Notion of shareholding company

TYPES OF CONTRACTS

1. Types of contracts

Contracts-. is an agreement between the parties on establishing, changing or cancelling of civil rights and obligations

Validity of contract from the moment of signing/ registration in state register

till: time provided for by the legislation time provided for in the contract complete fulfillment of obligations Form of contract Oral /Written

Types of contractual obligations

• Sale of goods

• Barter

• Leasing

• Transportation

• Loan

• Insurance

• Contract of services

Sale of goods a contract by which the seller must hand over the goods to the buyer’s ownership, business authority or operational administration and the buyer must pay the price in exchange for the goods.

(Chapter 25 CC) Form of the contract of sale of goods

• Legal entities – written form

• Real estate – written form + registration

• Natural persons – movable property – any form

LEGAL ENTITY

It is an organization which:

• has its separate property on the basis of property right, right of business authority or right of operational management;

• is liable for its obligations with this property;

• can in its own name acquire and exercise property and personal non-property rights and obligations;

• can be a plaintiff and a defendant in the court;

• has independent balance-sheet or budget.

Types of legal entities:

Commercial organization

Aimed on the receiving of profit

The income is distributed between the participants Types of commercial organizations state enterprise

business partners joint stock Non-commercial organization

Does not have the receiving of profit as the main aim

The income is not distributed between the participants

Types of non-commercial organizations:

Institution

Public foundation

Non-commercial joint-stock company

Religious association

Consumer cooperative society

Social fund

Legal entities can create associations.

n Legal entity shall act on the basis of the RK Civil Code, Law on each of the forms of legal entities, and other laws and foundation documents.

n Each legal entity shall have legal capacity, i.e. a capacity to have civil rights and obligations in connection with its activities.

n Legal capacity of legal entity shall arise at the moment of its creation and shall cease at the moment of completion of its liquidation.

n Legal capacity of legal entity engaged in such activity which requires to obtain a license shall arise at the moment of obtaining the licenses and shall cease at the moment of its removal, expiry or recognition as invalid.

Liability of legal entity

• Founder (participant) of legal entity or owner of its property shall not be liable for obligations of legal entity, and legal entity shall not be liable for obligations of its founder except for cases provided for by laws or foundation documents of legal entity.

• If bankruptcy of legal entity was caused by actions of its founder, then in case of insufficiency of funds of legal entity, the founder shall bear subsidiary liability before the creditors.

• Legal entity shall be liable before the third parties for obligations of legal entity's body which exceeded its powers set forth in foundation documents except for cases provided for by Item 11 of Article 159 of the RK Civil Code.

• Item 11 of Article 159 of the RK Civil Code.

NOTION OF SHAREHOLDING COMPANY

Shareholders are individuals, companies, or trusts, that own shares of a for-profit corporation. The individuals own a specific number of shares, which they each purchased at a specific price.The stockholders have invested their money to purchase these shares and they gain in two ways

• Through dividends paid based on the number of shares owned by the shareholder, and due to the corporation's profits, and
• By selling their shares at a profit.

Shareholder Rights

Shareholders have a right to inspect the company's books and records or sue the corporation for misdeeds of the directors and officers, for example. Common shareholders are also entitled to vote on major corporate matters, such as who sits on the board of directors and whether a proposed merger should go through. Shareholders also have the right to attend the corporation's annual meeting to learn about the company's performance, or listen to the meeting via conference call.

RIGHT OF PROPERTY

Property law is the area of law that governs the various forms of ownership and tenancy in real property (land as distinct from personal or movable possessions) and in personal property, within the common law legal system. In the civil law system, there is a division between movable and immovable property. Movable property roughly corresponds to personal property, while immovable property corresponds to real estate or real property, and the associated rights, and obligations thereon.

