Mixed Companies
In certain situations, companies decide to merge and form a new type of business entity. In such cases, a capital-based company and a general partnership combine to form a mixed company. As a result, one or more general partners and one or more limited liability partners participate in the company, each holding a share in the business.
Concept and Definition of Mixed Companies Under Iranian Law
What Is a Mixed Joint Stock Company?
Mixed joint-stock companies derive characteristics from both capital-based companies and partnerships. According to the Commercial Code, only a limited number of companies fall within this category. In essence, both mixed joint-stock companies and mixed non-joint-stock companies combine the legal features of general partnerships, joint-stock companies, and limited liability companies.
Types of Mixed Companies
Mixed companies are classified into two types: mixed joint-stock companies and mixed non-joint-stock companies, as explained below.
Mixed Joint Stock Company
A mixed joint stock company is formed by several shareholders and one or more general partners. The shares of the shareholders are of equal value, and their liability is limited to the amount of their capital contribution. Persons whose participation is not represented by shares are considered general partners. These partners are jointly and severally liable for the company’s debts exceeding its assets, and their legal relationship is governed by the rules applicable to general partnerships.
Documents Required for Registration of a Mixed Joint Stock Company
- An approved copy of the articles of partnership.
- An approved copy of the articles of association.
- Names of the directors or the managing director.
- A written declaration confirming full subscription of the capital and payment of at least one third of the capital, signed by the managing director.
- Certified records of resolutions of the general assembly in accordance with Articles 40, 41, and 44.
- A written declaration confirming full payment of cash contributions and delivery of non-cash contributions by general partners, signed by the managing director.
Shareholding Partners
Shareholding partners are individuals whose capital is divided into shares or assets of equal value. Their liability is limited to the capital they have contributed to the company, and they bear no further financial responsibility beyond that investment.
General Partners
General partners are individuals whose participation is not represented by shares but by partnership interests. They are liable for all debts of the company that may arise beyond the company’s assets, where there is more than one general partner; the applicable laws and company regulations govern their internal relations.
Company Name
Pursuant to Article 162 of the Commercial Code, a mixed joint stock company is formed under a specific and designated name by one or more shareholders together with one or more general partners.
Dissolution of Mixed Joint Stock Companies
A mixed joint stock company may be dissolved under the following circumstances:
- When the company fails to achieve the purpose for which it was formed, or when achievement of that purpose becomes impossible.
- When the company was established for a fixed term, and that term has expired without renewal.
- In the event of bankruptcy.
- When the articles of association grant the general assembly the authority to dissolve the company, and the general assembly makes such a decision.
- Upon the death or legal incapacity of any partner in accordance with the articles of association.
- By decision of the general assembly with the consent of all general partners.
Mixed Non-Joint Stock Companies
Mixed non-joint stock companies are formed for commercial activities by one or more limited liability partners together with one or more general partners. No shares are issued in these companies. The general partners are liable for all company debts that exceed the company’s assets, while limited liability partners are responsible only up to the amount of their contributions.
In such companies, general partners operate like general partners in general partnerships, while limited liability partners are treated in accordance with the rules governing limited liability companies.
Documents Required for Registration of a Mixed Non-Joint Stock Company
- An approved copy of the articles of partnership.
- An approved copy of the articles of association, if any.
- The company name and the names of general partners who hold managerial authority.
Management of Mixed Non-Joint Stock Companies
In mixed non-joint-stock companies, management is exercised exclusively by the general partners. The scope of their authority is governed by the same rules applicable to general partnerships. Limited liability partners have no role or involvement in the management of the company.
Dissolution of Mixed Non-Joint Stock Companies
The dissolution of mixed non-joint stock companies follows the same legal principles applicable to the dissolution of mixed joint stock companies. Accordingly, these companies are dissolved upon the occurrence of the conditions set forth above.
Frequently Asked Questions About Mixed Companies
A mixed company is a business entity that combines features of capital-based companies and general partnerships. It exists in two forms: mixed joint-stock companies and mixed non-joint-stock companies.
It is formed by several shareholders and one or more general partners. Shareholders have limited liability equal to their capital contributions, while general partners are liable for debts exceeding the company’s assets.
Required documents include approved articles of partnership, articles of association, director information, capital payment declarations, records of general assembly resolutions, and evidence of payment of cash and non-cash contributions.
Shareholders are liable only up to the amount of their investment, whereas general partners are liable for all company debts beyond the company's assets.
It is a company formed without issuing shares, consisting of one or more general partners and one or more limited liability partners, where general partners manage the company and bear unlimited liability.
Dissolution occurs upon failure or impossibility of the company’s purpose, expiration of its term, bankruptcy, death or incapacity of partners, or by decision of the general assembly with the consent of all general partners.
They are managed solely by the general partners, while limited liability partners have no managerial authority and are liable only to the extent of their capital contributions. What is a mixed company, and what types exist?
How is a mixed joint stock company formed?
What documents are required to register a mixed joint stock company?
What is the difference between general partners and shareholders?
What is a mixed non-joint stock company?
Under what conditions are mixed companies dissolved?
How are mixed non-joint stock companies managed?
