Analysis of Legal Framework of Joint-Stock Cooperative Bank

Mostafa Elsan (), Seyed Mohammad Tabatabaeinejad (), Rahim Ghanbari () and Majid Reza Arab Ahmadi ()
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Mostafa Elsan: Faculty of Law, Shahid Beheshti University
Seyed Mohammad Tabatabaeinejad : Faculty of Law & Politics, Tehran University
Rahim Ghanbari: Faculty of Law, Islamic Azad University Zanjan Branch
Majid Reza Arab Ahmadi: Faculty of Law, Islamic Azad University, Farahan Branch

Journal of Money and Economy, 2016, vol. 11, issue 3, 331-349

Abstract: Joint-stock cooperative company is not recognized in Commercial Code of Iran and the amendment bill of the Commercial Code adopted in 1968. This business entity has a unique description because of both being cooperative and having joint stock. It is a joint-stock company that is chartered based on Commercial Code of Iran, amendment bill of the Commercial Code adopted in 1968, and Principle 44 of the Constitution. Joint-stock cooperative Qarzol-Hasaneh Bank is not involved with commercial activity; the maximum share of each real shareholder is equal to half of company's capital at the time of establishment and during company's function. Ministry of Cooperatives and the Central Bank monitor activities of joint-stock cooperative companies. Joint-stock cooperative bank like joint-stock cooperative company should be subjected to amended bill of the Commercial Code adopted in 1968, enforcement Act of general policies of Principle 44 of the Constitution. Formation of joint-stock cooperative bank is not possible in practice unless violating the cooperatives regulations and doing activities that are out of jurisdiction of cooperative companies. It should be noted that cooperative banks are considered as nongovernmental banks, therefore they must obey regulations expressed in rules and regulations of non-governmental banks.

Keywords: Cooperative; Qarzol-Hasaneh (Free-Rate Loan); Ministry of Cooperatives; Central Bank; Principle 44; Joint Stock (search for similar items in EconPapers)
JEL-codes: K19 K22 K41 (search for similar items in EconPapers)
Date: 2016
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