Property right

The right to possess The right to use The right to dispose

Right of business authority

• It is a material right of a state enterprise, which has received the property from the state and which exercises the right to possess, to use and to dispose towards that property, as it is provided for by the legislation of the Republic of Kazakhstan. (art.196 CC)

LIABILITY OF LEGAL ENTITY

•

Founder (participant) of legal entity or owner of its property shall not be liable for obligations of legal entity, and legal entity shall not be liable for obligations of its founder except for cases provided for by laws or foundation documents of legal entity.

• If bankruptcy of legal entity was caused by actions of its founder, then in case of insufficiency of funds of legal entity, the founder shall bear subsidiary liability before the creditors.

• Legal entity shall be liable before the third parties for obligations of legal entity's body which exceeded its powers set forth in foundation documents except for cases provided for by Item 11 of Article 159 of the RK Civil Code.

of legal entity or

Legal entity shall mean an organization which:

v Has on the basis of ownership right, right of business authority or right of operational management its separate assets;

v Is liable for its obligations by its assets;

v May in its name acquire and exercise proprietary and personal non-proprietary rights and obligations;

v Can be the plaintiff and the defendant in the court;

v Has independent balance-sheet or budget;

Has stamp with its name thereon.

JSC

Joint stock company

• is a legal entity, which makes the emission of shares with the scope to attract the money for executing of its activity

• its participants (shareholders) bear the risk of losses associated with the activities of company within the limits of the shares that belong to them.

• JSC is a public company, legal entity which issues shares to raise funds for carrying out its activities.

• JSC is liable for its obligations to the extent of the value of its property.

• JSC's capital charter consists of its founders' payments for shares at their par value and payments from investors for JSC's shares placed at a securities market.

• The JSC's supreme managing body is the general meeting of shareholders, which It has the exclusive competence of deciding on most vital aspects of JSC's activities

• Other bodies of the JSC are: the supervisory body – the board of directors and the executive body – the general director(s).

JSC’s disadvantages

ž More significant amount of a charter capital

ž More complex corporate structure

ž More complicated state registration procedure

ž Stricter reporting requirements

ž Mandatory requirement of publication of accounts

ž Strict internal regulations to enter into major transactions

ž Longer decision-making procedure

ž Special requirements to the procedure for entering into interested-party transactions.

2. Branches & representation offices

A location, other than the main office, where business is conducted. Most branch offices are comprised of smaller divisions of different aspects of the company such as human resources, marketing, accounting, etc. A representative office is an office established by a company to conduct marketing and other non-transactional operations, generally in a foreign country where a branch office or subsidiary is not warranted. Representative offices are generally easier to establish than a branch or subsidiary, as they are not used for actual "business" (e.g. sales) and therefore there is less incentive for them to be regulated.

Forfeit and its types

A forfeited share is a share in a company that the owner loses (forfeits) by failing to meet the purchase requirements. Requirements may include paying any allotment or call money owed, or avoiding selling or transferring shares during a restricted period. When a share is forfeited, the shareholder no longer owes any remaining balance, surrenders any potential capital gain on the shares and the shares become the property of the issuing company. The issuing company can re-issue forfeited shares at par, a premium or a discount as determined by the board of directo

LAPLimitation of active capacity

active capacity -citizen’s capacity by his own actions to obtain and to exercise his civil rights, to create for himself civil obligations and to fulfill them [art.17 CC]

Why: alcoholic or drug addiction which puts one’s family in difficult financial situation

Suretyship

SURETYSHIP, contracts. An accessory agreement by which a person binds himself for another already bound, either inwhole or in part, as for his debt, default or miscarriage.

As the contract of suretyship must relate to the same subject as the principal obligation, it follows that it must not beof greater extent or more onerous' either in its amount, or in the time or manner, or place of performance, than such principalobligation; and if it so exceed, ii will be void, as to such excess. But the obligation of the surety may be less onerous, bothin its amount, and in the time, place and manner of its performance, that of the principal debtor; it may be for a less amount,or the time may be more protracted

A surety is one who promises to pay or perform an obligation owed by the principal debtor, and, strictly speaking, the surety is primarily liable on the debt: the creditor can demand payment from the surety when the debt is due. The creditor is the person to whom the principal debtor (and the surety, strictly speakig) owes an obligation

Licensing

Licensing is the process of leasing a legally protected (trademarked or copyrighted) entity – a name, likeness, logo, trademark, graphic design, slogan, signature, character, etc. The entity, known as the property or intellectual property, is then used in conjunction with a product.

