Civil Liability Provisions in Joint Stock Companies under Iraqi Law

This paper looks at the civil liability provisions of the joint stock companies in Iraq that was incorporated as a public company. It aims at clarifying the legal and governance framework of establishing such firms in Iraq and the issue of civil responsibility of the founders of such firms. The paper concludes that the liability of the founders according to the Iraqi law is that of personal liability, which goes to the personal fortune of the founders, but not the wealth of the company- especially when the company is not formed yet and the act of founding the company between the founders has not been ratified. Besides, it is a joint and several liability the provision of which is found in Act 16/3, and this serves to secure the protection to the party injured. The fault, harm and causation matter is one which is on the plaintiff and this can be problematic in certain cases.
The research suggests that the legislature of Iraq needs to come up with more precise and explicit legal clauses to govern the liabilities associated with the founders of the company, especially when it comes to acts and agreements that were signed on behalf of the company, prior to the official formation of the company.