When can the Registrar of Companies refuse an incorporation application, and what must the refusal say?

A refusal from the Registrar of Companies is not the end of the road, but it needs a careful read before anyone answers it. The Law Office of Ali Barakat, in Baghdad, al-Yarmouk, explains how Companies Law No. 21 of 1997 limits the registrar's power to refuse, what the decision should spell out, and where the applicant goes next.

Approval is the default

Article 19 opens with a clear rule: an incorporation request is to be approved, and only a breach of an identified provision of the statute justifies saying no. A refusal cannot rest on general discretion or on considerations the law does not mention; it must point to a particular article. The answer, yes or no, is due ten days after the registrar takes in the file. Except for joint-stock companies, the approval itself comes with the incorporation certificate, which is the company's proof of existence, though it is not handed over until the prescribed charges are paid. Joint-stock founders are notified in writing, and their certificate follows the public subscription, under article 21.

What a refusal must contain

Article 24 sets three requirements:

1. The reason must be in writing.
2. It must name the legal provisions the registrar considers breached.
3. It must explain, breach by breach, what happened on the facts.

A decision that just says "the application is incomplete", without naming the article and the fact, does not meet this standard, and that point can itself be raised in an objection.

Where refusals usually come from

Because refusal must be tied to a specific provision, the grounds usually come from the articles that govern what an application contains:

• The company contract: article 13 lists the minimum contents: name and type, a head office inside Iraq, the purpose and nature of the business, capital and how it is divided, how profit and loss are shared in a partnership company, the number of elected board members in a private joint-stock company, and each founder's name, nationality, occupation, permanent address and share. A missing item can ground a refusal. See Company contract and articles.
• Attachments: article 17, in its 2019 wording, asks for three things: the contract, bank proof that capital has been paid in, and, only for joint-stock companies, a feasibility study.
• Capital: capital below the minimum in article 28, or not deposited with a bank authorised to operate in Iraq under article 16.
• Membership: a founder barred from company membership by a statute, court decision or government body, or Iraqi holdings below fifty-one per cent where a foreigner joins, under article 12.
• Name: a name that breaks the naming rules or resembles one already registered; see Choosing a company name.

The route after a refusal

Article 24 sets out a sequence with fixed deadlines:

1. Objection to the Minister of Trade: thirty days, starting when the refusal is served.
2. The Minister's decision is due within thirty days of the objection being lodged.
3. Court: if the Minister also says no, the founder has another thirty days to go before the competent court.

The first deadline runs from notification, so keep proof of when the decision was received. A strong objection answers each breach the registrar named, provision by provision and fact by fact: the article does not apply, the fact is wrong, or the gap has since been filled.

Or simply refile

An objection is not always necessary. Article 25 lets the founders file a fresh application for the same company once the ground for refusal has disappeared. If the problem was a missing clause or bank certificate, fixing it and refiling may be quicker than objecting. Where the disagreement is over how a provision should be read, objection is the right route.

And once approval comes?

The registrar publishes the approval in the special bulletin issued under article 206, under article 21. Legal personality starts on the day the incorporation certificate is issued, and that certificate is its proof (article 22). Article 23 treats every company set up in Iraq under this statute as Iraqi, whoever its members are. From there the post-incorporation duties begin, such as opening accounts and registering with other bodies.

The office follows these provisions from Baghdad, al-Yarmouk.

Legal basis and sources

1. Companies Law No. 21 of 1997, articles 12, 13, 16, 17, 19 and 21–25, 28
2. First Amendment to the Companies Law, Law No. 17 of 2019 (Iraqi Official Gazette, issue 4554 of 9/9/2019)

Frequently asked questions

Related topics and articles

• 01Documents for an application to form a company before the RegistrarDocuments to form a company are those in article 17 after 2019: the contract, a bank certificate, and a joint-stock feasibility study.
• 02The company name before the Registrar of CompaniesThe company name in its contract before the Registrar, the trade name in the commercial register, and a trademark as a separate path.
• 03What did Law No. 17 of 2019 change in forming an Iraqi company?The first amendment to Companies Law No. 21 of 1997, Law No. 17 of 2019: incorporation documents, minimum capital, the Iraqi share in a company with a foreign partner, holding companies, liquidation by the registrar, and electronic dealings.
• 04The company contract and internal rules: the function of each documentThe company contract and the statement before the Registrar under articles 13 and 14, distinct from any internal rules.
• 05Obligations 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.

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

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