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In addition to companies that do commercial, the legislator has foreseen a specific legal entity with a legal personality to carry out non-commercial activities such as scientific and literary work or charitable or service affairs. The article defines a nonprofit institutions’ reform code for the registration of non-commercial organizations and institutions:

"The purpose of the non-commercial organizations and entities referred to in Article 584 of the Commercial Code is to establish and register for non-commercial purposes, such as scientific affairs, or charitable matters, whether the founders intend to profit Or not. "

Therefore, the presentation of scientific, educational and municipal services and the presentation of humanitarian assistance are in the form of legal personality, therefore, non-commercial enterprises are divided into two types:

Institutions whose purpose is not to attract interests and not to divide them among its members are called nonprofit institutions. All social activities such as Islamic, specialized and scientific associations and political parties, charities and funds are considered in the form of such institutions, and its founders, at the request of the register request, are introduced by the Companies Registry Office to the Police General Information Office for inquiring, and after receiving a positive response, it will be brought to action.

Institutions whose purpose may be to seek financial benefits and to divide such benefits among its members or non-members are called non-commercial institutions. Therefore, activities such as scientific and technical institutions, language institutes, nonprofit schools, gas supply companies, or the presentation of urban services such as cleanliness and greenery and other things in the above areas are in the form of non-commercial organizations, and the founders must, after registering the institution take necessary actions in order to obtain the required licenses.

Classification of all companies:

Civil companies

Commercial companies


Civil Company:

In the Civil code, the company has one general meaning and one specific meaning. The general meaning of the company is a contract by which the two parties accumulate their capital or work to achieve a certain profit. In addition to the contract of the company, which is the subject of Articles 571 to the Civil Code, mutual finance contracts, agricultural contracts and irrigation contracts are also considered a company base activity. In special meaning, the company is a certain contract, with the propagation of property rights. Usually, when it comes to civil rights, this is the purpose of the latter.

By virtue of the Article 571 of the Civil Code: "The company is a community of rights of multiple owners with a single object and propagation." The company may be arbitrary or mandatory (Article 572 of the Criminal Code). The company is not based on the agreement of the partners, but the result of the association of the owners' rights, which causes the merger or inheritance (Article 574 BC). Conversely, the arbitrary company is the result of the will of the parties because "it is created either as a result of a contract of an agreement or the result of the action of the partners, such as the volitional acceptance or acceptance of financial which is to say the free operation of several individuals and their methods"(Article 573 of the Criminal Code).

It is understood from the consideration of Article 571 of the Civil Code that the company is a state of affairs; a number of persons who are co-owners of a single property, that is, each is owner of any single component. This item of joint ownership is not mentioned herewith and may be either due to the will of the partners or to be achieved compulsorily.

What attract the attention in the Civil Code is that the joint ownership of any contract that creates such a situation, and is not exclusively a contract with the name and title of the company, that is, a contract with which the parties agree, may depose their own proprietary rights and create a joint ownership. As Article 573 of the Civil Code says, an optional company may be the result of a contract of the contracts, e.g. an owner sells half of his own property, or agree or munificent it. Such examples bring about joint ownership (Company) for the truth of the contract, which has the name "sale" or "agreement" or "munificence", not a contract for the name of the company.

According to the jurisprudence and Iran civil rights, there are uncertainties about the existence of an independent contract for the name of "Company". Few of the authors deny the existence of this contract. Their conviction is that the company is the result of the merger and propagation of ownership and this result may either be derived from one of the specified contracts (which are not included in the company) or, on the contrary, some other group has considered originality for the company. This group considers the company's contract to create an effective dissemination and has specified it along with sales, agreement and exchange. It seems that the civil law has adopted the same opinion; even regarding the company among the issue of the specified contract.

Presently, the prevailing opinion is: the community of ownership of multiple entities for a single object can lead to a contractual arrangement. The contract is defined as "an agreement made between two or more persons, upon which two or more persons share their rights for jointly seizing and dividing profits and losses, and sometimes share their rights for other purposes in order to be the sharing owner of the complex." In this definition, the contract is separated from simple dissemination, and the specific company pursues it for a particular purpose, and can either be used to divide the financial gain or to have a moral or social aspect such as helping the deprived and encouraging scientists and researchers.

