Journal of Research and Development in Comparative Law

Journal of Research and Development in Comparative Law

The Legal Status of Cross-Participations; A Comparative Study in Iranian, U.S., English, and French Law

Articles in Press

Document Type : scientific research paper

Authors
Gholamnabi fayzi chekab 1
Mohammadreza Pasban 2
Mohammadamin Karamnezhad 3
1 **Department of Private Law, Faculty of Law and Political Sciences, Allameh Tabataba'i University, Tehran, Iran**
2 Department of Private Law, Faculty of Law and Political Sciences, Allameh Tabataba'i University, Tehran, Iran
3 Master of Private Law, Faculty of Law and Political Sciences, Allameh Tabataba'i University, Tehran, Iran
10.22034/law.2026.2086672.1775
Abstract
The present basic–applied research, adopting a descriptive–analytical approach, undertakes a comparative study of the legal status of cross-participations corporate structures in the legal systems of Iran, the United States, England, and France, relying on the library method for data collection. In view of the prohibition on a company’s acquisition of its own shares under Article 198 of the 1968 Amendment to the Iranian Commercial Code, which nevertheless left open the possibility for subsidiary companies to acquire shares in their parent company, the fundamental question addressed in this research concerns the legal status of a subsidiary’s ownership of shares in its parent company, or cross-shareholding, within the aforementioned legal systems. A further question seeks to clarify the rights, legal effects, and distinctions between shares held by a subsidiary in its parent company and treasury shares. To this end, the rules governing cross-participations in these jurisdictions are examined through a comparative method, and relevant legislative developments as well as doctrinal viewpoints in each system are analyzed. The study demonstrates that, despite apparent similarities between treasury shares and shares held by a subsidiary in its parent company, the two possess distinct legal natures and are subject to different regulatory rationales. The findings further reveal that all examined legal systems, in pursuit of transparency, corporate governance, and the prevention of excessive concentration, have imposed restrictions on cross-participations and, in certain cases, have denied the exercise of all or part of the rights attached to such shares. In the Iranian legal system, recent legislation and the new draft Commercial Code indicate a movement toward more precise modern regulation of these relationships. This trend underscores the necessity for the adoption of a coherent and comprehensive regulatory framework governing cross-participations and its legal consequences, in order to ensure legal certainty and align domestic law with comparative developments.
Keywords
Cross-Participations
treasury shares
stock repurchase
Parent Company
Subsidiary
Subjects
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 [P1]مطابق نظر نشریه کلیه منابع به صورت انگلیسی و به ترتیب لحاظ گردید.
Journal of Research and Development in Comparative Law

Articles in Press, Accepted Manuscript
Available Online from 19 June 2026