What is a public joint-stock cooperative company?

What is a Public Joint-Stock Cooperative Company?

A public joint-stock cooperative company is composed of natural or legal persons whose founders (in accordance with paragraph (9) of Article (1) of the Executive Regulations for the formation and supervision of public joint-stock cooperative companies, the Cooperative Law, the Commercial Law, the limitations specified in the Law “Amendments to the Fourth Development Plan of the Islamic Republic of Iran and the implementation of the general policies of Article 44” and the regulations for the formation and supervision and the method of block ownership of public joint-stock cooperative companies):

With the aim of meeting common needs and improving the economic and social status of members through mutual assistance and cooperation of the members themselves, based on the principles enshrined in the Cooperative Companies Law ratified on 09/04/1352, they establish a company (in the form of a cooperative) to provide part of the company’s capital through the sale and offering of shares to the public (in a public manner),

In the form of “Public Joint-Stock Cooperative,” they are formed;

The financing (capital) of the public joint-stock cooperative company is provided in such a way that shareholders, at the establishment stage of the company according to the Cooperative Companies Law, deposit at least thirty-five percent of the pledged amount (to secure part of the capital) in an account named “Company Under Formation” in one of the banks, in cash, and are committed to securing the remaining registered capital of the company within a specified time, and thus, during this period, it is generally possible to secure it from the capital market. The minimum capital required to establish a public joint-stock cooperative is five billion rials.

In other words, a public joint-stock cooperative company is the most complete and a specific and unique type of company that benefits from two characteristics: cooperative nature and large size, and has the following features:

– It is the only type of cooperative company that can undertake projects where individual capital is insufficient to fully provide the necessary capital and has the possibility of selling (offering – trading) shares offered by the company’s members in the capital market (stock exchange) and allows public membership. For example, financing for projects related to mining, processing high value-added products, trade with foreign countries, establishing factories, creating dams, and banks.
– All shares in this company are registered.
– The transfer of shares is easy and not limited to the consent of other shareholders.
– The number of partners in this company, due to limitations on share ownership, is greater than in other types of joint-stock companies.
– A 25% discount on income tax for applicable cooperatives.
– In all cases where the government considers support for the non-governmental sector, other than taxes, this support is twenty percent (20%) more than that applied to non-cooperative sectors.
– A discount of up to twenty percent on the employer’s share of insurance for employed members in any cooperative.
– Support from the Cooperative Development Bank and the Cooperative Investment Guarantee Fund for cooperative companies.
– Free provision of educational services including consulting, assistance in enhancing productivity, entrepreneurship training, skills training, and internships.
– Payment of subsidies for interest on bank loans and initial investment costs for establishing cooperative companies.
– No restrictions on attracting foreign investment and foreign shareholders.
– The possibility of forming unions and membership in the Chamber of Cooperatives and benefiting from its advantages.

**Number, Composition of Elements, and Shares in Public Joint-Stock Cooperative Companies**

The number of members in consumer cooperatives is 250 members, while in various types of public cooperative companies, it should not be less than 500, and in various cooperative unions and other cooperative companies, it should not be less than 7 members. The board of directors must have at least three and no more than seven principal members and also have an alternate member up to one-third of the principal members. Additionally, the company’s management structure includes a general assembly along with the board of directors (maximum term of activity is three years) and inspectors, which includes one main inspector and one alternate inspector (maximum term of activity is one year). The maximum share ownership from the company’s capital for each individual is five percent and for legal persons, a maximum of twenty percent.

Necessary Documents for Company Registration with the Companies and Non-Commercial Institutions Registration Office and Obtaining a License to Establish a Company from the Ministry of Cooperatives, Labor, and Social Welfare

1. The approved articles of association by the founding general assembly of the company.
2. The company’s declaration.
3. An invitation to hold the first ordinary general assembly.
4. The minutes of the first ordinary general assembly indicating the approval of the articles of association, the determination of the members of the board of directors and the inspectors, and the publishing newspapers.
5. The minutes of the first board meeting, including the selection of the chairman, vice-chairman, and secretary of the board, the selection of authorized signatories, their names and specifications, and the selection of the managing director.
6. A list of names and specifications of the founders of the company and their identification documents.
7. A list of names of attendees at the first ordinary general assembly containing their signatures.
8. A list of names and specifications and addresses of the members of the first board of directors and the inspectors (both principal and alternate) and the managing director that have been signed.
9. A receipt of the bank certificate for the required funds for the company’s capital according to the articles of association.
10. A license to operate from the Securities and Exchange Organization.
11. Preparing a subscription announcement published in at least two widely circulated newspapers and made available to the public at the bank holding the company’s account.