Company director duties in Iraq must be distinguished from the company’s own obligations. A claim against an Iraqi company does not automatically become a personal claim against its managing director. Equally, the company’s separate legal personality does not protect a manager from every consequence of their own conduct. The analysis must identify the obligation, the capacity in which the person acted and the legal basis on which personal responsibility is alleged.
In Federal Iraq, the Companies Law No. 21 of 1997, as amended, governs company personality, management powers and relevant duties. The Civil Code No. 40 of 1951 provides the wider framework for contractual and civil liability. Other legislation may impose responsibility for particular conduct, but a breach should be analysed under the applicable rule rather than inferred from the person’s title alone.
The company as the contracting party
Where an authorised manager signs on behalf of the company, the contract should clearly identify the company and the representative capacity. The company’s failure to pay or perform does not, merely because of that signature, establish that the manager personally guaranteed the obligation.
The company form remains relevant. Limited liability companies, partnerships and individual projects do not have identical rules concerning the liability of their owners. A manager who is also an owner should therefore be assessed in each capacity separately. Personal exposure arising from the legal form or a separate undertaking should not be confused with liability for management conduct.
The drafting of signature blocks, guarantees and acknowledgments matters. A document intended only to confirm a company debt should not inadvertently include a personal promise by the signatory to pay it.
The manager’s statutory duties
The Companies Law requires the managing director to operate within the powers and directions of the appointing body. It also applies relevant duties concerning lawful management and conflicts of interest. A claim based on breach of those duties must identify what the manager did or failed to do and how that conduct relates to the alleged loss.
An unsuccessful commercial decision is not automatically proof of misconduct. The quality of the information, the process followed, the authority held and the circumstances at the time may all be relevant. Conversely, approval from an influential shareholder does not necessarily excuse an act contrary to mandatory law.
Etihad’s corporate governance services can assist with defining management powers and documenting decisions before a dispute arises. Clear authority records help distinguish a permitted commercial judgment from an act outside the manager’s mandate.
Conflicts and personal benefit
Transactions involving the manager’s direct or indirect interests require particular attention. The Companies Law’s conflict provisions should be applied to the relevant transaction and officeholder, including the required disclosure and approval process.
The issue is broader than whether the contract price appears reasonable. The approving body needs to understand the nature and extent of the interest and the company’s position. A manager’s involvement in selecting a related supplier, granting favourable credit or transferring an asset may need to be examined against both the approval record and the actual performance.
Where the company alleges loss, the evidence should connect the conduct to the financial consequence. General accusations of disloyalty may be insufficient without the relevant contract, payment, valuation or other supporting record.
Acts outside authority
If a manager exceeds their powers, several questions arise. Did the company become bound to the third party? Did the manager breach an internal duty? Was there a separate representation about authority? These questions may produce different answers and should not be collapsed into a single assumption that the contract is either wholly valid or wholly ineffective.
The Civil Code’s agency principles and the relevant corporate documents should be considered alongside the circumstances of the dealing. Any proposed confirmation or ratification must also be assessed for its legal effect. A later resolution should not be described as automatically curing every prior defect.
Where a manager signs a personal guarantee, that separate undertaking requires analysis on its own terms. Resignation or removal from office does not necessarily release the guarantee.
Tax workforce and other statutory matters
Managers may be involved in obligations governed by the Income Tax Law No. 113 of 1982, as amended, the Labour Law No. 37 of 2015 and the Workers’ Retirement and Social Security Law No. 18 of 2023. The responsible person, required act and consequence of non-compliance must be identified under the relevant legislation.
An overdue company filing or unpaid contribution should not be used as a basis for assuming unlimited personal liability in every case. Equally, delegation to finance staff does not necessarily remove all responsibility from the officeholder. The inquiry should address actual duties, authority, knowledge and conduct where those elements are legally relevant.
Departure and continuing exposure
A management handover should preserve records of approvals, outstanding commitments and unresolved issues. Departure does not erase potential responsibility for earlier conduct, and the incoming manager should not be treated as personally responsible for every historic company liability merely because they take office.
Any release or indemnity between the company and the manager should be reviewed for its scope and legal limits. Such an arrangement cannot automatically eliminate claims belonging to third parties or override mandatory statutory consequences.
Responding to a personal claim
The response should identify the claimant, the alleged duty, the relevant act, the claimed loss and the evidence supporting the connection between them. Corporate debt, personal guarantee, civil misconduct and criminal allegations require distinct analysis.
Etihad Law Firm’s litigation and dispute resolution practice can assess those issues alongside the corporate record. The central task is to distinguish the company’s obligations from personal responsibility that has a specific legal and factual basis.