Conditions for Appointing Audi...

Article 19 of the new Companies Law is one of the important provisions that regulate the operations of companies and define the conditions and requirements necessary for the appointment of auditors. This article aims to specify the companies that are required to appoint auditors and the conditions that must be met for this obligation to apply.

Firstly, it should be noted that the requirement to appoint auditors does not apply to very small and small companies, as stipulated in Article 18 of the law. However, there are exceptions to this rule, as follows:

1.    Companies whose founding contract or bylaws explicitly require the appointment of auditors.

2.    Companies listed on the stock market.

3.    Companies issuing tradable debt instruments, bonds, preferred shares, or redeemable shares

4.    Companies where the appointment of auditors is required according to related regulations.

5.    Foreign companies.

6.    Companies that own another company or are subsidiaries of another company, unless the description of very small or small company applies to all such entities.

To determine whether a company qualifies as "very small" or "small" and is therefore exempt from appointing auditors, one must refer to the regulations that specify the criteria for such classification.

It is also important to note that for the requirement to appoint auditors to take effect, the company must meet the criteria for being classified as very small or small during the first fiscal year of its registration with the commercial registry or during two consecutive fiscal years.

In cases where there are partners or shareholders representing at least 10% of the company's shares and they wish to appoint auditors according to the regulations specified in the bylaws, they have the right to request the appointment of auditors from the company.

Finally, it should be mentioned that cooperative societies are subject to specific rules regarding the appointment of auditors, which apply in certain specified cases as mentioned in Article 18 of the law.

In conclusion, Article 19 of the law aims to regulate the appointment of auditors in companies, ensuring the presence of the necessary conditions and requirements to fulfill this obligation, while considering the exceptions for certain companies and specific cases.