Spheres of the licensing

1)industry;
2) the use of atomic energy;
3) the revolution of poisonous substances;
4) technical safety;
5) transport;
6) the revolution of narcotic drugs, psychotropic substances, precursors;
7) providing Information Security;
8) special technical equipment for taking of operational- search measures;
9) the revolution of armament, military equipment and separate types of weapon, of explosives and articles with their application;
10) public health;

Licensing

Legal position of the LLP

Legal capacity

The capacity to have civil rights and bear obligations shall be recognized for all citizens (Part 1 of Article 13 of the RK Civil Code)

Legal capacity of a citizen shall arise at the moment of his birth and cease with his death (Part 2 of Article 13 of the RK Civil Code)

Principal contents of legal capacity of a citizen (Article 14 of the RK Civil Code)

Ø Capacity to have a title to property, including foreign currency, both within the boundaries of Kazakhstan and outside its borders;

Ø To inherit and to legate property;

Ø To move freely within Kazakhstan and to select the place of residence;

Ø To freely leave Kazakhstan and to come back;

Ø To engage in any activity which is not prohibited by laws;

Ø To create legal entities independently or with other citizens and legal entities;

Ø To commit any transactions which are not prohibited by laws and participate in obligations;

Ø To have the right to intellectual property on the inventions;

Ø To demand compensation for material and moral harm; and

Ø To have other proprietary and personal rights.

Bargains (transactions)

Bargains (transactions)

Objects of civil rights:

• Property

• Non-property values

Property:

• Things

• Money

• Securities

• Works

• Services

• Material result of intellectual activity

• Trademarks

• etc.

Non-property values

• Life

• Health

• Dignity

• Honor

• Good name

• Business reputation

• Inviolability of private life

• Right for the name

• etc.

Things

• Movable and immovable

• Dividable and undividable

• Compound and simple

• Main thing and accessories

• Consumable and inconsumable

• Fruits and profit

• Animals

Bargains:

Bargains are the actions of the citizens and legal entities which are aimed on establishing, changing or cancelling of civil rights and obligations

Types of bargains

• Unilateral

• Bilateral

• Multilateral

Grounds of invalidity

• Form

• Content

• Parties

Defect of form

• Without license

• Written form

• Notary form

Defect of content

• Unfair competition

• Bad faith agreement between the two parties

• Committed by a legal entity and contradicts with its aims.

Defect of party

– Committed by a person under 14

– Committed by a person of 14-18 without parent’s consent

– Committed by deeds incapable person with the mental disease

– Committed by capable, but who could not realize what he does

– Delusion

– Fraud, violence, threat

The Obligation

Obligation = duty to commit a certain a action + right to demand the commitment of that action + responsibility for the consequences.

If due to an obligation one person (the debtor) is obliged to commit for the benefit of another person (the creditor) certain actions, e.g. to transfer property, perform work, pay money etc., or abstain from certain actions, then the creditor has the right to claim from the debtor the execution of his obligation.

