Commercial Law (Commercial Code) of Afghanistan - 1955 - Usulnameh on the Commercial Law of Afghanistan

In the Name of God, the Beneficent the Merciful

Law of Commerce

1334

Book One - General Regulations

Chapter One Ц Introduction

Article 1: The provisions of the Commerce Laws are applicable to all commercial transactions.

Article 2: Commercial disputes are to be settled in accordance with legally binding agreements and in their absence disputes are to be determined and settled by reference to the meaning and implication of existing commercial laws. In the absence of a law, local and special customs (those that are commonly recognized, consented to, and used) are applied. Local customs and practice are preferred to general custom. In the absence of any other of the above Ц mentioned methods any other laws which might apply to the dispute are used.

Remark: The preference of local and special custom and practice to general custom and practice is given because the custom of and practice of locality are the out come of business transactions of the area. If a clear-cut custom relating to a dispute in one particular locality does not exist, the custom of the nearest locality to this dispute is applied.

Article 3: In the absence of any other explicit laws, the contents of Article 2 are applied.

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Chapter 2- Commerce and Commercial Capacity

Article 4. Every individual having reached the age of eighteen is permitted to engage in commercial activities provided he is not legally debarred of his legal rights.

Article 5. when a business has passed to a minor, the legal authorities shall consider if the continuation of such a trade by his legal agent is beneficial to the interest of the minor. In case the executer or the legal agent should not have the legal commercial capacity, he is not permitted to carry on until a new agent or guardian has appointed.

Article 6. The rulings of Article 5 are applicable to other individuals lacking commercial capacity.

Article 7: All persons who under law of promotion and retirement of civil servants are counted as employees of services of the state are barred from engaging in direct commercial activities.

Article 8: Everyone, whether as an individual or a member of a corporation, who possesses legal commercial capacity and who in his own name has engaged in one or more commercial activities and who has made commercial activities his habitual business is considered a merchant.

Article 9: A person who has opened a center for his commercial activities and who advertises to the public through circular letters and the press is considered a merchant even if his habitual business is not commercial activity.

Article10: An individual performing a commercial transaction by chance or by coincidence shall not be considered a merchant. The transaction and activities performed must be governed by the regulations of commercial laws.

Article 11: Provinces and municipalities may engage in commercial activities. They are not considered merchants but their commercial transactions are governed by commercial law.

Article 12: People whose commercial activities are based more on physical strength than on cash capital, or whose income is so little it barely suffices for their living, regardless of whether they are stationed in a shop or move around, are considered small merchants (small businessmen).

Article 13: Small merchants do not have to have a business title or keep the commercial registry books and neither are they affected by the bankruptcy regulations.

Remarks: Those who are in one of the trade classes and who are required to get a business class permit are classified as small businessmen.

Subchapter C Ц Commercial Transactions

Article 14: For merchants / non-merchants who purchase movable and personal property for sale or lease to other persons in original or altered form, the sale or leasing of such properties is considered a commercial transaction.

Article 15: Leasing of movable and personal property by merchants and non-merchants for the purpose of leasing it to others is considered a commercial transaction.

Article 16: Employment of persons for the purpose of contracting them to others by individuals, whether merchants by vocation or otherwise, is considered a commercial transaction.

Article 17: If a landowner, farmer, or a cattle-raiser sells his products or changes them to other forms before selling them, such action should be considered as normal or ordinary activities. Similarly, if a farmer with agricultural and industrial machines or plants exchange his product Ц or if a professional person or his employee (or his machines) produces his professional product and sells them; or if an author publishes his books and sells them, these activities constitute ordinary activities. But if a person for the purpose of changing his agricultural product opens a permanent establishment possessing the qualities of an industrial business, this is considered a commercial transaction.

Article 18: The following transactions are commercial and business transactions:

Agreement to provide any kind of movable property and accept any kind of activities and products.
Establishment of a power plant or press; photography; printing; and selling of books.
Establishment of theaters, movies, parks and public places, e.g., hotels, business compounds, restaurants and the like, employment offices, and auction places.
Transportation of passengers, animals, and goods via land, air, and water
Distribution of water, gas, electricity and the establishment of telephone communication.

Article 19: The following transactions are commercial transactions regardless of the parties concerned:

Working for commission.
Brokerage.
Bill and draft transactions (whether recorded in the name of a person or a bearer).
Money exchange transactions.
Transactions made by private and public (special and general) banks.
Transaction relating to current accounts and agreements thereof.
Transactions relating to mortgage documents and receipts existing against goods placed in commercial general storehouses.
Establishment of commercial companies and buying and selling of shares.
Contraction of any kind of insurance for all risks whether for fees or for reciprocal terms.

Article 20: All transactions of a merchant are assumed to be commercial unless proved ordinary.

Article 21: If an agreement between parties is commercial to only one of the parties, provided there are no statements to the contrary in the law, the obligation arising form this agreement on the part of the contractors are subject to the Commercial Law.

Article 22: Obligations arising for a merchant or non-merchant from other transactions or from transactions or from transactions similar to those mentioned in this chapter, are inherently subject to the regulations of the Commercial Law.

Article 23: All transactions relating to the transactions of this chapter are taken as commercial transactions.

Subchapter D- Business Registration

Article 24: The business Registration Office, supervised by the courts, deals with the solution of problems and the hearing of cases arising from commercial disputes.

Article 25: Responsibilities for the operation of the Business Registration Office, under the direct supervision of the president of the related court, shall be delegated to a responsible and authorized officer.

Article 26: If there are many commercial courts in one locality, the Business Registration Office, by the decision of the higher authorities, should be placed under the supervision of one of these courts.

Article 27: All matters and transactions subject to registration by commercial or other laws are registered directly or by request made through related agencies or other concerned parties. Any chances brought about related matters must be filed and registered according to rules.

Article 28: The following are to be registered by merchants and commercial firms:

Name of the person or firm.
Father's name.
Place and date of birth.
Citizenship of person or firm.
Business title.
Field of business .
Kind of firm as well as its date of establishment and home office.
Capital of firm (small business are exceptions).
Individual authorized to sign in affairs of the firm.
Any other specifications which are compulsory must be registered.

Article 29: Interested parties, as well as their heirs and agents may be authorized to make request for registration. In case more than one person is authorized to make the registration request, if the registration is made through request of one of them, it is considered to have been made through the request of all of them.

Article 30: Since registration may be initiated either by personal request of interested parties or by their legal agents, they are executed by submission of papers formally prepared and considered and containing registration information.

Article 31: Request for registration must be made during the period prescribed by law for this matter. If no such period is fixed by law, the registration must be completed within one month from date of completion of documents. For persons who must register but who live far from the place of registration, due to the distance. One day is added for each 12 miles.

Article 32: The registration that must be advertised should be in local, official, or private papers until such time as a special paper for the purpose of official advertising is created. In case there is no local paper, the matter should be advertised in the local paper of the closest vicinity. Except in special cases where advertisements are legally permitted to be omitted, the subject of the registration should be published word by word. If the advertisement takes more than one issue of the paper, the last day of advertisement is considered the completion date of advertisement. The number and date of registration must appear or request paper, securities, and advertising newspaper, and must be recorded.

