Fatemeh Rakideh
trainee lawyer at the Iranian Central Bar Association
Transfer of shares and capital interests in Iranian companies

Transfer of shares and capital interests in Iranian companies

Transfers of shares and transfers of capital interests are not legally identical. The company type, form of capital, articles-of-association restrictions, required consents and transfer documents determine the transfer’s validity and whether it can be relied upon.

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Transfer of shares and capital interests in Iranian companies

Transfers of shares and transfers of capital interests are not legally identical. The company type, form of capital, articles-of-association restrictions, required consents and transfer documents determine the transfer’s validity and whether it can be relied upon.

Important aspects of this matter

Point 1

Identifying the type of company and whether the matter concerns transfer of shares or transfer of a quota interest in a limited-liability company.

Point 2

Review of the articles of association, company agreement, and transfer restrictions

Point 3

Verification of ownership, Number or amount of shares and status of related obligations

Point 4

Preparation of transfer documents and carrying out the necessary registration formalities

Documents and legal decisions concerning transfers of shares or capital interests

Legal points and course of action

Under Articles 102 and 103 of the Iranian Commercial Code, transfer of a quota interest in a limited-liability company to a third party is subject to statutory conditions and must be made by an official instrument. For joint-stock companies, the type of shares and statutory or articles-of-association restrictions must be analysed separately.

In every case, compare the company’s current registration records, internal documents and actual events. Similar case labels do not mean that the relief sought, opposing party or legal outcome will be the same.

Related topics

Frequently asked questions

Shares are used in joint-stock companies, whereas a limited-liability company’s capital is divided into capital interests. The transfer formalities and restrictions differ.
The Iranian Commercial Code requires an official instrument for transfer of a quota interest in a limited-liability company. For transfer to a third party, the conditions for the partners’ consent under Article 102 must also be examined.
In some types of companies and depending on the law, the articles of association may impose restrictions on the transfer of shares. The type of company and the precise provisions of the articles of association must be examined.

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