Bankruptcy of public entities in Iran

Article 412 of the Commercial Code, which was enacted in 1311, has set the basic conditions of bankruptcy. According to this article, only merchants and companies can be declared bankrupt and there was a consensus in this case that the bankruptcy proceedings are not included public legal entities. Because none of them are not "merchant" and "company". But with the enactment of new Enforcement of Financial Judgments Act of 1394, significant changes occurred in the scope of bankruptcy to public legal entities. Because, according to Article 15 of this Act "... merchants and entities ..., if they are claiming insolvency, should request bankruptcy". However, due to the fact that, on the one hand, this article covers all the legal entities, both public and private, and, on the other hand, the probability of bankruptcy of legal entities of public is not consistent with legal logic, the review of consistence of these provisions to the public legal entities is very important. Based on the findings of this study should adhere to Article 15 of Enforcement of Financial Judgments Act, and say that the public legal entities are subject to bankruptcy proceedings, but in the current legal situation, this provisions is not including government, public institutions and municipalities. However, the including of bankruptcy regulations to other public legal entities is critical and the amendment to Article 15 is necessary.