Article 33: Subjects awaiting court decisions or those concerning which the registration officers have some question could, by the request of the interested parties, be temporarily registered. If within six months of the temporary registration the matter is settled, it is permanently registered according to the, law, otherwise it is omitted from the registry.

Article 34: If the registered item, in all or in part, should no longer exist, the registered item could, on written request of the concerned parties, ( which should be accompanied by necessary supporting papers), be omitted in whole or in part as necessary. For items whose registration it was necessary to advertise, their omission is advertised as well.

Article 35: In regard in execution of the registration by the officer of registration, the omission and changes related to thereof, submitted by an interested party, could be objected to by relevant officers of registration. Such objection is given the consideration of the court and a decision will be made. In the case the method followed by registration of officers should also affect a third party, the matter should be taken by the court, heard, and a decision made as a legal case in presence of the third person and the objector.

Article 36: Anyone may study the contents of a registry and the recorded papers related thereto to investigate their corrections, and they may request an authenticated copy of the registration.

Remark: In such cases, a certification fee is charged as follows:

For each study (one Afghani)
For receiving a copy with no confirmation and certification (5 Afghanis)
For receiving a certified copy (20 Afghanis)

Article 37: The individuals required to register who have not done so are subjects to compensate those individuals who have been affected by this negligence. Moreover, by recommendation of registration officer to the related court, such a person could also be fined in cash. Such people made to compensate for loss received by others can appeal to court of appeals or to Supreme Court, provided the compensating money is placed in the court safe or provided they submit a guarantee before the case is accepted for further hearing.

Article 38: Subjects registered in the Registration Office can affect and have legal competence in relation to a third party but the subjects not registered that legally should have been do not affect the third party, even though they have been advertised by special channels. This much should be mentioned Ц that the obliged persons against other could claim and prove their awareness of the matters that should have been registered.

Article 39: Individuals who, in bad faith, commit fraudulent acts in registering are subject to a cash fine or imprisonment or both. These people for a period of time, are deprived of the right of membership in Chambers of Commerce and industry, and are not allowed to carry out transactions in stock exchanges.

Demand for reimbursement of losses on the part of others because of this fraudulent act is permitted and the Court should give consideration to it whenever the demanding person requests it.

Chapter Five

Business Title

Article 40: Every merchant is obliged to sign and execute his business transactions under a definite title known to be his business title.

Article 41: Every merchants whether alone or in partnership with another, and also every commercial company must register and advertise his or its business title in the Registration Office of the district where his or its business office is located or where business transaction are taking place.

Article 42: The business title should be composed of names of the merchants and his family and must be clearly distinguishable from titles already registered. Every merchants can add and bring changes to his business title provided this change does not create any wrong impression about the identification of the merchants himself, or about the existence of his close partner in the mind of a third party.

Article 43: The title of a general partnership (Kollektif Sirkat in Turkish, Sherkat Tazamoni in Dari) must be composed of the names of all partners, or it should, at least, contain the name of one partner and include the word "Tazmoni",or general partnership.

аA special partnership (Sherkat Tazmoni-Mekhtalet in Dari, Komad in Turkish) company is organized on the ordinary basis of its capital being divided into shares. As mentioned in Article 42, the titles contains the name of one of the partners who will have an unlimited responsibility plus the term "Tazmoni Mekhtalet", or special partnership.

аThe field of activity and purpose plus the term "joint stock company" is indicated the title of joint stock company (Sherkat Sahami). The name may appear in the title of such company.

Article 44: In case a merchant should have registered his business title in a locality, another merchant, even if he should happen to have a name to make this the same title, cannot, unless bringing a change in it to distinguish it from the title previously registered, use this title in that locality as a business title or as a title for carrying out a business transaction. Also, if a merchant or company wishes to open a branch in a locality different from the one in which he or it has registered, and if there is another business going on by that name, there has to be a change in the title of the newcomer business in such a way as to make it clearly distinguishable from the one previously registered there.

Article 45: As the transaction of a business title or the separation of the title from the business firm is not permissible, similarly in the case of transfer of one business firm, if the business title is not specifically provided the title of the business cannot be transferred.

Article 46: Upon the sale of a business, the sellers shall be responsible for their acts and obligations pertaining to operations prior to the data of sale. Likewise, profits and gains accruing from operations prior to sale shall be credited to the sellers of the business. Any provision to the contrary shall be specified in the contract of sale, shall be registered at the Business Registration Office, and shall be advertised in an appropriate trade paper to inform persons concerned with those transactions. Obligations of the buyer, deriving from the above provisions, expire at the end of five years if not appropriately assorted by the seller.

Article 47: If, upon transfer or grant of a business, the grantee (the one to whom the business is transferred) has not agreed in the grant contract to accept responsibility for all obligations prior to the grant, and has not registered it, the grantee is not responsible for the obligation of the grantor.

Article 48: The buyer of a business who has acquired a business according to Article 46 shall include in the title of the business subsequently and appropriate phrase to show his operation as the successor of the seller. Failure to do so makes the seller (or the transferor) who has agreed with the buyer (or transferee) to use the business title responsible for all obligations which the buyer has rendered under the same title. However, this is conditioned to the fact that if the debts are received due to an appeal of the creditors, by the court, the seller would not be responsible any more.

Article 49: In the case of the death of a partner whose name was a part of the title of a company, if the heirs of the deceased continue in the business, the title of the company should not be changed. If the heirs do not participate in the company and give a written approval to the effect that the name of the deceased partner could be used, the title of the company need not be changed.

Article 50: In case the title of a business is changed, the contents Articles 41 are applied.

Article 51: In case a person intentionally uses the business title of another, on his merchandise files, letters, and articles related to his business, or sells or offers the goods marked under the title of another business, he is liable to find or imprisonment or both; provided that there should not be any interference with the contents of Article 54 application of the punishment of this Article is restricted to suits brought by an individual. The accuser can take back his complained but this will also invalidate the suit regarding the common rights.

Article 52: Those deviating from Articles 40, 41, and 42 and the last paragraph of Article 43 and from Article 45 are fined in cash.

Article 53: All courts and officials of Chambers of Commerce, industries, and the registration office, when informed about business title not having been registered, and which is contrary to Article 40, 41, 42 and 43, are supposed to inform the related authorities.

Article 54: Regardless of the manner in which a business title is used contrary to the contents of this subchapter, the concerned parties can ask for the prohibition of its use or, if registered, can ask for its invalidation. Moreover, if others should happen to have suffered loses through the use of such titles, regardless of whether the title was used intentionally or through mistake, those who have suffered are entitled to claim the loses suffered by them. The court can investigate the matter and the loses suffered, through informed sources, and decide as it thinks proper. In addition to the above, if the accusers wishes and agrees to pay the expenses, he can public the findings of the decision of the court.

Subchapter F Ц Illegal Competition

Article 55: If the marks or names used by a merchant should interfere with those used by another merchant, and causes doubts, the use of such marks and names is not allowed for the first-mentioned merchant. In case a person uses such interfering signs, though not through any fault, the court can order the removal of names and designation if the interested party so requests.

Article 56: Any kind of fraudulent act and cheating is prohibited in commercial activities.

Article 57: A merchant, for the purpose of competition, cannot publicize untrue statements such as will prove injurious to the interest and business of a fellow merchant.

