The Nature and the Legal Effects of Settling Debts of State-owned Companies through Share Transfers

According to the Constitution of the Islamic Republic of Iran, Government is to be incumbent upon supplying public goods and services. Undoubtedly, to this end, government requires finances, and with regard to the financial restrictions, the possibility of supplying goods and services involves serious challenges, such as government debt for which the government must pay off. There are various ways to pay off the government’s debt and share transfers in state-owned companies is one of them. This paper attempts to investigate the foundations, natures and legal effects of paying off government debt. First, we review the concepts of state, and government debt pay off, then we analyze the existing legal challenges with respect to government debt pay off through assignment of state - owned companies’ shares. In conclusion, it is demonstrated that this method for paying off the government debt does not satisfy the goals referred in General Policies of the 44th Article of the Constitutional Law, it also does not result in surrendering the activities to the non-governmental sector.