CORPORATE LAW

A participant may take part in managing the partnership's affairs in the manner provided by the Law and the charter; obtain information on the partnership's activity and examine its accounting and other records in the manner provided by the charter; receive income from the partnership's activity in accordance with the Law, the constitutive documents and resolutions of the general meeting; on liquidation, receive the value of the part of the property remaining after settlement with creditors or, by agreement of all participants, part of that property in kind; and terminate participation in the partnership by disposing of their stake in the manner established by the Law. Note that a right of free withdrawal is not among these rights.

Legal basisPara. 1 of Art. 11 of the Law of the RK on Limited and Additional Liability Partnerships

Participation can be terminated only by disposing of the stake — the Law gives no right simply to declare withdrawal. Two routes work. First, selling or otherwise transferring the stake to another participant or to a third party, subject to the pre-emption right. Second, a reduction of the charter capital by fully cancelling the stake of an individual participant by resolution of the general meeting. Loss of the right to the stake on any ground causes the participant to cease to be a member.

Legal basisSub-para. 5) of para. 1 of Art. 11, para. 2 of Art. 28, Arts. 27 and 29–31 of the Law of the RK on LLPs and ALPs

The stakes of all participants in the charter capital, and correspondingly their shares in the value of the partnership's property, are proportionate to their contributions to the charter capital, unless the constitutive documents provide otherwise. Any change in the contribution of even one participant — an increase or a decrease — leads to a corresponding recalculation of all participants' stakes. Acquiring a stake in the manner established by the Law means the acquirer joins the participants of the partnership.

Legal basisParas. 1 and 2 of Art. 28 of the Law of the RK on LLPs and ALPs

Yes. A participant may sell or otherwise transfer their stake in the partnership's property, or part of it, to one or more participants of that partnership at their choice, and may also pledge the stake to secure their own obligation to another participant. No consent of the partnership or of the other participants is required for these transactions, unless the constitutive documents impose additional conditions. A stake may be transferred or pledged before the contribution is paid in full only to the extent that the contribution has already been paid.

Legal basisParas. 1 and 2 of Art. 29 of the Law of the RK on LLPs and ALPs

Transferring a stake or part of it to third parties, and pledging a stake to secure a participant's obligation to a third party, are permitted unless the constitutive documents provide otherwise. The charter may provide that a sale to a third party is permissible only if certain conditions are met. In other words, partners may restrict outsiders from joining in advance — but this must be done in the charter, not by informal agreement.

Legal basisParas. 1 and 2 of Art. 30 of the Law of the RK on LLPs and ALPs

Participants have a right of pre-emption over third parties to purchase a participant's stake or part of it when it is sold by one of the participants. Every participant may exercise that right; where several wish to do so and the constitutive documents or an agreement of the participants provide otherwise, the right is exercised in proportion to the size of their stakes in the charter capital. A participant wishing to sell a stake or part of it to a third party must notify the other participants of that intention in writing, in the manner set out in Article 31.

Legal basisParas. 1 and 2 of Art. 31 of the Law of the RK on LLPs and ALPs

Two methods are available: a proportionate reduction of the contributions of all participants, or the full or partial cancellation of the stakes of individual participants. Where a participant's stake is cancelled, the stakes of the others change proportionately. From the moment the general meeting resolves to reduce the capital, the partnership must notify creditors under obligations arising after that resolution. Within two months of the resolution the steps set out in paragraph 4 of Article 27 must be taken.

Legal basisParas. 1, 2, 3 and 4 of Art. 27 of the Law of the RK on LLPs and ALPs

Net income received from the partnership's activity for a quarter, half-year or year is distributed by resolution of the ordinary general meeting devoted to approving the results of that period. The general meeting may also resolve to exclude the net income, or part of it, from distribution among the participants. Where distribution is resolved, each participant is entitled to receive their part of the distributed income in the manner set out in Article 40.

Legal basisParas. 1 and 2 of Art. 40 of the Law of the RK on LLPs and ALPs

The ordinary general meeting is convened by the executive body within the periods set by the charter, but not less than once a year. The meeting devoted to approving the annual financial statements must be held no later than three months after the end of the reporting financial year.

Legal basisParas. 1 and 2 of Art. 44 of the Law of the RK on LLPs and ALPs

An extraordinary general meeting is convened by the executive body on its own initiative and, where supervisory and controlling bodies have been formed, also at the demand of the supervisory board or the audit commission, or on the initiative of participants holding together ten per cent or more of the total votes. It is convened in the cases provided by the Law and the charter, and in any other case where the interests of the partnership require it.