Article 58: A merchant is not allowed to publicize statements contrary to fact about the origin, quality, and importance of his merchandise to attract the customers of another merchant who sells the same goods; or to publicize certificates and awards which have not really been received by him, or to commit fraud for the same purpose.

Article 59: No merchant is allowed to bribe the employees of other merchants or factories for the purpose of receiving information about customers and attracting their customers.

Article 60: A merchant cannot give a letter of certificate of good services and conduct to a person for the purpose of fooling another merchant.

Article 61: A merchant acting contrary to the above Articles is subject to payment of the losses suffered by others.

Article 62: In case a commercial information agent, whether intentionally or through negligence, issues false statements concerning the financial strength and moral conduct of a merchant, the agent is subject to pay the losses suffered by the merchant. To correct his statement will not acquit the agent. The court, in addition to ordering him to pay the losses, can also order the agent to pay for the publicity of the problem to be made known to the public through one or several papers.

Article 63: A merchant who has intentionally committed acts in violation of this Chapter, in addition to paying the losses suffered by others, is subject to fine and imprisonment as well.

Article 64: If a person receives punishment or pays for losses, and repeats the same act again, his punishment may be doubled. A complaint leading to the punishment of a person can be made only by an interested person or by a local Chamber of Commerce. Withdrawal of the personal complaint invalidates the common rights.

Subchapter G Ц Commercial Books

Article 65: Every merchant must keep three books Ц a book showing his capital, a ledger, and a journal. Moreover, he must regularly keep a copy of all outgoing letters and telegrams and the original of all incoming letters and telegrams with all papers relating to the payment.

Article 66: A merchant may, if he keep other books for his business but these books are not subject to the regulations mentioned in the following Articles.

Article 67: The merchant does not have to enter everything personally on the books; he may hire a person to do so, but the merchant himself is personally responsible for anything in his books.

Article 68: The books kept according to Article 65 are to be taken personally by the merchant or his agent to the local registration office for marking and sealing. The registration should mark all the pages with ink and seal them. Then the office will note the total sheets of each book on its first and last pages. After nothing the date besides the seals of the first and last pages, the registration office should also include there a certified signature.

Article 69: The book containing the asset items of the merchant should contain the following:

The cash on the first day, as well as the approximate value of all movable and immovable goods and properties specified for his business, as well as the value of all shares and bonds issued based on current prices, and all the receivable claims whether based on documents or otherwise.
All receivables and credits due by virtue of contracts or any other means.
After determination of net assets, that is, assets minus liabilities, the merchant at the end of each financial year must prepare a balance sheet indicating assets and liabilities of his business. The balance sheet must be made out at least once a year.

Article 70: At the start of the business, when the real capital of the merchant is determined according to Article 69, and is recorded in the daily journal, all transactions relating to buying and selling, whether commercial or ordinary, as well as his personal expenses, shall be noted by daily in the journal.

Article 71: All correspondence by the merchant should be briefly registered in an indicator filing system in original and copy, as well as all outgoing and incoming letters and telegrams.

Article 72: All decisions reached by the general assembly and the board of directors, with the names of all those present and the date of the meeting, and such other information which might complete the record of the meeting, should be entered into the Decision Book and undersigned, in the name of the company, by all those authorized to do so.

Article 73: Merchants or their successors who might continue in business must keep the required books (from the date of the last entry mentioned in the books), and letters and telegrams from their date for a period of fifteen years.

Article 74: All books and related commercial correspondence pertaining to inheritance, partnership, or bankruptcy, at the time of their surrender can be investigated both by the court and by interested parties.

Article 75: During the hearing of a disputable case, the court can, by its own wish or by the request of one of the parties, order the commercial books and papers to be shown.

Article 76: In case the books and papers to be shown are in the possession of a court different from the one in which the case is heard, and if it is difficult to show them in the court, the court can formally request the other court having possession of the required papers to send a correct and reliable copy of the required parts.

Article 77: The responsibility which arises from not having necessary commercial books or the fact that books have not been legally and properly kept rests personally on the owner of a business and the merchant cannot put the blame on others and acquit himself.

Article 78: In case the necessary commercial books are destroyed by such accident as fire or other hazards during the time in which they were supposed to be kept safely, the merchant or his legal agent in a month's time should bring the matter to the attention of the related court. The court after investigation and after satisfying itself with the accuracy of the matter , will provide the person with certificate to this affect.

Article 79: During a dispute between two merchants over business transactions, the legal commercial books could be used, under the terms mentioned in Articles 80 and 84, as evidence.

Article 80: The contents of the legal business books may be used against the owner or his followers and descendents, regardless of whether legally kept or not, but these contents cannot be used to the advantage and benefit of the possessor unless kept according to the regulations affecting such books.

Article 81: If the contents of the books of a merchant are according to regulations but should be contradictory to the contents of books of another merchant, the contents of the books of any one of the parties, if proved false with strong evidence and reliable reason, could lose their effect as evidence.

Article 82: If the books of a merchant are legally kept and the books of the opposite party are illegally kept, or if he should not happen to have any books, or if he refuses to submit his books for examination, the contents of the books of the first-mentioned merchant could be used against the second one , but if the second merchant proves the falsehood of all the statements brought against him with strong reasons and evidence, the contents of the books of the first merchant lose their proving effect.

Article 83: If a merchant agrees in court to accept the contents of the books of an opposition party, and if the opposition party refuses to submit his books for examination, the court may make a decision favorable to the first merchant, according to the judgment of the court.

Article 84: In case the court finds the contents of the books of a merchant kept according to the law, and wishes to use these contents in favor of the owner, the court can, for the sake of satisfying itself as to the accuracy of these contents, and fulfilling its moral obligation, undertake an additional investigation, and after satisfying itself can make the necessary decision. This supplementary investigation should in no way more than fifteen days.

Subchapter H Ц Business Agents

Article 85: A person delegated by a merchant to engage in the business activities of the merchant in any locality, whether it be that of the business center or not, is called a business agent for the merchant.

Article 86. A merchant is responsible for those activities and transactions of his agent which he has delegated to him. If a person is agent for more than one merchant, each merchant is responsible in turn for the transactions of the agent. If a person should happen to be delegated as an agent by a business firm, the responsibility of each of the partners, or stockholders, of the firm will determined by the kind of business.

Article 87: The agency right to person is delegated explicitly or incidentally. The document showing the explicit agency must be registered in the registration office of the locality in which the agent is working and it should also be advertised in that locality. Otherwise, the contents of Article 88 are applied.

Article 88: If a person should be implicitly delegated to represent a merchant, the agent's right as far as third parties is concerned is unlimited and his delegation includes all transactions that can be made during that specific business. If the agent should enter into business transaction with a third party, and if the delegation merchant should be unable to prove that the third party knew of the limitation of the agent's rights during the courses of the transaction, the claim of the delegation merchant regarding the limitation of his agent's rights against the party is not valid.

Article 89: If an agent executes his transactions always in the name of the principal, namely, the owner of the establishment, he must, at the time of signing, put beside his name the name of the merchant and his identify or his business title and add the word "for" or an equivalent word; otherwise, he will be personally responsible for transactions that he has executed. If other people face problem with the agent in transactions that are delegated to him, they can also bring suit against the principal.

