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.”

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.

Methods of Securing the Execution of Obligations

The execution of an obligation may be secured with:

1. Forfeit (штраф)

2. Pledge (залог, поручительство)

3. Surety ship (warranty) and Guarantee

4. Advance payment

Forfeit

Forfeit (fine or penalty) is a monetary amount defined by the law or agreement,

– which must be paid by a debtor to the creditor in the case of failure to fulfill, or of improper fulfillment of an obligation,

– in particular, in the case of a delay in the fulfillment.

Upon the claim to pay the damages, the creditor is obliged to prove losses caused to him.

What is Corporate Governance?

Corporate Governance – the way the company is governed

q Structure of governance

governance vs. management

q long term vs. short term

directors vs. officers

q long term vs. short term

Why is it necessary?

The way the company is governed, i.e., structured

Or government body is governed..

If Akim of Almaty is:

n appointed by president, and accountable to president

n appointed by residents of Almaty who are KZ citizens

n appointed by all residents

Why government started to take CG seriously?

n US started to take CG seriously after Enron

n Enron

Enron

Main normative legal acts, which constitute the system of business legislation of the RK - student2.ru

an American energy company based in Houston, Texas.

listed on the NY Stock Exchange

before its bankruptcy in late 2001:

n Enron employed approximately 22,000 (KMG – around 32,000)

n and was one of the world's leading electricity, natural gas, pulp and paper, and communications companies

n revenues of nearly $101 billion in 2000.

q For comparison, consolidated revenue (доход) of KMG is USD 3 bln (KZT 446 bln).

q KZ state budget is USD 20 bln for 2009 (around KZT 3 trl.)

Fortune named Enron “America's Most Innovative Company" for six consecutive years.

n filed for bankruptcy protection in late 2001

n Debts and losses were put into entities formed “offshore” that were not included in the firm's financial statements

n Future profits as real

Securitization (SPV) vs. Enron’s fraud (vice versa

Unlimited partnership (Full partnership)

Legal capacity of legal entity

Begins from the moment of its creation (registration) or from the moment of the obtaining of a license, if the license is required for that activity.

Finishes at the moment of the end of its liquidation or at the moment of expiry of the license, if the license was required for that activity (art. 35 (1,2) CC )

Business partnership:

- It is a commercial organization, the charter fund of which is divided into shares of the founders.

- The property of the business partnership, created on the basis of investments of the founders as well as the property that was produced or acquired by the business partnership during the period of its activity belongs to that business partnership on the basis of property right (art. 58 (1) CC)

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