Iranian Journal of Trade Studies

Iranian Journal of Trade Studies

The Continuation of Inspector's Powers and Actions in Joint Stock Companies After Mandate Expiration: A Comparative Legal Analysis Based on Agency Theory

Document Type : Research Paper

Authors
seyyed mohsen aziz 1
ali shiaali 2
ghasem abbasi 3
1 Assistant Professor, Department of Jurisprudence and Fundamentals of Law, Faculty of Theology, Hakim Sabzevari University, Sabzevar, Iran
2 Jurisprudence and Principles of Law, Faculty of Theology, Islamic Azad University of Shirvan
3 Master of private law of Ishraq University:
10.22034/ijts.2025.2062135.4148
Abstract
The continuity of the supervisory body's function in joint stock companies is a fundamental condition for the validity of decisions and the protection of stakeholders' interests. Although Article 144 of the 1968 Amendment to the Iranian Commercial Code stipulates a one-year term for the inspector's mandate, the legislator has not explicitly addressed the inspector's status after the expiration of this term, and this legal gap has led to doctrinal controversies and practical inconsistencies. This study, employing a descriptive-analytical method and adopting a comparative approach examining French and Egyptian law as well as new regulations concerning Iranian state-owned and cooperative companies, investigates the scope and effects of the inspector's legal actions during the interim period between the expiration of the legal term and the election of a successor. The novelty of this article lies in the conceptual distinction between the "legal status of the inspector" and the "legal actions of the inspector," analyzing the continuation of their authority in light of agency theory and the principle of continuity of the supervisory institution. The findings indicate that, considering the mandatory presence of the inspector for the validity of financial statements (Article 153) and by analogy with various legal provisions such as Article 263 of the 2013 Law on Legal Entities and Commercial Companies and Article 61 of the National Iranian Oil Company Statute, the continuation of the former inspector's duties and powers until the appointment of a successor represents an interpretation consistent with the legislator's intent and the underlying philosophy of the supervisory institution. Finally, a proposed framework for amending Article 144 and defining the scope of the inspector's authority during the interim period is presented.
Keywords
Inspector
Joint Stock Company
Legal actions
Continuation of mission
Comparative law
Agency theory Expiration
Term
Mission

Subjects

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  • Receive Date 29 May 2025
  • Revise Date 04 December 2025
  • Accept Date 27 December 2025