Article 90: In case a person goes into an agency without being authorized by a merchant, and his transactions do not receive the approval and certification of the merchant, the self-appointed agent is subject to pay the losses suffered by an innocent third person.

Article 91: An agent cannot, without the explicit approval of his principal, execute any transactions in his own name or in the name of or in partnership with other persons. An agent deviating from this is subject to pay any loss suffered through his transactions. But if the agent in doing so makes a profit, the merchant is entitled to it.

Article 92: Invalidating or limiting an agent's right is subject to registration and advertisement.

Article 93: An agent can bring suit against others in the Court in the name of his Principal regarding the transactions such Debts and etc, delegated to him and others can also bring suit against the agent.

Article 94: The contents of this chapter are applicable for the agents of foreign firms, in whose names they are executing transactions in Afghanistan.

Subchapter I Ц Commercial Traveler Agents

Article 95. Those employees allowed and permitted by a merchant, through letters, advertisements, or circulars and other documents of this sort, sent to other places, to carry out business transactions, are called traveler agents. The principal of such agents are responsible for the results of those businesses which have been delegated to these agents.

Article 96: The contents of Article 89 are also applicable to traveler agents but these agents, when signing, cannot use the word "for" or its equivalent. They must write just the names of their principal.

Article 97: Just as the traveler agents are not supposed to take substitute for the goods they themselves have not given, they cannot prolong payment of the price or reduce the amount thereof, but they can in the name of their principal accept propositions made in the name of their principals and take such actions as might be necessary to safeguard the interests of their principals.

Subchapter J Ц Salesmen

Article 98: Persons authorized to sell goods in commercial establishments, whether retail or wholesale, are called salesmen. Salesmen are entitled to claim and receive the price of goods sold by them on the premises. In the absence of a formal authorization from the principal, the agent is not authorized to solicit and receive from buyers payment for merchandise sold other than on the sales premises.

Subchapter K Ц Brokerage

Article 99: A person not specifically committed to the service of either of two business parties, who acts, for a fee, as mediator to facilitate the execution of a business transaction and chooses this as his profession, is called a broker. Brokers are entitled to the rights and bound by the obligations in this chapter.

Article 100: If contracting parties do not want documents, or if because of local custom the documentation because of the kind of goods should not be deemed necessary, the broker must give both parties documents containing the names and complete identities of the contracting parties as well as the terms of contract, the kind and quantity, and the time of delivery of the goods. These documents should be arranged just after the conclusion of the contract and should be signed by the broker.

Article 101: Concerning transactions not necessarily taking place at once, documents should be signed by contracting parities, and the document signed by one should be given to other. In case one of the parties should refuse to sign or accept the document, the broker must at once inform the other party.

Article 102: The broker is responsible for the accuracy of the signature of both parties on the document which is executed by him, and also for the accuracy of the last of the endorsers.

Article 103: If the broker by whom the transaction has taken place arranges the document in such a way as to leave identify of the second party to be known in the future; and if the first party accepts the document and after identify of the second party becomes known makes no objection, the party accepting the document is obliged to use the terms of the real contract. The time during which the identify of the other party should be known depends on local custom, and in the absence of such custom is determined as seems appropriate. If the identify of the unknown party should not be known during the prescribed time, or if it should be known but the other party should have objections to it, the accepting party is entitled to claim the execution of the transaction by the broker personally or bring suit against him. In spite of this if the accepting party does take advantage of the situation when the broker refers to him, his claim will not be heard. In case the broker executed the transaction personally the rights which according to the contract belong to the other party are owned by the broker.

Article 104: The broker must keep samples of all goods sold by him until such time as transactions are completed. If both parties disregard explicitly the keeping of samples, or if according to local custom because of the kind of the goods it should not be deemed necessary to keep samples, the broker can dispose of the deposited samples. Brokers should mark the samples for the completion and verification of the transaction.

Article 105: The broker does not have authority to accept the price or the goods prescribed in the contract.

Article 106: The broker should behave as an efficient and honest merchant. The broker is responsible for losses caused, to each of the parties, by his negligence.

Article 107. To side with one of the parties to such an extent as to interfere with fair mediation, or to profit from one side with bad faith in mind for the other, invalidates the broker's claim for his fee and brokerage expenses.

Article 108: After the completion of a business deal, or if subject to a condition after a realization of condition and completion of the contract, the broker is entitled to claim his fee. This claim is valid for one year from the date on which the contact has been made. If the contract should not take place, or if the condition should not be realized, the broker is not entitled to the fee for actions he may have taken.

Article109: (in the eng book ? ) The amount of a broker's fee is determined by agreement and regulations. In case no such agreement or regulation should exist, it is determined according to local custom.

Article 110: If the payment of reasonable expenses is not subject to the completion of the transaction, the broker is entitled to claim it.

Article 111: In case both parties have not decided who should pay the broker's fee, and if there are no regulations governing, the matter should be settled through local custom. In the absence of local custom to this effect, half of the fee should be paid by each of the parties.

Article 112: The broker must record all transactions taking place by his mediation and according to Article 100, he should daily sign in the journal for each transaction entered by him. The contents of the Articles concerning the daily journal of the merchants are applicable to the journal of the broker; the broker must give a sign, whenever one of the parties requests for the copy of his daily journal related to the transaction.

Articles 113: The court, in order to prove the details of a case, can ask for the original of copy of the document and other papers as well as the daily journal of the broker as it deems necessary.

Article 114: A broker acting contrary to the Articles relating to his daily journal is fined a cash amount.

Article 115: Persons doing brokerage among small businessman are not subject to the content of the Articles relating to the document and journal.

Chapter II- Commercial Companies

Subchapter A Ц General Regulations

аArticles 116: Commercial companies are those companies (shirkat) which are created for the purpose of carrying out commercial activities in one or several localities.

Article 117: Commercial companies are of the following kinds:

a. General partnership ( Sherkat-Tazamoni in Dari, Kollektif Sirkat in Turkish)

b. Special Partnership (Sherkat-Tazamoni-Mokhtalat in Dari, Komondit-Sirkat in Turkish)

c. Limited liability company (Sherkat-e-Mahdud-ul-Massoliat in Dari, Limited Sirkat in Turkish)

d. Corporation (Sherkat Sahami in Dari, Anonim Sirkat in Turkish)

e. Cooperative ( Sherkat Toohwine) companies

Article 118: Commercial companies can have legal existence and therefore are entitled to contract and promise under their own title, and execute transactions. These companies can appear in the courts as debtors or creditors, and own movable and immovable properties.

Article 119: Items taken as capital in commercial firms are as follows:

Movable material goods, as cash, articles, and animals
Non-material movable goods, as royalties, patents, trade marks (commercial, industrial)
Any kind of immovable property
Profits and privilege from the use of movable and immovable properties
Products and processes
Commercial credit and good will
Business center (place of business)

Article 120: The right of establishment, of rent, of name, of title, of patent, of trade mark, of models and drawings which are used in commercial and industrial services, are considered as elements of the business firm.

Article 121: Any partner having promised to pay his share of the capital of the company is indebted to and responsible to the company. Therefore, if partner should be late in paying the company, and if he is responsible for a loss suffered by the company, he must pay this to the suffering firm.

