Commercial Law in Iran

The current Iran Commercial Law has been ratified before the Islamic Revolution on May 3rd, 1932 and consists of sixteen chapters. Since merely the chapters 1, 2, 4 and chapter 6 up to 9 of the Iran Commercial Law would be discussed in this paper, the other chapters would be discussed under Incorporation law.


Chapter one of the Iranian Commercial Law

The first chapter is dedicated to the definition of merchants and commercial transactions that clarifies the constituting elements of a merchant and explain how a transaction should be considered as a commercial transaction.


Who is the merchant and could be the subject to the Iran Commercial Law?

Commercial Law in Iran

Commercial Law in Iran

In accordance with Article 1 of the Iran Commercial Law, a merchant is a person whose ordinary engagement is commercial transactions. By considering the presented definition, both natural and legal persons would be considered as a merchant which means that the managers or managing director of the companies wouldn’t be recognized as the merchant as they work on behalf of and in the name of the company.

Furthermore, in the case that either a natural or legal person considered as a merchant, he/she should be obliged to register his/her name in the registration office and having commercial books as well as declaring the bankruptcy but the recognition of a person weather natural or legal as a merchant should be on the own discretion of the court.


What is the Commercial Transaction?

Articles 2 and 3 of the Iran Commercial Law identifies Commercial Transactions. In this regard, in general, there are two kinds of transaction which should be recognized as a commercial transaction:

  1. The inherent commercial transaction in which it is not important if conducted by a merchant or not. Therefore everybody should be authorized to conduct that actions as commercial transaction such as Purchase or acquisition of any kind of movable property, for the purpose of sale or hire, whether in its original state or not, Transport business of any kind by land, sea or air, Business connected with auctions, etc.
  2. The transactions named subordinated Commercial transactions in which one or both of the contracting parties are merchants.


Chapter two of the Iranian Commercial Law

As was mentioned previously, one of the obligations of the merchants should be regarding commercial books and registration on the registration office which stated in chapter two of the Iranian Commercial Law.


What kind of commercial books are there?

According to Article 6 of the Iranian Commercial Law, every merchant is required to keep the following books unless the small merchants:

  • Journal
  • Ledger
  • Inventory
  • Copy Book

It is worthy to note that the tax should be calculated in accordance with the above-mentioned commercial books and keeping them doesn’t mean that the holder is a merchant.


Chapter four of the Iranian Commercial Law

By considering that the other chapters of the Iranian Commercial Code are about the issues discussed in Incorporation Law, we will focus on Bank check, Promissory Note and Securities in Iran. Bearing in mind that regarding bank checks, the Iranian government also ratified the Law on Check’s Issuing on July 18th, 1976 and modified on November 14th, 2018.


Why should we write the issuing date on commercial documents?

The issuer is obliged to write the issuing date on the commercial documents as it is important to recognize his/her capacity in this regard at the issuing date. In addition to that most of the time, the delivery date of the commercial documents should be calculated from the issuing date.


Chapter six to nine of the Iranian Commercial Code

These chapters are relating to the commercial representatives and clarify their types. Therefore, you will understand each kind of commercial representative’s responsibility, mission, etc.



The Commercial Law in Iran also divides to the below topics particularly:

  • Definition of a merchant in Iran
  • Commercial activities in Iran
  • Commercial books in Iran
  • Bank check, Promissory Note and Securities in Iran
  • The Agency in Iran’s law