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Analysis of Legal Framework of Joint-Stock Cooperative Bank

Author

Listed:
  • Elsan, Mostafa

    (Faculty of Law, Shahid Beheshti University)

  • Tabatabaeinejad , Seyed Mohammad

    (Faculty of Law & Politics, Tehran University)

  • Ghanbari, Rahim

    (Faculty of Law, Islamic Azad University Zanjan Branch)

  • Arab Ahmadi, Majid Reza

    (Faculty of Law, Islamic Azad University, Farahan Branch)

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.

Suggested Citation

  • Elsan, Mostafa & Tabatabaeinejad , Seyed Mohammad & Ghanbari, Rahim & Arab Ahmadi, Majid Reza, 2016. "Analysis of Legal Framework of Joint-Stock Cooperative Bank," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 11(3), pages 331-349, July.
    • Handle: RePEc:mbr:jmonec:v:11:y:2016:i:3:p:331-349
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    References listed on IDEAS

    as
    1. Nadège Jassaud, 2014. "Reforming the Corporate Governance of Italian Banks," IMF Working Papers 2014/181, International Monetary Fund.
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    More about this item

    Keywords

    Cooperative; Qarzol-Hasaneh (Free-Rate Loan); Ministry of Cooperatives; Central Bank; Principle 44; Joint Stock;
    All these keywords.

    JEL classification:

    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • K19 - Law and Economics - - Basic Areas of Law - - - Other

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