Article 122: If the share of the capital should be of cash kind by delay in payment of which the company has suffered, in addition to the loss that should be paid in accordance with Article 121, the merchant at fault should also pay the legal interest on it from the date it was due.

Article 123: If a partner, in place of his share in the capital of the firm, should direct the firm to collect the claims he has on other people, until such time as these claims have been collected by the company the partner is responsible to the firm. There being no understanding to the contrary if payment on the part of others indebted to the partner of the firm should fall due within one month from the date of the establishment of the firm, they must be collected. If the money cannot be collected in a month, the interest on them must be paid proportional to the time elapsed. If part of the claims should be collected, the uncollected part is also subject to this regulation.

Article 124: The price of articles brought in as capital must be determined in the contract. If this has not been done, the price used in the market on the day the articles are brought to the firm should be taken as the base. In case there should not be such articles on the market, or there should not be their prices in the stock exchange on that day, the opinions of informed individuals should be respected by both parties.

Article125: The ownership of goods brought to the firm as capital is delegated to the company unless understanding should exist to the contrary.

Article 126: Regarding payment of interest for loss or damage, as mentioned in Articles 121, 122, and 123, prior information to the party concerned is not necessary. This provision does not negate the termination rights of the partner as contained in Article 175.

Article 127: Every partner is supposed to supervise the affairs of the firm as that of his private business with honesty and good will.

Article 128: None of the partners are entitled to ask for a wage for the work they do regarding company affairs, unless this is mentioned in the contract.

Article 129: Each of the partners is responsible for whatever loss may be suffered by the company through his negligence, fault, or deviation from his line of authority and duty. He cannot escape this loss because he has been useful to the company somewhere else.

Article 130: If employees of a company are paid bonuses and rewards for the services they render out of profits which the company makes, the employees are not considered partners of the company. Although this payment, partially or wholly, may constitute a gain in behalf of these employees, this payment will not have the quality of a partnership.

Article 131: If the division of profit and loss are to be distributed is not mentioned in the contract, each person receives his profit and loss proportional to his capital.

Article 132: If the division of either loss or profit is mentioned in the contract, the other is also distributed in that manner.

Article 133: If the written agreement should restrict the profit to one or some of the partners, or if it excludes one or some of the partners from the loss, such agreement is not valid. In such case the distribution is taken as unknown and the profit and loss should be distributed in accordance with Article 131 among the partners. In the case of a partner whose endeavors and work is taken as capital in the firm, and who is not affected by the loss of the firm according to written agreement, this arrangement is valid.

Article 134: If a company with definite stated term of existence continues to do business after the expiration of that period, it will be construed as having an indeterminate or indefinite existence thereafter.

General Partnership

Part One

Article 135: A general partnership is one which is established under a definite title for the purpose of carrying out business transactions of two or more persons with collective responsibility. If the ownership of the company should not suffice to pay the debts of the company, each of the partners is responsible to pay all the debts of the company.

Article 136: General partnership companies should have written contracts.

Article 137: The contracts of the general partnership companies must contain the following items:

Date of contract
Name, identify, address, and such information as might distinguish the partners. If another company be a partner, the title of that company.
business location
The fact the company is a general partnership company
The title of the company
The names of all the partners authorized to sign in the name of the company with the explanation as to whether these people are singly or collectively authorized to sign
Subject of business
The capital share of each partner and the approximate value of non-cash capital with the manner in which this approximation has been reached
Each partner's share in loss and profit
The date of establishment and termination of the company, and such other items as the partners might think useful.

Article 138: Within a month from the date the a branch outside the region where it is registered, it must register its contract details in the locality company is established, persons establishing a general partnership company must register and advertise a copy of the contract in the locality where the office of the company is situated.

Article 139: If a general partnership company should establish as well.

Article 140: After a company has been registered and advertised, if any changes are brought in a general partnership company regarding its title, its business location authorized signing partners, withdrawal or conclusion of partners, increase or decrease of capital, going out of business before or continuing beyond the specified period, or joining another company Ц all these details must be put in a statement signed by all partners. This statement, together with the proper supporting documents, should be submitted to the related court for certification, after which it should be registered and advertised.

Article 141: Details that must be registered and advertised according to Articles 138,139, and 140, cannot be used against a third person before registration and advertisement. If before registration and advertisement a transaction should have taken place in the name of the company, the company is responsible to the third party. In case the company has not been registered and advertised, and if the partners should not admit the existence of the company, third parties could, by whatever means and evidence, prove the existence of the company.

Article 142: If the registration and advertisement of a general partnership company has not taken place during the period of time prescribed in Article138, and does not take place later, each of the partners is entitled to ask from the related court the dissolution, but must first inform the partners, through the registration office, about the matter. In case the court agrees to the dissolution, the dissolution is in effect in the case of the partner asking dissolution from the data of advertisement. If the company should be dissolved in this manner, until the end of registration and advertisement, whatever transactions are made in the name of company do not damage the interest of third parties.

Part I Ц Relation among Partners

Article 143: Partner relationships are affected by the written agreement among the partners of a general partnership company. Where there is nothing implicit in the agreement to this effect, the contents of this Chapter apply.

Article 144: According to the written agreement, if not explicit, the administration of the company, with the majority vote, could be delegated to one, a few, or all of the partners, or delegated to a person or persons outside the company. If the administration of the company has not been delegated to anyone in the manner mentioned above, each of the partners may be considered authorized to the affairs of the company.

Article 145: In case the administration authority of the director is determined according to the written agreement of the company, the partners cannot limit his authority or dismiss him. If strong reason should exist, that is , if the director neglects his duties or is unable to administer the authority of the director could be limited or he could be dismissed upon request of one of the partners to the Court.

Article 146: A director appointed after the written agreement and by the decision of the partners can be dismissed by majority vote. If a majority vote is not received for his dismissal, any one of the partners can refer the matter to court and, with strong and valid reasons, ask his dismissal.

Article 147: If the administration of the company should be delegated to all or some of the partners, each of them singly is authorized to administer. If some of the partners responsible for the administration of the company should not agree with the execution of a certain matter, the other authorized partners can settle this with a majority vote. If it is mentioned in the agreement of the company that decisions should be reached by the alliance of the administering partners, this should be observed unless an emergency exists where delay might prove injurious. If the directors should not be able to reach an agreement in voting, the matter should be brought to the attention of the general meeting of the partners for decision.

Article 148: Ordinary matters and transactions effecting the purpose and subject of the company relate to the administration of the company. Where the director finds it profitable for the company, he is authorized to take action and judge. Important matters such as contributions, price, transfer of immovable properties, securities, and other matters which are other than ordinary activities must be decided by vote of the partners.

Article 149: If a partner should take a loan from the company or collect a sum of money in the name of the company (provided there is not anything against this is in the written agreement), and does not pay this sum in due time to the company, in addition to paying the original sum he has to pay interest for the late period as well.

Article 150: No partner is allowed to transfer his share to a person outside the company in part or in full without the approval of the other partners. In case such a transfer does take place, it is of no effect to the partners or the third parties, and loss caused by the act is solely directed towards the transferring person.

Article 151: A partner authorized to administer the company cannot, without the approval of other partner, accept an outside as a partner in the company, or substitute him for himself in the administration.

Article 152: If in the bylaws or contract of the organization of the company there is a condition for payment of interest for the paid capital, this stipulation is acceptable.

