An online shop and selling on social media: registration and obligations

Selling through a page or a shop on the internet or on social media does not, if the character of a merchant is present, take the activity outside the Commercial Law, or outside entry in the register or the formation of a company. The framework is on registering a company. The Law Office of Ali Barakat follows the question from Baghdad, al-Yarmouk.

The character of a merchant and registration

Article 7 of Commercial Law No. 30 of 1984 treats as a merchant every natural or legal person who, in that person's name and for that person's account, carries on a commercial activity by way of profession under this Law. The commercial acts article 5 lists include, if they are carried on with a view to profit, buying property in order to sell it, supplying goods and services, advertising, and the other acts the article names. If that profession and that purpose are present, the fact that the offer is made through a telephone or a platform does not prevent the character of a merchant from applying, or the duty to record the name in the commercial register, adopt a trade name and have a place for dealings, under article 9, as set out on the commercial register and the chambers. If a company form is chosen, formation remains before the Registrar of Companies under the Companies Law.

The Commercial Law, the Companies Law, the Consumer Protection Law and the Electronic Signature Law do not create a separate licence under the name "social-media shop" or "online-shop permit". What is required in a particular file is read from the text that applies to it. The existence of a page on a platform does not stand in for registration if the character of a merchant or the form of a company applies.

Consumer protection and advertising

Consumer Protection Law No. 1 of 2010 applies to a person who sells, markets or advertises a good or a service, under article 3 of that Law, and the advertiser includes a person who promotes by any means of advertising. Fraud, misleading conduct and concealment of components or of the date of validity are prohibited, under article 9. Article 7 requires that a good that does not meet standard specifications not be promoted, and that the trade name and address be stated on correspondence, printed matter and advertisements. An offer through a social-media means remains advertising in this sense. The detail is on consumer protection and advertising.

Electronic transactions

Electronic Signature and Electronic Transactions Law No. 78 of 2012 applies to electronic transactions carried out by natural or legal persons, and to transactions the parties agree to carry out by electronic means, under article 3, first paragraph, subject to the exclusions in article 3, second paragraph, which are read from that paragraph of the text itself. The evidential force of an electronic signature is read from articles 4 and 5, on the evidential-force page. An agreement to use an electronic means does not stand in for recording the merchant or forming the company if those are required, or for the consumer's rights to information and to a guarantee.

The office follows a reading from Baghdad, al-Yarmouk.

Legal basis and sources

1. Commercial Law No. 30 of 1984, articles 5 and 7
2. Consumer Protection Law No. 1 of 2010 (Iraqi Legislation Database)
3. Electronic Signature and Electronic Transactions Law No. 78 of 2012

Frequently asked questions

Related topics and articles

• 01Recording an individual merchant in the commercial register and at the chamber of commerceAn individual merchant is recorded in the commercial register at a chamber of commerce, distinct from company registration with the Registrar.
• 02Consumer protection and company advertisingConsumer protection and company advertising under Consumer Protection Law No. 1 of 2010 and the Consumer Protection Council.
• 03The evidential force of electronic contracts and signatures for companiesEvidential force of electronic contracts and signatures for companies under Law 78 of 2012, distinct from contract-drafting pages, with no unnamed court.
• 04Obligations that recur after a company is recordedFinal accounts, the audit, the general-assembly meeting and copies sent to the Registrar, distinct from post-incorporation steps and from branch duties.
• 05The address of a company or branch, a lease and a title deedThe company's address in its contract, before the Registrar and in the commercial register; a lease or deed may evidence it. Not a real-estate page.

Always check the text in force and its amendments in the official source.

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