Legal basisParas. 1 and 2 of Art. 45 of the Law of the RK on LLPs and ALPs

A resolution adopted in breach of the procedure for holding the meeting and adopting resolutions established by the Law, the charter or the partnership's internal documents, and likewise a resolution contrary to the law or the charter, including one infringing a participant's rights, may be declared invalid by a court in whole or in part. The application is made by a participant who did not take part in the vote or voted against the resolution. It may be filed within six months of the day the participant learned or ought to have learned of the resolution.

Legal basisArt. 50 of the Law of the RK on LLPs and ALPs

The general meeting may adopt resolutions only on the agenda items communicated to participants in the established manner. Amendments to the charter, including changes to the charter capital, the location and the name, and a number of other matters expressly named in paragraph 2 of Article 43 and defined in the charter, are decided under the special procedure in Article 48. Matters that participants demanded be added to the agenda are treated as included even if the body convening the meeting failed to perform its duties.

Legal basisParas. 1 and 2 of Art. 48 and para. 2 of Art. 43 of the Law of the RK on LLPs and ALPs

Unless the charter provides for a collegial executive body — a directorate, management board or similar — day-to-day management and the conduct of the partnership's affairs are carried out by a sole executive body: a director or manager. The Law's provisions on members of the executive body apply to the sole body as well, except those inherently linked to collegiality. In performing their duties, a member of the executive body must act in the interests of the partnership in good faith and reasonably.

Legal basisParas. 1, 2 and 3 of Art. 51 of the Law of the RK on LLPs and ALPs

The executive body's competence covers all matters of ensuring the partnership's activity that are not assigned to the general meeting or the supervisory bodies by the Law, the charter or documents adopted by the general meeting. It also covers those powers of the general meeting that fall outside its exclusive competence and have been delegated to the executive body under paragraph 3 of Article 43.

Legal basisPara. 1 of Art. 52 and para. 3 of Art. 43 of the Law of the RK on LLPs and ALPs

These are amending the charter, including changes to the charter capital, the location and the business name, or approving the charter in a new version; forming the executive body and terminating its powers early, and resolving to transfer the partnership or its property into trust management; electing and removing the supervisory board and the audit commission and approving their reports and opinions; approving the financial statements and distributing net income; appointing the audit organisation for a mandatory audit; approving internal rules; and resolving on the partnership's participation in other business partnerships. The full list is in paragraph 2 of Article 43.

Legal basisParas. 1 and 2 of Art. 43 of the Law of the RK on LLPs and ALPs

The charter capital is formed by pooling the founders' contributions. Its initial size equals the sum of those contributions and may not be less than the equivalent of one hundred times the monthly calculation index established by the budget law as at the date the documents are filed for state registration, except for partnerships for which the Law provides otherwise.

Legal basisParas. 1 and 2 of Art. 23 of the Law of the RK on LLPs and ALPs

All participants must pay their contributions in full within the period set by a resolution of the general meeting, and that period may not exceed one year from the date the partnership is registered. If a participant fails to do so, the partnership must pay the unpaid part of the stake out of its own capital — its net assets — or reduce the charter capital to the amount actually paid in.

Legal basisParas. 2 and 3 of Art. 24 of the Law of the RK on LLPs and ALPs

A limited liability partnership is a partnership established by one or more persons whose charter capital is divided into stakes of sizes determined by the constitutive documents. Participants are not liable for the partnership's obligations and bear the risk of losses connected with its activity only up to the value of the contributions they have made; exceptions may be provided by the Civil Code and the Law on LLPs.

Legal basisPara. 1 of Art. 2 of the Law of the RK on LLPs and ALPs

A legal entity is an organisation that owns, holds under economic management or operational control separate property, is liable with that property for its obligations, may in its own name acquire and exercise property and personal non-property rights and obligations, and may sue and be sued. A commercial organisation is one whose principal purpose is deriving income; a non-commercial organisation has no such purpose and does not distribute net income among its participants.

Legal basisPara. 1 of Art. 33 and paras. 1 and 2 of Art. 34 of the Civil Code of the RK

A legal entity that is a commercial organisation may be created only in the form of a state enterprise, a business partnership, a joint-stock company or a production cooperative. A legal entity may be created by one or several founders; the founders may be owners of property or bodies or persons authorised by them and, in the cases provided by legislative acts, another legal entity.