Article 153: The business duration of the company is until the end of the lives of the partners, unless otherwise specified in the contract. In spite of this, if a company's duration is not definite and the nature of business activities is such as to limit the existence of the company, its life span is considered that of the date of compilation of the activities.

Article 154: A partner who is not the director is entitled to get information on the activities of the company as well as its financial status. A contract negating this fact is not valid.

Article 155: Decision regarding a alterations and adjustment of the contract should be made with the agreement of the partner and other decisions should be reached through the majority vote of the partners, unless otherwise stated in the contract.

Article 156: The director, at the end of each fiscal year, according to a balance, should prepare the profit and loss statement of the company and determine the share of each partner according to it.

Article 157: A partner, without the agreement of the partner, cannot be made to complete his share of the loss of capital, but the mount of loss of capital of the partner could be paid from the profit made in subsequent years, unless there should exist in the contract a provision different from this.

Article 158: A partner cannot execute a business transaction of the company in which he is a partner as a separate transaction in his own or someone else's account without the approval of the other partners. Similarly, he cannot be a responsible member of another company which might be engaged in the same kind of business. If the partners of a newly established company should happen to know that one of the company, at the time of joining the company, has been a responsible member of another company, and if the company do not decide explicitly on his separation from the other company, his membership in the other company is considered to have been accepted.

Article 159: If a partner should act contrary to Article 158, the company is entitled to claim for losses or the company can accept transactions made in the name of the partner or in the name of al third person in the name of the company. The preferences of one of the above two steps rests on the decision of the partners. If the partners should not protest within six months of the date they are informed that their partner is a member of another company, or within six months of the date they are informed of the execution of his transactions, their right to protest is invalid, but they are entitled to ask the dissolution of the company.

Part III Ц The Relation of the Partners with Third Parties

Article 160: A general partnership company, as far as third parties are concerned, is in existence as of the date of registration and advertisement.

Article 161: The partners' relationship with the third party is bound up with the persons who have the control and ownership of the company except where provisions have been made to the contrary in the bylaws and have been registered and announced.

Article 162: The manager appointed on behalf of a company may, in that capacity, sign all legal transactions in the name off the company and bind the company on his individual performance. Provision may also be made to negotiate through agents if they act in good faith and good intention on behalf of the company. Provision may also be made, if formally authorized, for a group of the shareholders to bind the company on their actions.

Article 163: The transactions made by the directors of the company in the name of the company relating to the company itself must be debited and credited regardless of whether explicitly stated or not.

Article 164: The partners are responsible collectively and individually for the debts of the company. Any term contradicting this statement shall not be valid as far as third parties are concerned.

Article 165: As far as debts and promises are concerned, suits could be brought first against the company and, if in vain or if the company should be dissolved, against the partners. In the meantime, the opposition party can ask, through the court, that the properties of the partners be under control.

Article 166: Any decision proclaimed by the special court with respect to the operations of the company shall not be individually applicable to the shareholders of the company.

Article 167: In the case of bankruptcy or liquidation of a general partnership company, the debtors of the company have priority over the personal debtors of the partners.

Article 168: The bankruptcy of the company is not taken as the bankruptcy of the partners. But if the bankrupt company should not be able to fulfill the demands of the debtors, the debtors can claim a suit against the partners, and if their property should not suffice the claim then the partners are taken as bankrupt by the court. Among the personal creditors, those who have legal claim upon the assets of the company have priority claims before the partners of the company.

Article 169: Partners of bankrupt companies, because of their capital contribution, may not withdraw or make other uses of company assets. However, they may claim their loans and other claims from the company just like the creditors of the company.

Article 170: A person indebted to the company cannot escape the debt if a partner of the company is indebted to him. Neither can a partner escape the debt he owes to the company if a person indebted to him happens to owe the company. But if a debtor of the company according to the Article 165 and 168, should not be able to receive his money, and if he refers to the partners, and if the partner happens to have personal claim on the debtor of the company, in that case he can use his claim to pay the debt of the company.

Part IV Ц Dissolution, Examination, Expulsion of Partners

and Amalgamation with other Companies

Article 171: A general partnership could be dissolved in the following ways:

1. With the expiration of the duration of the company.

2. With the unified opinion of the partners (provided that the bylaws of the company make no indication that such a resolution shall be made by the majority vote of the partners).

3. With the decision of bankruptcy of the company by the court, or by the agreement of the partners and debtors on the bankruptcy of the company.

4. With the decision of the court, based on the strong and true reasons submitted by one or more partners to the effect of its dissolution.

5. With the completion of the activities of the company.

6. With an announcement by a partner to the effect that the company is dissolved, provided he has sufficient authority based on the contents of the contract

7. With the announcement of dissolution by one of the partners when the company's duration should be indefinite.

8. With the loss of two-third of the capital, provided the partners do not complete the capital or are not satisfied with the remaining capital.

9. With annexation to another company.

Article 172: After the dissolution of the company, the directors are not supposed to execute transactions in the name and account of the dissolved company. If they act otherwise, the responsibility that so arises is directed toward the directions without limitation until such time as the dissolution is legally registered and advertised, and all the partners have responsibility to the third parties.

Article 173: If the contract of company should exclude certain reasons as the causes of dissolution, it is valid, but if it absolutely excludes all the reasons as the cause of dissolution, it is invalid.

Article 174: If a company should be established for an unlimited period, any of the partners can, at least six months before the end of the transactional year, inform the partners through announcement issued by the registration office intention to dissolve the company.

Article 175: Companies established for limited or unlimited duration may be dissolved by decision of the court, through the request of a company presenting strong reasons.

The strong reasons which cause the dissolution of a company are as follows:

1. Impossibility of realization of the purpose of the company for any reason.

2. Dishonesty of a partner whether in administrative or accounting affairs

3. The principal duties delegated to a partner not being performed.

4. Misusing the title or the properties of the company by a partner for personal benefits.

5. Disqualification and incompetence of a partner because of a continued sickness, or other reasons which will disable him to take part in the business affairs of the company.

Article 176: In order for a request to be heard to dissolve a company because of failure of a partner to supply his share of the capital, a warning must first be sent to the partner.

Article 177: If the duration of a company should be limited, or if it should depend on the life of one of the partners, after the duration or the death of the partner the company is considered existing for an unlimited period of time in order to complete outstanding business transactions.

Article 178: If it should be stipulated in the contract of the company that the company is considered dissolved in case of the death, bankruptcy or incompetence of one of the partners, the heir of the deceased, the legal financial executor of the bankruptcy, or the legal counsel or custodian of the incompetent should without delay inform the partners of the matter. If the delay should prove injurious to the business of the company, until such time as the partners will reach a unified decision about the matter, the legal executors of the company should execute the business of the company. Also, every partner delegated to a specific job should continue temporarily in that capacity. In such a case the temporary administration is in effect, the company is considered to exit.

Article 179: If there should not be an understanding about the continuation of the business of the company with the heir of a deceased partner, the partners, after the death of one of them, with the approval of his heirs, can continue the company. If the heir does not happen to agree, the partners can pay out his shares and go on with the business of the company.

