Individual entrepreneur without foundation of a legal entity

According to the Art. 19 of the Civil Code of the RK:

1) Registration of individual entrepreneurs (art.19 (2,4))

2) Licensing of the activity (art. 19 (5))

Individual entrepreneur can be any citizen with full active capacity and legal capacity

Right of property

• The right to possess

• The right to use

• The right to dispose (art.188 CC)

The basis of liability in business relationship

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.

Reorganization of legal entity

Reorganization of legal entity (merger, adjoining, division, separation, transformation) shall be carried out pursuant to the decision of an owner of the legal entity or a body authorized by the owner, founders (participants), as well as pursuant to the decision of a body authorized by foundation documents of the legal entity or pursuant to the court decision.

Main normative legal acts, which constitute the system of business legislation of the RK

Law of the RK dated March 31, 1998, “On farming enterprise”;

- Edict of the President of the RK, having a force law, dated May 2, 1995, “On economic partnerships”;

- Law of the RK dated April 22, 1998, “On partnerships with limited and additional liability”;

- Law of the RK dated May 13, 2003, “On joint-stock companies”;

- Law of the RK dated January 21, 1997, “On bankruptcy.”

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

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