Obligations may emerge from:

Ø Contracts;

Ø Unilateral Transaction (public promise of the reward);

Ø Infliction of damage;

Ø Other acts of citizens and legal entities (groundless acquisition, acts without authority);

Forms of Liability

Compensation of Losses

Ø Real Damage

Ø Lost Profit

• Forfeit (Penalty)

• Confiscation of an Item

• Loss of an Advance Payment

Does not include the right to determine the legal destiny of the property which the company had received on the basis of the balance-sheet. (art. 206 CC)

State enterprises

state-owned enterprise (SOE) is a legal entity that undertakes commercial activities on behalf of the state, its owner. The legal status of SOEs varies from being a part of the government to being stock companies with the state as a regular stockholder. The defining characteristics of SOEs are that they have a distinct legal form and are established to operate in commercial affairs and commercial activities. While they may also have public policy objectives (e.g., a state railway company may aim to make transportation more accessible), SOEs should be differentiated from other forms of government agencies or state entities established to pursue purely nonfinancial objectives.^[1]

Government-owned corporations are common with natural monopolies and infrastructure, such as railways and telecommunications, strategic goods and services (mail, weapons), natural resources and energy, politically sensitive business, broadcasting, demerit goods (e.g. alcoholic beverages), and merit goods (healthcare). SOEs are also called state-owned company, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, crown corporation, government-owned corporation, government-sponsored enterprises, commercial government agency, public sector undertaking, or parastatal.

Глава 1. Общие положения

Charter capital

LLP is a corporate entity established by one or several individuals or legal entities, whether foreign or local, vested with its separate property, rights and liability.

Participants of LLP are not liable for its obligations and bear the risk of losses associated with the activities of the partnership only to the extent of the amount of their contributions into the LLP's charter capital, except in certain cases.

LLP's charter capital is formed by combining contributions from founders/participants of the LLP

The LLP Law does not set specific requirements as to what management bodies should be established in LLPs apart from requiring LLPs to have (i) the general meeting of participants (or a sole participant) as a supreme body; and (ii) an executive body. The LLP Law allows LLPs to form a supervisory body and/or an audit commission.

LLPis a commercial organization, whose objective is to carry out activities aimed at generation of profit and conducting any types of activities not contrary to the Kazakhstan legislation

Property right

The right to possess

The right to use

The right to dispose (art.188 CC)

Organization

-social units (or human groupings) deliberately constructed and reconstructed to seek specific goals.

-collectivities that have been established for the pursuit of relatively specific objectives on a more or less continuous basis.

Non-profit organizations

• Consumer cooperative (union, society)

• Funds

• Public and religious organizations (associations)

• Establishments

• Associations of legal entities (associations and unions)

Коммерческие организации:

• хозяйственные товарищества и общества

• хозяйственные товарищества

• полное товарищество

• товарищество на вере

• акционерное общество

открытое АО

закрытое АО

• общество с ограниченной ответственностью

• общество с дополнительной ответственностью

• Производственный кооператив (артель)

• Государственные и муниципальные предприятия

На праве хозяйственного ведения

На праве оперативного управления

Некоммерческие организации

• Потребительский кооператив (союз, общество)

• Фонды

• Общественные и религиозные организации (объединения)

• Учреждения

• Объединения юридических лиц (ассоциации и союзы)

Organization as a system has the following characteristics:

(a). There are a number of elements;

(b). The elements of a system are interrelated among themselves in an orderly or ordered manner.

(c). A system may be related to some other systems or be a part of some larger systems

Branches and subsidiaries

A branch office is a considered an extension of the parent company and is not considered a separate legal entity. Hence, its liabilities extend to the parent company, meaning the parent company can be sued in Singapore.

A local subsidiary is a separate legal entity from the foreign company even if the latter may be its only shareholder and will maintain control over its board of directors. This means that the foreign company does not have to bear the losses and liabilities of the local subsidiary.

The branch office must also submit its own accounts, as well as the parent company’s accounts, must be filed annually. Some parent companies choose the subsidiary company option to avoid this.

Activities conducted by the branch office must be similar to that of the parent company as it is merely an extension, while the subsidiary company is allowed to undertake activities which is different from the parent company.

In summary, a branch office is preferred by multinational corporations (MNCs), banks and insurance companies that want to use the brand name and finances of the parent company to secure licences and business contracts, while a subsidiary company is favoured by many foreign companies when establishing a presence in Singapore because subsidiaries enjoy local tax treatment and a separate legal identity.

