The Legal System Governing the Government-owned Companies over the Period of Privatization

The article 18 of the Application of General Policies of Principle 44 of the Iranian Constitution Code, excludes the companies that are under the process of privatization from application of those laws that are applicable to the government-owned companies; the aim was to meet the statutory conditions and frameworks of successful privatization of government-owned shares. On the other hand, the aforementioned article allows the Privatization Board to amend the memorandum and applicable regulations of the government-owned companies over the period of their privatization. with regards to the basics of article 18, and contents and necessities of other applicable laws of the companies and governmental entities as well as general regulations of the private law, the sphere of article 18 is not exhaustive but limited by some boundaries and grounds. The power of the Privatization Board to amend the memorandum and regulations of the companies is subject to some definite limitations so that this power does not exclude the power of the company’s organs and directors. In spite of the indication of article 18, the companies that are to be privatized, in some cases are also subject to some general regulations of government-owned companies as well as applicable rules of private companies.