It should be asked whether this definition can be applied for the company in the sense of the commercial code. The answer, of course, is negative, but the negation of the definition is not an absolute one; as we will see, some of the elements of the definition are also to be found for the current company definition. What to say is:

 Firstly, the company's commercial concept is merely profit sharing and dividing among its partners. Therefore, here is an organization for moral and social goals, such as the establishment of the so-called "association", are not considered a commercial enterprise.

Secondly, in a civil society, the personal relationship of the partners does not disappear; thus, the commercial partnership is the collective personality of the partners, who is the owner of the property as the "legal personality". Here, a civil society is assumed to be monetized. In a civil company is assumed that the property of the partners belong to themselves, and the profits and losses arising from the management of the company are their own responsibility; however, as we will see, The trading company is a legal person and the property, which is gathered by the partners, belongs to the company, that is, a legal person. But how can a commercial company be recognized by a civil company? We answer this question by defining the commercial firm (in the second section).


Commercial company:

As we previously said, the Iranian commercial code does not define a commercial company, and Article 20, the first chapter of which begins with Section III of the Commercial Code, only counts the various types of trading company.

The reason for the silence of the Iranian legislator is that the commercial code of France, which is the pattern of our commercial code, has not defined it either; but the silence of the French commercial code is justified because its civil law in Article 1382 defines the company and the legislator of France has not found necessary to repeat it in the commercial code, while the imitation of the Iranian legislator has created a legal vacuum because of the fact that what our civil code defines is a company different from the principle of company and the commercial code. Here, our company is rooted in European law. In civil rights, the company firstly relies on the rules of jurisprudence.

About definition of commercial companies, the prime professors have given different answers. Opinion and viewpoint of Dr Sotoudeh Tehrani: "A commercial enterprise is an organization formed between two or more individuals and each share is made in cash or by goods or work, in order to engage in commercial operations and bring benefits and losses and divide between themselves. "This definition has two major flaws, both of which are derived from the provisions of the Commercial code and the corporate law bill of the year 1347. The first drawback is that the company is viewed not as a contract but as an institution and organization (a legal person), whereas the company firstly has a contract. Another disadvantage is that the company is considered to be the only institution or organization that engages in commercial operations, but we know that the company is considered to be a commercial enterprise solely in the form of companies established in Article 20 of the Commercial Code, even If perform non-commercial activities. Article 2 of the 1347 corporate law bill for a joint-stock company provides: "A corporation is a trading company, even though it is not the subject of its commercial operations." Of course, since the definition of Dr. Sotoudeh Tehrani has been presented before the adoption of the new bill, the second drawback is only for the “definition” and should not be carried over to its lack of knowledge.

Dr. Mansour Sakheri also has a scholarly essay, and after examining the different materials of the law of commerce, he has defined the company as follows: "A company is a covenant by which two or more parties agree to bring in assets for the purpose of dividing their potential benefits jointly ". This definition has three drawbacks:

First, contrary to the definition of Dr. Sotoudeh Tehrani, here, the company is not considered an institution, but it is only referred to as a contract. As we said, the company is a contract. But the company has another meaning. The assets of the partners are collected in order to form an independent property out of their personal assets, and this property is dedicated to the company being created to accomplish it, and that is why this is the legal person who is the same company. . The study of commercial laws and regulations indicates that these regulations are considered to be a legal person rather than a contract.

Secondly, this definition only mentions the "division of potential benefits," while we are certain that partners also share potential losses.

Thirdly, the condition of the commercialization of a company is the commercial operation of the company; whereas a commercial company may, for its sort, be considered a commercial, even if it carries out non-commercial activities.

The fact is that in Iranian law, a commercial company is a company which is formed or registered in accordance with the provisions of the Commercial Code, or under the law of 1347, or otherwise; but conducts commercial operations. While if the company is one of the companies under Article 20 of the Commercial Code, it is then considered to be a commercial entity, even if it carries out non-commercial transactions (such as Article 2 of Law Bill 1347 for the registration of public corporations), and sometimes it is not possible to set up a commercial company, unless the subject is commercial (as applies for the relative and partnership corporate). Article 220 of the Commercial Code also recognizes and registers companies that do not include those companies listed in the Commercial Law but do commercial works as partnership, which is a sort of commercial companies.

A commercial firm can be defined as follows: "A commercial enterprise is a contract by which two or more parties agree to create an independent capital that is made up of their assets and dedicate to an institution which is established for the purpose of a specific target, and to share in the potential benefits and losses of capital utilization.

Let's clarify the concept of this definition by describing the characteristics of the commercial company, which is the subject of the second part of this chapter.