Article 180: In case of the death of a partner, if the continuation of the company by the heirs of the deceased and the rest of the partners is clearly stated in the contract, it is up to the heirs to decide their contribution or separation form the company as a general partnership partner. In case the heir agrees to go on with the company, the rest of the partners must agree with him. But if the heir should not agree to go on an a general partnership company member, he can request to be accepted in the company as a partner but with a limited responsibility proportional to the capital and shares of the deceased partner, and the decision to accept his request is up to the rest of the partners.

Article 181: The heirs of the deceased partner must make their decision know within one month of the death of the partner whether they will remain in the company as a general partnership company member. During this month they will be considered as partners with limited liability. If they do not make their decision know during one month as limited liability partners, after the expiration of that date they will be taken as a general partnership company partner. If the heir be minors, regardless of the contents of the contract they cannot be considered as members of the general partnership company, but with the request of their guardians or executors they can be accepted with limited responsibilities, if the rest of the partners so agree.

Article 182: If any partner becomes incompetent, the provisions of Articles 179 to 181 will be applicable.

Article 183: In case of the bankruptcy of one of the partners (unless otherwise stated in the contract), the bankrupt partner is expelled from the company. In this case settlement, regarding the rights of the bankrupt, will be carried out either through him or his legal executor.

Article 184: If the request to dissolve a company should be made because of the reasons related personally to one of the partners, the court can, on request of other partners and after investigation, make a decision to continue the company and expel that partner.

Article 185: If a partner requests the dissolution of a company whose business duration is unlimited, the rest of the partners can reject the dissolution, expel the partner, and continue with the company.

Article 186: If a partner makes a request based on the rights prescribed in Article 175, through the registration office, and announces the dissolution of a company whose term of business is limited, the contents of Article 179 are applied to this situation.

Article 187: If a company is composed of two partners and one withdraws from the company, the remaining partner may obtain a court order transferring title to all the assets of the business without dissolution or liquidation. Settlement with the withdrawn partner will be made in accordance with the provision of Article 190.

Article 188: If there should be only two partners in a company, and if a person to whom a partner personally owes a debt should use his right to dissolve the company, as given him in Article 195, or if one of the partners should go bankrupt, the other partner can, within limitations established in Article 187, execute the business transactions of the company in his own account.

Article 189: If the dissolution of a company should be based on a reason other than bankruptcy, all the partners, according to Article 174, have to announce and register the matter of dissolution of the company. This action in the case of the expulsion of one of the partners from the company is also applicable. If the dissolution of the company or the expulsion of the partner be caused by death, the above formalities should be observed by all the partners including the heirs of the deceased.

Article 190: The shares of a partner who is expelled or who wishes to withdraw from a company are determined out of the assets of the company as of the date the expulsion demand has been made, unless otherwise stated in the contract.

Article 191: In case the shares of a partner are determined in accordance with Article 190, the sum is paid in cash.

Article 192: The shares of a partner who is expelled, or who has requested to withdraw, if the time of such settlement is indicated in the contract, shall be determined at that time. However, if it is not determined, it shall be determined when the first balance sheet is prepared, after the withdrawal of the partner is activated, the business is liquidated.

Article 193: A partner who is expelled, or has asked to withdraw, is to participate in the privileges and responsibilities of the transactions taking place before the expulsion is put into effect, but he cannot prevent the execution of transactions already acted upon and decided by the rest of the partners. If the clearance of the accounts should not be possible at once, he can ask, at the end of the accounting year, for the accounts of transactions which have taken place during the year. He is also entitled to request information on current transactions in progress at the end of the fiscal year.

Article 194: The expulsion or withdrawal of a partner, as it relates to third parties, is in effect as of the date of registration and advertisement of this matter, and before that date he is responsible to the third parties.

Article 195: If a person to whom a partner is personally indebted should not be able to get his claim from the personal properties of the debtor, he can, at the time of clearance, control through the court, the parts and shares of debtor in the company, or request the dissolution of the company at the end of the fiscal year; provided this request is made six months in advance. The company, or the rest of the partners can, before the order to dissolve the company should become effective, pay the debt and invalidate the order.

Article 196: If the personal creditor of a partner should use his power, in accordance with Article 195, to dissolve the company, the rest of the partners can decide upon the expulsion of the indebted partner and the continuation of the company. Similarly, they should inform the creditor. In this case, the partner is expelled at the end of the fiscal year from the company.

Article 197: Two or more general partnership companies can merge with each other to establish a new general partnership company, or both can join another existing general partnership company.

Article 198: In order for a merger of a general partnership to be in effect, separate decisions are to be made the related companies and should be registered and advertised.

Article 199: Each of the merged companies has to arrange its balance in unified forms and should advertise them. They should also make decisions as to the manner in which their debts will be paid and these decisions should accompany the balances.

Article 200: The decision to merge becomes effective three months after the date it has been advertised. If the merged companies pay their debts, or deposit the equivalent amount in a recognized bank, or if the persons to whom they are indebted agree with the merger, it is not necessary to wait three months. The receipt received from the bank for the bank for the money deposited there should also be registered and established. Each of the persons to whom the merged companies are indebted can, within three months, submit a protest to court on the matter of the merger. Until such time as the protester takes his protest back or the court has made the fiscal decision relating to the protestor, the amalgamation cannot take place.

Article 201: If during the period mentioned in Article 200 there should not be any protest, the matter of amalgamation become final. The remaining or the newly created companies are the sole executor for all the rights and responsibilities of the previous companies. If from the merged companies, a new company is created, its registration and advertisement are necessary.

Part IV Ц Liquidation (Clearance) of General Partnership Companies

Article 202: If there should not be any arrangements about clearance or liquidation in the contract of the company, clearance is executed in accordance with the contents of this part.

Article 203: The clearance of general partnership companies is the responsibility of the liquidating officers whose manner of election is set forth below:

Article 204: The liquidating officers (clearance officers) are either previously elected by the partners as recorded in the contract of the company, ort elected afterwards by the approval and decision of the partners. In this manner they could also be elected after the dissolution on agreement of the partners. Otherwise, all the partners or their legal executors are responsible for the clearance. In case of dissolution on request of any of the partners, it is possible for the liquidating officers to be assigned by the related court.

Article 205: The liquidating officers, whether assigned by the court or by partners, are assigned from among the partners or from outside.

Article 206: If the receivership or trusteeship in liquidation is composed of more than one person, it is essential that they work as a unit in the affairs of the liquidation. If one is delegated to perform independently on a given matter,, it is required that this be advertised and registered in the Registration Office.

Article 207: A liquidating officer is not allowed to delegate his duties to another liquidating officer or third party unless in the case of certain specific duties, in which case he can, from among his fellow liquidators, choose one or more persons to carry out for him, or give authority to a third person.

Article 208: In a company where transactions are under liquidation, one liquidating officer is sufficient to negotiate with third parties. If there is no danger to the benefit of the company, the transaction which is performed by one of the liquidating officers is valid.

Article 209: General partnership companies, after dissolution, until liquidation of a affairs, could be considered to exist for the purpose of clearance.

Article 210: When a general partnership company is under clearance, on all papers prepared in the name of the company the statement "Clearance of the general partnership company" should be added and signed by authorized clearance officer or officers. Otherwise no responsibility could be directed toward the company.