Both options serve as credible options for foreign firms which want to expand operations in Singapore, or use the island state as a springboard into the Asia Pacific region and tap into the ample opportunities which are present there.

KASE

KASE was founded November 17, 1993 under the name ‘kazakh interbank currency exchange two days after the introduction of the national currency of Kazakhstan – Tenge. Now on this day is observed annually as a professional holiday “Day of national currency.” Technology kase: kase uses its own trading platform: electronic trading system “server-client”, remote access, electronic signature and electronic document, cryptographic protection of data

Validity of contract

Constituent documents

in relation to juristic persons, the constitutional documents (sometimes referred to as the charter documents) of the entity are the documents which define the existence of the entity and regulate the structure and control of the entity and its members. The precise form of the constitutional documents depends upon the type of entity. A legal entity carries out its activities on the basis of the charter or foundation agreement and the charter. The foundation agreement of the legal entity is concluded, and the charter is approved by its founders.

JSC

BOD

LLP

LLP is a corporate entity established by one or several individuals or legal entities, whether foreign or local, vested with its separate property, rights and liability.

Its partners bear the risk of losses associated with the activities of the partnership within the limits of the contributions made by themselves. LLP's charter capital is formed by combining contributions from founders/participants of the LLP. LLP is a commercial organization, whose objective is to carry out activities aimed at generation of profit and conducting any types of activities not contrary to the Kazakhstan legislation

Company’s secretary

An employee of a joint-stock company who is not a member of the board of directors or an executive body of the company,

The board of directors of the company is appointed and is accountable to the board of directors of the company,

Controls the preparation and conduct of meetings of the meeting:

(I) by the shareholder and

(Ii) of the Board of Directors of the company,

Provides information on the agenda issues:

(I) shareholder meetings

(Ii) materials for the meeting of the Board of Directors of the company

Controls the access to them.

Legal and deed capacity

Legal capacity – the capacity to have civil rights and bear obligations.

Deed capacity - the capacity of a citizen by his deeds to acquire and exercise the civil rights, create for himself civil obligations and fulfill them.

Legal capacity of a citizen shall arise at the moment of his birth and cease with his death (Part 2 of Article 13 of the RK Civil Code)

The capacity of a citizen by his deeds to acquire and to exercise civil rights, to create for himself civil obligations and to fulfil them shall arise in their entire volume when the citizen reaches the age of majority, that is, upon reaching of 18 years of age.

In the case where legislative acts permit to marry prior to reaching 18 years of age, a citizen who has not reached 18 years of age shall acquire deed capacity in its entire volume from the moment of entering into marriage.

All citizens shall have equal deed capacity, unless otherwise provided for by laws.

Structure of JSC

• JSC is a public company, legal entity which issues shares to raise funds for carrying out its activities.

• JSC is liable for its obligations to the extent of the value of its property.

• JSC's capital charter consists of its founders' payments for shares at their par value and payments from investors for JSC's shares placed at a securities market.

Right of property

• The right to possess

• The right to use

• The right to dispose (art.188 CC)

Waranty

In contract law, a warranty has various meanings but generally means a guarantee or promis, which provides assurance by one party to the other party that specific facts or conditions are true or will happen. This factual guarantee may be enforced regardless of materiality, which allows for a legal remedy if that promise is not true or followed.

Although a warranty is in its simplest form an element of a contract, some warranties run with a product so that a manufacturer makes the warranty to a consumer with which the manufacturer has no direct contractual relationship.

A warranty may be express or implied, depending on whether the warranty is explicitly provided and the jurisdiction. Warranties may also state that a particular fact is true at one point in time or that the fact will be continue into the future.

Shares

a) Common Share

It gives an ownership right to the holders of the stock and hence the shareholders are entitled to the earnings of the company according to their stake. Holders also get dividends on those stocks as and when given by the company. Liquidity of common stocks are very high and can be bought and sold at any time of the market hours.

b) Preferred Share
These stocks also give ownership right to its holders. Its holders enjoy the privilege of receiving dividends from the company in preference to any other common shareholders. Preferred stocks have less liquidity than the common stocks.

