records must establish a consistent legal history: how the company was formed, who owns it, who may bind it and whether important changes were properly completed. Gaps in that history can affect transaction structure, closing conditions and the protections negotiated between the parties.
The Companies Law No. 21 of 1997, as amended, is the principal source of corporate requirements in Federal Iraq. The Civil Code No. 40 of 1951 is relevant to contractual commitments and representation, while the Anti-Money Laundering and Counter-Terrorism Financing Law No. 39 of 2015 informs the wider ownership and due diligence framework. The significance of each document depends on the legal proposition it is intended to prove.
Establishing identity and continuity
The incorporation certificate, constitution and accepted amendments should identify the company and explain changes to its name, address, capital or activities. An investor should be able to connect the entity described in an older contract with the entity being acquired or financed today.
A recent extract may provide a useful current position, but it may not explain the legal history of a material transaction. Earlier resolutions, certificates and supporting documents should remain available where they establish how the current position arose. An unexplained consolidated constitution can otherwise obscure a missing amendment or an inconsistency between records.
For a foreign branch, the review must extend to the foreign company’s identity and the local branch registration. A branch should not be assessed as though it has the same ownership structure and separate share capital as an Iraqi subsidiary.
Proving ownership
The Companies Law requires a shareholder register for the relevant company forms and provides mechanisms concerning its inspection and correction. The register should be reconciled with incorporation records, capital changes and share-transfer evidence.
A private share purchase agreement may record the parties’ commercial bargain without proving completion of every Iraqi transfer formality. For a limited liability company, the legal review should consider the applicable priority rights, transfer contract and company transfer-register requirements. Listed securities may engage separate procedures.
The investor should distinguish legal ownership from beneficial ownership. An immediate corporate shareholder may be accurately recorded while further evidence is still needed to identify the natural persons who ultimately own or control it. Those two inquiries should be coordinated without substituting one register for the other.
Authority behind material commitments
Important contracts should be linked to the management appointment, resolution or power of attorney supporting execution. The relevant question is the signatory’s authority at the time the commitment was made. A current appointment does not retrospectively establish authority for an earlier signature.
The review should also examine whether the transaction required a separate corporate decision, investor consent or regulatory approval. Where approval was conditional, the file should show whether the conditions were satisfied. A generic statement that management approved the contract may be inadequate for a major guarantee or disposal.
Etihad’s corporate legal services can support legal due diligence by connecting each material commitment to the authority and procedure on which it depends.
Reporting and financial consistency
Annual corporate information, audited accounts and management reports should be checked for consistency with the ownership and authority record. Differences in capital, related-party balances or management names may indicate an innocent timing issue, an accounting classification or an uncompleted corporate action. The explanation should be supported by evidence.
Tax evidence should be assessed separately under the Income Tax Law No. 113 of 1982, as amended. A corporate filing receipt does not establish the absence of tax exposure. Similarly, a tax document should be read for the period and purpose it actually covers rather than treated as a universal confirmation of compliance.
Etihad’s tax due diligence services can be coordinated with the corporate review where financial statements, assessments and transaction records do not align.
Distinguishing missing evidence from a missing legal act
A lost copy and an approval that never occurred require different responses. Where the act was validly completed, the company may be able to obtain an official copy or other reliable evidence. Where the act was never completed, simply preparing a replacement document will not resolve the underlying defect.
The company should not reconstruct minutes as though a meeting occurred when the available evidence does not support that account. A lawful corrective decision may be possible, but its scope and legal effect must be assessed. The investor should understand whether remediation confirms an existing position or creates a new one.
Organising a transaction-ready file
The data room should distinguish:
- Effective corporate documents and their supporting history.
- Drafts and applications still awaiting completion.
- Historic documents retained to explain earlier transactions.
- Identified gaps and the evidence needed to resolve them.
- Restrictions on disclosure and arrangements for controlled access.
Each important statement in the disclosure process should be traceable to a document or a clearly identified factual explanation. The absence of a document should not be concealed by an overly broad assurance that all records are complete.
Translating findings into transaction terms
Corporate findings may require a condition to closing, a targeted warranty, an indemnity or a post-closing undertaking. The appropriate response depends on the seriousness of the issue and whether the proposed protection can actually be implemented.
Etihad Law Firm can assist with both the review and the resulting transaction documentation. Reliable corporate records allow the parties to distinguish manageable documentary gaps from legal defects that affect ownership, authority or the ability to complete the deal.