Legal basisPara. 2 of Art. 34 and paras. 1 and 2 of Art. 40 of the Civil Code of the RK

The location of a legal entity is the location of its permanently acting body. It is stated in the constitutive documents with the full postal address. In dealings with third parties a legal entity may not rely on a discrepancy between its actual address and the address entered in the state register; third parties, meanwhile, may send postal and other correspondence both to the address in the register and to the actual address.

Legal basisParas. 1, 2 and 3 of Art. 39 of the Civil Code of the RK

A branch is a separate subdivision of a legal entity located outside its place of location that performs all or part of its functions, including those of representation. A representative office is a separate subdivision located outside its place of location that protects and represents the interests of the legal entity and enters into transactions and other legal acts on its behalf. Neither is a legal entity; both are endowed with property by the entity that created them and act under regulations approved by it.

Legal basisParas. 1, 2 and 3 of Art. 43 of the Civil Code of the RK

A legal entity is liable for its obligations with all the property belonging to it. A founder or participant is not liable for the obligations of the legal entity, and the legal entity is not liable for the obligations of its founder or participant, except in the cases provided by the Civil Code, other legislative acts or the constitutive documents. The head of a branch or representative office is appointed by the authorised body of the legal entity and acts under its power of attorney.

Legal basisParas. 1, 2 and 3 of Art. 44 and para. 4 of Art. 43 of the Civil Code of the RK

Reorganisation of a legal entity — merger, accession, division, spin-off, transformation — is carried out by decision of the owner of its property or a body authorised by the owner, of the founders, or of a body of the legal entity authorised to do so by the constitutive documents, and in the cases provided by legislative acts by decision of authorised state bodies or by a court. A legal entity is deemed reorganised, except in cases of accession, from the moment the newly formed legal entities are registered.

Legal basisParas. 1 and 2 of Art. 45 of the Civil Code of the RK

On a merger the rights and obligations of each legal entity pass to the newly formed entity under a deed of transfer. On accession the rights and obligations of the acceding entity pass to the acquiring entity. On division the rights and obligations pass to the newly formed entities under a separation balance sheet. On a spin-off each of them receives part of the rights and obligations of the reorganised entity under the separation balance sheet. On transformation the rights and obligations of the reorganised entity pass to the newly formed entity under a deed of transfer.

Legal basisArt. 46 of the Civil Code of the RK

The owner of the property or the body that resolved on the reorganisation must notify the creditors of the reorganised legal entity in writing. A creditor may demand termination or early performance of the obligation owed by that entity and compensation for losses. Where the separation balance sheet does not make it possible to identify the successor, the newly formed legal entities bear joint and several liability for the obligations of the reorganised entity to its creditors.

Legal basisParas. 1, 2 and 3 of Art. 48 of the Civil Code of the RK

A legal entity is liquidated by decision of the owner of its property or a body authorised by the owner, or of a body of the legal entity authorised by the constitutive documents. By court decision a legal entity may be liquidated in the event of bankruptcy; invalidation of its registration because of irreparable breaches of law committed on formation; systematic carrying on of activity contrary to its statutory purposes; carrying on activity without proper authorisation or activity prohibited by legislative acts; and in other cases provided by legislative acts.

Legal basisParas. 1 and 2 of Art. 49 of the Civil Code of the RK

The owner of the property or the body that resolved on liquidation immediately notifies the registering authority in writing. The liquidation commission publishes in the official gazettes a notice of the liquidation and of the procedure and period for creditors to submit claims; that period may not be less than two months from publication. The commission takes steps to identify creditors and collect receivables and notifies creditors of the liquidation in writing. Once the period for claims expires, an interim liquidation balance sheet is drawn up.

Legal basisParas. 1, 2, 3 and 4 of Art. 50 of the Civil Code of the RK

On liquidation, claims are satisfied in the order established by Article 51 of the Civil Code: first, claims for compensation for harm to life and health, maintenance claims and claims of individual depositors in the cases provided; then settlements on remuneration for work and social payments, claims of creditors secured by pledge, arrears of taxes and other obligatory payments, and last, settlements with the remaining creditors. Claims of each rank are satisfied only after those of the preceding rank have been met in full.

Legal basisArt. 51 of the Civil Code of the RK

A legal entity is deemed created from the moment of its state registration. Liquidation is deemed completed, and the legal entity deemed to have ceased to exist, once the corresponding entry is made in the state register of legal entities. The state registration data are entered in the single state register of legal entities, which is open to public inspection.

Legal basisPara. 3 of Art. 42 and para. 10 of Art. 50 of the Civil Code of the RK