Article 211: The priority given to persons to whom the company is indebted over persons to whom partners are personally indebted is protected even after the dissolution of the company.

Article 212: If the assets of the company at the time of liquidation are insufficient to satisfy the creditors, and there are reasons for bankruptcy, the court can issue the decision to the effect of bankruptcy of the company.

Article 213: If the liquidating officers of the company are elected according to the contract of the company from among the partners of the company before dissolution, they could be dismissed by the unanimous vote of all partners. In case there is no unanimous decision, the court can order such removal upon request of any one of the partners.

Article 214: If the liquidating officers of a company should have been elected from among the partners after the dissolution, they can be dismissed by the unanimous vote of the rest of the partners. If a unanimous vote is not received, the dismissal can take place through the court, based upon the request of any of the partners with acceptable reasons.

Article 215: The liquidating officers not chosen from among the partners, elected either according to the contract of the company or by the decision of the partners, can be dismissed by the unanimous vote of the partners. If a unanimous vote is not received, they can be dismissed through the request of any of the partners by the court.

Article 216: The liquidating officer appointed by the court can be dismissed only by the court.

Article 217: At the time of dissolution of the company, if the receivers should previously have been selected, or if they should have been appointed by the court or the partners during the dissolution, the liquidating officers can invite the directors of the company to participate Ц or if directors do not accept the invitation, they can invite the officers themselves Ц in preparing an accounting report containing the assets of the company as well as balance sheet. If the liquidating officers find it necessary, they can refer to other informed persons to determine the value of the company's properties. The balance sheet and the assets accounts so arranged should be signed, in the presence of the liquidating officers, by the directors of the company.

аThe liquidating officers, after the signing of the general accounts, place all the properties of the dissolved company contained in the accounts, as well as its other papers, under their control and charge.

Article 218: The clearance officers are responsible for the safety of the property and rights of the dissolved company.

Article 219: The liquidating officers should execute the transactions started prior to liquidation. They should pay the debts and other claims on the company in cash. If the persons to whom debts are paid agree, the payment could be in kind. They should also collect the company's claims on others, and convert properties of the company into cash. These officers also execute all transactions and actions necessary for the collection of the properties of the company as well as the distribution of properties among the partners.

Article 220: The right to represent the company while in the state of liquidation, in the court and other places, rest with the liquidating officers.

Article 221: The liquidating officers cannot execute any new transactions not related to liquidation. In case they do so, they must assume any responsibility that might arise from such transactions.

Article 222: In case the liquidating officers are able to obtain any benefit for the dissolving company by affecting a compromise, they are authorized to seek appointment of a mediator toward this end, or enter negotiations to effect the compromise.

Article 223. The liquidating officers are permitted to sell the movable properties of the dissolved company according to the interests of the company, whether at auction or otherwise, but the immovable properties of the company, unless the opinion of the partners be otherwise, could only be sold by auction. The presence of minors or incompetents among the partners cannot prevent the sales of the movable and immovable properties.

Article 224: The liquidating officers can Ц with the permission of the partners, if appointed by them, or with permission of the court and unanimous opinion of the partners, if appointed by the court Ц execute temporarily the transactions which constitute the business of the company.

Article 225: The liquidating officers must pay the installment debts of a general partnership company which is liquidating as soon as possible in a discount manner, and the creditors of the company must accept this manner of payment.

Article 226: If the assets of a general partnership company should not balance claims on the company, the liquidating officers can refer to the partners for full payment of the debts of the company.

Article 227: If partners do not agree unanimously, the liquidating officers cannot sell all properties of the company in one lot.

Article 228: It is possible to extend or limit the legal authority of the liquidating officers by the unanimous vote of the partners or by decision of the court, whichever agency appointed them. In this case, the matter is to be registered and advertised. If the matter of limitation of authority has not been registered and advertised, it is with no effect as far as bona fide third parties are concerned.

Article 229: The liquidating officers, during the liquidation, are bound by the decision made unanimously by the partners about the liquidation. In case of bankruptcy, death, or incompetence of one of the partners, the contents of Article 230 are applicable.

Article 230: In case of bankruptcy, death, or incompetence of a partner, the right to participate in the decision to appoint, dismiss, or give directions to the liquidating officers is reserved to the lawyer or executor of the partner. The heir should unanimously appoint a lawyer. If this cannot be done, the appointment of the lawyer is up to the court.

Article 231: The liquidating officers can, after retaining the necessary amount to satisfy installments and payable debts of the company, distribute the remaining cash assets among the partners.

Article 232: In order for the liquidation process to be well organized and accurate , the officers must properly prepare the necessary books.

Article 233: The liquidation officers must report to the partners orally or in writing about the status of liquidation affairs when requested to do so.

Article 234: The liquidating officers must show all papers and books relating to the company's liquidation whenever the partners so request. The officers are not to prevent partners from copying the related books and papers.

Article 235: The liquidating officers, during liquidation, must deposit any money over 1,000 Afghanis in a recognized bank.

Article 236: At the end of liquidation proceedings, the liquidating officers must give an account of the clearance to the partners.

Article 237: All statements in the company contract relating to liquidating officers, together with directives decided upon by the partners and the court concerning their appointment, changes, and dismissal, are to be registered and advertised.

Article 238: At the end of liquidation, the liquidation officers, according to the contract or legal directives, must prepare a balance sheet containing the shares of the partner in the capital, profit, loss, and other items. This balance sheet should be submitted to the partners. If the partners raise no objection within one month, the balance sheet is considered final. After the passage of this period, if partners refuse to accept their respective shares, the liquidating officers are to deposit the shares of each in his name in a recognized bank.

Article 239: The net assets of the company, in accordance with the contract or decision later made, should be distributed by the liquidating officers. Unless otherwise stated by the contract or directed by the partners, this distribution should be made in cash.

Article 240: Just as liquidation officers are collectively responsible for deviations from the contents of this law to the partners and third persons, so they are collectively responsible for transactions of persons whom they employ or appoint, if contrary to the contents of this law.

Article 241: Liquidation officers appointed from among the partners cannot be paid salaries and wages unless so stated in the contract or by decision later made, but officers appointed from outside, regardless of whether the salary and wages have been mentioned or not, are entitled to be paid.

Article 242: At the end of liquidation, books and papers are to be deposited in a safe place designated by the partners, and should be kept for a period of 15 years. If partners do not agree about the place, sane is assigned by the court.

Subchapter C Ц Special Partnership Companies

Article 243: A company established under a definite title, for the purpose of trade, in which one or more partners have unlimited liability and the rest of the partners have limited liability with a definite capital, is called a special partnership company. The capital of the partner with limited liability can be into shares.

Article 244: Unless otherwise stated in this subchapter, rules governing general partnership companies apply to special partnership (Komandit) companies as well. Where it cannot be decided if a company is a general partnership or a Komandit company, it is considered to be a general partnership company.

Article 245: In the contract of a Komandit company, in addition to the requirement of Article 137, the names of the partners with limited liability, as well as the capital of each that has been paid or promised, should be entered, and should be registered and advertised.

Article 246: A partner with limited liability cannot submit his work, action, reputation, or profession (other than his scientific and technical invention), as capital.

Afghan Laws

Commercial Law (Commercial Code) of Afghanistan - 1955 - Usulnameh on the Commercial Law of Afghanistan