The incorporation of companies in Iraq is witnessing an increasing turnout from businessmen and investors wishing to establish legal entities to practice their commercial and investment activities. However, many of those wishing to incorporate resort to entities or individuals who are unlicensed to practice law or unregistered as registration agents to complete the incorporation procedures, believing that the matter is nothing more than a simple administrative transaction before the Registrar of Companies.
However, the Iraqi legislator has regulated this issue with explicit and interconnected provisions that make drafting the incorporation contract and following up on its procedures the exclusive jurisdiction of a lawyer, and even stipulated a high degree of specialization and experience by regulating the registration agency.
First: The impermissibility of registering an incorporation contract not drafted by a lawyer: Article (34) of the amended Advocacy Law No. (173) of 1965 stipulates that it is not permissible to register company incorporation contracts, regardless of their type, unless they are drafted by a lawyer, excepting contracts where one of the parties is an official or semi-official department. Thus, drafting the incorporation contract—which is the fundamental document that determines the company's identity, structure, and capital—is exclusively the work of a lawyer.
Second: The impermissibility of following up on transactions before state departments by non-lawyers: The lawyer's role is not limited to drafting the incorporation contract, but extends to include following up on registration procedures. Article (19) of the Advocacy Law establishes that following up on transactions before legal authorities falls within the acts practiced by a lawyer by virtue of their profession. This trend is consistent with what was affirmed by the Federal Court of Cassation in its decision No. (3956/Civil Panel/2025) issued on 4/15/2025, which considered that following up on transactions in state departments by non-lawyer expeditors is legally prohibited as it violates public order.
Third: The requirement for the lawyer to specialize as a company registration agent: The Iraqi legislator was not satisfied with restricting the procedures to lawyers in general, but sought to secure precise expertise and specialization to protect the rights of clients and facilitate the tasks of the concerned authorities, thus issuing the Registration Agency Law. According to Article (2) and Article (3) of this law, the practice of business related to the registration of companies, trade names and trademarks, industrial designs, and patents is exclusively restricted to those registered in the register of registration agents with the Registrar of Companies at the Ministry of Trade.
The legislator set strict conditions in Article 4 to ensure the competence of the lawyer undertaking these tasks, stipulating that the applicant for registration as an agent must be:
1. An Iraqi resident in Iraq.
2. A lawyer enjoying absolute authority for a period of no less than three years.
3. Known for integrity and good conduct (endorsed by the Bar Association).
4. Registered with the General Commission for Taxes and has a cleared financial liability.
5. Taking a private law office.
This confirms that the Iraqi legislator views the incorporation of companies as a precise legal act requiring an experienced lawyer officially licensed as a registration agent, not just a novice practitioner.
Fourth: Penal sanctions for those who violate the conditions of the registration agency: Article (22) of the Advocacy Law reinforces the right to provide counsel and representation for practicing lawyers only. Combined with Article (16) of the Registration Agency Law, penal protection emerges; as anyone who practices a registration agency such as incorporating companies without a license, or uses advertising means that mislead the public into believing they have the right to practice these businesses, is punished by imprisonment for a period not exceeding one year. And because the registration agency cannot be granted to non-lawyers, anyone who practices company registration and is not a lawyer is considered subject to the provisions of this penalty.
Fifth: Practical reflection on company incorporation procedures: The legal basis for the exclusivity of the lawyer's (Registration Agent) role can be summarized as follows:
• Article (34) Advocacy: Invalidates and prevents the registration of any incorporation contract not drafted by a lawyer.
• Article (19) Advocacy: Makes following up on registration procedures a core part of the lawyer's work and bans non-lawyer expeditors.
• Registration Agency Law (Articles 2, 3, 4): Restricts following up on and registering companies exclusively to a lawyer with absolute authority who is licensed as a registration agent.
• Article (16) of the Registration Agency Law: Imposes a penalty of imprisonment on anyone practicing this work from among the unlicensed.
Sixth: Risks of relying on non-lawyers:
• The incorporation contract being subject to invalidity or rejection for failing to meet the legal condition.
• The unlicensed person being exposed to penal accountability (imprisonment according to Article 16 of the Registration Agency Law), which leads to disrupting the company's interests.
• Poor legal drafting, which opens the door to future disputes over shares and management.
• The absence of professional liability and oversight imposed by the Licensing Committee and the Bar Association on the registration agent.
In conclusion, incorporating a company is not merely a passing administrative procedure, but rather the building of a complete legal and commercial structure. The Iraqi legislator, through the Advocacy Law and the Registration Agency Law, has been keen to surround this process with a fence of guarantees, stipulating that it be undertaken by an experienced lawyer. Assigning this task to exclusive specialists is the sure guarantee for the safety of the commercial entity and the protection of the partners' investments from the very first step, which is the professional standard that the AJC Legal and Financial Services team adheres to in managing and accompanying its obligations towards its clients.
