Replacing a managing director in Iraq involves a corporate decision and an operational handover. The company must establish who may remove and appoint the officeholder, what powers the replacement receives and how banks, authorities and counterparties will recognise the change.
The appointment record should be coordinated with the outgoing director’s contractual position and the company’s existing delegations. A personnel announcement alone does not complete the legal transfer of authority.
Identify the body competent to make the change
Under the Companies Law, the board determines the appointment and powers of the managing director in a joint-stock company, while the appropriate general assembly or owner process applies in other company forms. Removal must also follow the applicable statutory process through the competent appointing body.
The company should therefore examine its legal form, current constitution and existing appointment documents before preparing a resolution. A foreign shareholder’s internal approval does not replace the Iraqi company’s decision, even where the shareholder directs the group’s commercial strategy.
The decision should comply with the relevant notice, quorum and voting requirements. Where the appointment is disputed, a defective meeting can create an additional challenge instead of restoring clear management.
Separate the corporate office from employment rights
A managing director may also have an employment or service contract. Ending the corporate appointment and terminating that contract are related but distinct matters.
The company should review the contract, the applicable labour or other legal framework and the circumstances of the change. Removing signing authority does not automatically determine salary, accrued benefits, notice obligations or contractual compensation.
The documents should make clear which relationship is being ended and which obligations continue. A settlement should also address the handover of company property and records without assuming that employment claims disappear because the corporate resolution has been filed.
Draft a complete replacement decision
The resolution should identify the outgoing and incoming directors, the intended effective arrangements and the powers granted to the replacement. It should also identify the person authorised to complete the required filings and external notifications.
The new mandate should be reviewed on its own merits. Copying an old appointment may reproduce powers that no longer suit the business, including broad borrowing or delegation language that shareholders have not recently considered.
Etihad’s corporate governance services support the appointment process and the coordination of management powers with the company’s constitutional and shareholder arrangements.
Define authority during the transition
The company should avoid an unexplained period in which the old director has been removed but the replacement cannot practically operate bank accounts or present accepted authority documents. It should also avoid leaving two people with conflicting expectations about their powers.
The transition plan should identify which signatures are valid for each category of transaction and what evidence the recipient requires. Any temporary delegation must be granted by a person or body with authority and remain within the limits of the applicable law.
Documents should reflect the actual dates of decisions and signatures. Backdating an appointment or signing in the name of the outgoing director is not a substitute for resolving the authority gap.
Update banks and transaction counterparties
Banks will usually require their own evidence before changing account signatories and access rights. The company should identify the required corporate documents, identification records and mandate forms in advance.
The bank update should also address payment limits, approval combinations and access devices. An incoming director should not rely on using the previous director’s personal credentials to maintain payments.
For material contracts, the company should review named representatives and notice provisions. A change of managing director does not necessarily change the contracting party, but the counterparty may need formal notice and evidence before accepting instructions from the new representative.
Review existing powers of attorney and delegations
The company may have granted powers to lawyers, accountants, branch managers or employees. Each authority should be reviewed to establish who granted it, on whose behalf, for what purpose and whether the management change affects it.
The departure of the individual who signed a company power of attorney should not be assumed automatically to terminate every authority granted by the company. Equally, an authority dependent on a particular appointment or containing an expiry condition should not be used without checking its continuing validity.
Where revocation or replacement is required, the appropriate formalities and notifications should be completed. The company should retain an updated list of who can act for it and in what capacity.
Conduct a documented handover of the business
The outgoing director should provide the records and property needed for continuing operations. The handover should identify outstanding matters rather than merely confirm that a box of documents has changed hands.
Important items include:
- Corporate originals, meeting records and the company seal.
- Current bank mandates and outstanding payment instructions.
- Contracts awaiting signature or performance.
- Tax, social security and regulatory correspondence.
- Litigation deadlines and instructions to legal representatives.
- Accounting records, payroll information and controlled system access.
The handover record should distinguish items delivered, items missing and matters requiring follow-up. It should not be drafted as an unrestricted release of unknown liabilities unless that is a deliberate and legally reviewed agreement.
Preserve the ability to investigate historic conduct
A change of manager does not itself decide whether the outgoing director acted lawfully. The company should preserve records relevant to any suspected breach and avoid unsupported public allegations.
Iraqi company law imposes duties concerning proper management and conflicts of interest. Any proposed claim should identify the conduct, applicable duty, resulting loss and evidence, rather than relying solely on dissatisfaction with commercial performance.
Etihad’s litigation and dispute resolution practice can address contested removal, handover or management-liability issues while the company restores its ordinary governance processes.
Apply the correct process to foreign branches
A foreign branch manager is appointed under authority from the foreign parent and the branch framework. The change must be supported by the appropriate parent documents, and the applicable residence and Registrar-notification requirements must be considered.
This process should not be treated as identical to replacing the managing director of an Iraqi incorporated company. The branch file, bank mandate and operational authorisations should all reflect the person lawfully empowered by the parent.
Confirm the new authority is usable
The transition is complete when the corporate decision, filing record and operational arrangements consistently identify the authorised manager. The company should retain evidence of the change and confirm that essential payments, filings and contracts can proceed lawfully.
A carefully managed replacement protects continuity while preserving accountability. It gives the incoming director clear powers and leaves the company with a defensible record of how authority passed from one officeholder to the next.