («قانون تجارت»). In other companies, the company's regulations and documents must be observed in accordance with the type of structure.

In each case, the latest company registration status, internal documents and actual events must be matched. The similarity of the titles of the two cases does not mean that the demands, of the parties to the dispute or their legal outcome are the same.

Related topics

Frequently asked questions

It is possible. The participation of shareholders or partners in the capital increase and the legal structure of the company determines how the ownership percentage changes.
In some structures and in compliance with the relevant regulations, Capital reduction can be proposed in the exit process; but the method is not the same for all companies.
Capital change is one of the important changes of the company and its decision and registration procedures must be carried out in accordance with the regulations of the type of company.

Methods of contact

Contact us for advice and follow-up of the case through the following ways