Shares

a) Common Share

It gives an ownership right to the holders of the stock and hence the shareholders are entitled to the earnings of the company according to their stake. Holders also get dividends on those stocks as and when given by the company. Liquidity of common stocks are very high and can be bought and sold at any time of the market hours.

b) Preferred Share
These stocks also give ownership right to its holders. Its holders enjoy the privilege of receiving dividends from the company in preference to any other common shareholders. Preferred stocks have less liquidity than the common stocks.

Types of contracts

A contract is a verbal or written agreement to do work in exchange for some benefit, usually a payment. The agreement is able to be enforced in the courts.

A written contract helps to minimise risks as it is much safer to have something in writing than to rely on someone's word. A written contract will give you more certainty and minimise your business risks by making the agreement clear from the outset. Verbal contracts can lead to uncertainty about each party's rights and obligations. A dispute may arise if you have nothing in writing explaining what you both agreed to do.

Charter capital

The Charter Capital is formed from the par value of the shares of the Company acquired by the shareholders.

Bankruptcy

Bankruptcy is an insolvency of the debtor, recognized by the court, which results in its liquidation.

Insolvency is an incapacity of the debtor – individual private entrepreneur or legal entity – to meet the claims of the creditors. A company can be recognized as a bankrupt: 1) By a free-will decision▻ special application of the owner of the company to the court; 2) Compulsory(by the court’s decision) ◅ by the claim of the creditor/-s or the third parties at the court

Property

Property is an object of civil right, which includes:

Things, Money, Securities, Works, Services, Material result of intellectual activity, Trademarks etc.

Things may be: Movable and immovable, Dividable and undividable, Compound and simple, Main thing and accessories, Consumable and inconsumable, Fruits and profit, Animals.

Shares

a) Common Share

It gives an ownership right to the holders of the stock and hence the shareholders are entitled to the earnings of the company according to their stake. Holders also get dividends on those stocks as and when given by the company. Liquidity of common stocks are very high and can be bought and sold at any time of the market hours.

b) Preferred Share
These stocks also give ownership right to its holders. Its holders enjoy the privilege of receiving dividends from the company in preference to any other common shareholders. Preferred stocks have less liquidity than the common stocks.

Formal Organizations

Characteristics of the formal organizations

- conscious deliberate human efforts to establish and operate them for the accomplishment of pre-determined goals.

- the structured relations among its members.

- their members are selected on the basis of their individual qualifications.

- money and other material resources to be used by the organization are determined with

reference to its goals.

Board of Directors

Interests & goals

n vs. shareholder interests

n vs. management

Banking crisis in KZ, whose fault it was?

n management

n shareholders

n board

. State enterprises

Order of creation, regulation and the termination of activity of the enterprises of the RK National Bank is defined by the present Law, in the view of the features established by normative legal

acts of the RK National Bank.(art 1.5)

Pledge

Pledge

Pledge is recognized as a method of securing the fulfillment of obligations, by which

– a creditor (pledge holder) has the right, in the case of failure by the debtor to fulfill the obligation secured with the pledge,

– to receive the satisfaction from the value of the pledged assets, in a priority procedure before the other creditors of the person to whom that property belongs (pledgor).

Types of Pledge

Mortgage is a type of pledge under which the pledged property remains in the possession and use of the pledgor or a third person.

Pawning is a type of pledge whereby the pledged property is transferred by the pledgor into the possession of the pledge holder.

3. Independent directors of JSC

Article 54. Composition of the Board of Directors

1. Only an individual can be a member of the board of directors.

2. Members of the executive body, except for its head, can not be elected to the board of directors. The head of the executive body can not be elected chairman of the board of directors.

3. The number of members of the board of directors must be at least three people. At least one-third of the number of members of the board of directors of the company should be independent directors.

Conditions of validity

Conditions of validity:

• The agreement must comply with any formal legal requirements

• All the significant conditions of the transaction must be mentioned

• There must be a clear expression of the intention of the parties to create the legal relations

• Parties must have capacity to contract

• The agreement must be legal

LLP

LLP is a corporate entity established by one or several individuals or legal entities, whether foreign or local, vested with its separate property, rights and liability.

- Participants of LLP are not liable for its obligations and bear the risk of losses associated with the activities of the partnership only to the extent of the amount of their contributions into the LLP's charter capital, except in certain cases.

- LLP's charter capital is formed by combining contributions from founders/participants of the LLP

- The LLP Law does not set specific requirements as to what management bodies should be established in LLPs apart from requiring LLPs to have (i) the general meeting of participants (or a sole participant) as a supreme body; and (ii) an executive body. The LLP Law allows LLPs to form a supervisory body and/or an audit commission.

- LLP is a commercial organization, whose objective is to carry out activities aimed at generation of profit and conducting any types of activities not contrary to the Kazakhstan legislation

Obligations

Obligation = duty to commit a certain a action + right to demand the commitment of that action + responsibility for the consequences.

If due to an obligation one person (the debtor) is obliged to commit for the benefit of another person (the creditor) certain actions, e.g. to transfer property, perform work, pay money etc., or abstain from certain actions, then the creditor has the right to claim from the debtor the execution of his obligation.

Obligations may emerge from:

Contracts;

Unilateral Transaction (public promise of the reward);

Infliction of damage;

Other acts of citizens and legal entities (groundless acquisition, acts without

authority);

Joint-stock company (art 4)

1. The joint-stock company, which corresponds to the following criteria, acknowledges by public company:
1) joint-stock company must accomplish an arrangement of its simple actions on the disorganized and (or) organized markets for securities, after proposing data of action to the unlimited circle of investors;
2) not less than thirty percent of the total number of placed simple actions of Joint-stock must belong to the shareholders, each of whom manages not more than five percent of the simple actions of join-stock company from the total number of placed simple actions of joint-stock company;

3) the volume of tradings by the simple actions of joint-stock company must correspond to the requirements, established by the normative legal report of the authorized organ;
4) the actions of joint-stock company must be located in the category of the list of the Stock Market, which functions in the territory of the Republic Kazakhstan, or they are included in the list of the special commercial area of the Regional Financial Center of Almaty

. Notion of the entrepreneurial law

Subjects of civil rights: legal entities

Legal entity shall mean an organization which:

- Has on the basis of ownership right, right of business authority or right of operational management its separate assets;

- Is liable for its obligations by its assets;

- May in its name acquire and exercise proprietary and personal non-proprietary rights and obligations;

- Can be the plaintiff and the defendant in the court;

- Has independent balance-sheet or budget;

- Has stamp with its name thereon.

Types of legal entities:

Ø Commercial legal entity shall mean an organization which pursues an extraction of profits as main purpose of its activity;

Ø Non-commercial legal entity shall mean an organization which does not extract profits as such a goal and does not allocate gained profits between its participants.

Forms of legal entities:

ü Commercial legal entity can be organized in the form of (1) state enterprise, (2) business partnership, (3) joint stock company, or (4) production cooperative;

ü Non-commercial legal entity can be organized in the form of (1) establishment (учреждение), (2) social association (общественное объединение), (3) joint stock company, (4) consumers` cooperative, (5) social fund, (6) religious association, or (7) any other form stipulated by laws.

Non-profit organizations

• Consumer cooperative (union, society)

• Funds

• Public and religious organizations (associations)

• Establishments

• Associations of legal entities (associations and unions)

4. Legal position of Commandit partnership

A partnership is similar to a proprietorship except that there are two or more owners (partners). In a general partnership, all the partners share in gains or losses, and all have unlimited liability for all partnership debts, not just some particular share. The way partnership gains (and losses) are divided is described in the partnership agreement. This agreement can be an informal oral agreement, such as “let's start a lawn mowing business,” or a lengthy, formal written document.

Commanditarian Partnership:the partner commandite is purely a financial participant with a restricted liability-similar to a shareholder in a company. He shares in the profits and losses, but his liability is restricted to his specific contribution or an agreed amount

BOD

Board of directors

· Executive directors

· Non-executive directors

· Independent non-executive directorsю. All stakeholders should be represented there.

Board of Directors

Interests & goals

n vs. shareholder interests

n vs. management

Banking crisis in KZ, whose fault it was?

n management

n shareholders

n board

TYPES OF CONTRACTS

1. Types of contracts

Contracts-. is an agreement between the parties on establishing, changing or cancelling of civil rights and obligations

Validity of contract from the moment of signing/ registration in state register

till: time provided for by the legislation time provided for in the contract complete fulfillment of obligations Form of contract Oral /Written

Types of contractual obligations

• Sale of goods

• Barter

• Leasing

• Transportation

• Loan

• Insurance

• Contract of services

Sale of goods a contract by which the seller must hand over the goods to the buyer’s ownership, business authority or operational administration and the buyer must pay the price in exchange for the goods.

(Chapter 25 CC) Form of the contract of sale of goods

• Legal entities – written form

• Real estate – written form + registration

• Natural persons – movable property – any form

LEGAL ENTITY

It is an organization which:

• has its separate property on the basis of property right, right of business authority or right of operational management;

• is liable for its obligations with this property;

• can in its own name acquire and exercise property and personal non-property rights and obligations;

• can be a plaintiff and a defendant in the court;

• has independent balance-sheet or budget.

Types of legal entities:

Commercial organization

Aimed on the receiving of profit

The income is distributed between the participants Types of commercial organizations state enterprise

business partners joint stock Non-commercial organization

Does not have the receiving of profit as the main aim

The income is not distributed between the participants

Types of non-commercial organizations:

Institution

Public foundation

Non-commercial joint-stock company

Religious association

Consumer cooperative society

Social fund

Legal entities can create associations.

n Legal entity shall act on the basis of the RK Civil Code, Law on each of the forms of legal entities, and other laws and foundation documents.

n Each legal entity shall have legal capacity, i.e. a capacity to have civil rights and obligations in connection with its activities.

n Legal capacity of legal entity shall arise at the moment of its creation and shall cease at the moment of completion of its liquidation.

n Legal capacity of legal entity engaged in such activity which requires to obtain a license shall arise at the moment of obtaining the licenses and shall cease at the moment of its removal, expiry or recognition as invalid.

Liability of legal entity

• Founder (participant) of legal entity or owner of its property shall not be liable for obligations of legal entity, and legal entity shall not be liable for obligations of its founder except for cases provided for by laws or foundation documents of legal entity.

• If bankruptcy of legal entity was caused by actions of its founder, then in case of insufficiency of funds of legal entity, the founder shall bear subsidiary liability before the creditors.

• Legal entity shall be liable before the third parties for obligations of legal entity's body which exceeded its powers set forth in foundation documents except for cases provided for by Item 11 of Article 159 of the RK Civil Code.

• Item 11 of Article 159 of the RK Civil Code.

NOTION OF SHAREHOLDING COMPANY

Shareholders are individuals, companies, or trusts, that own shares of a for-profit corporation. The individuals own a specific number of shares, which they each purchased at a specific price.The stockholders have invested their money to purchase these shares and they gain in two ways

• Through dividends paid based on the number of shares owned by the shareholder, and due to the corporation's profits, and
• By selling their shares at a profit.

Shareholder Rights

Shareholders have a right to inspect the company's books and records or sue the corporation for misdeeds of the directors and officers, for example. Common shareholders are also entitled to vote on major corporate matters, such as who sits on the board of directors and whether a proposed merger should go through. Shareholders also have the right to attend the corporation's annual meeting to learn about the company's performance, or listen to the meeting via conference call.