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Category Archives: Corporate and M&A
The system of organization of rendering of state services is permanently improved in Kazakhstan. According to the decision of the Government of the RK, recently was founded a State corporation “Government for Citizens” (hereinafter – the Corporation), which has integrated in itself Republican State Enterprises “Public Service Center”, “Research and development centre of Land Register”, “Center for Real Estate”, Republican state budget-supported enterprise “State Center for Payment of Pensions”. The Corporation thereby became the unified provider, carrying out the activity in the sphere of rendering of state services to natural persons and legal entities by “one stop” principle, registration of pledges of movable property, technical inspection of buildings, constructions, maintenance the state Land register, pension and social security services. Continue reading
13 November 2015 saw the adoption of the Republic of Kazakhstan Law to Amend Certain Legislative Acts of the Republic of Kazakhstan on Rehabilitation and Bankruptcy (hereinafter referred to as the Law). Specifically, the Rehabilitation and Bankruptcy Law received a new chapter, 6-1, Settlement, which enables the debtor and creditors to make a settlement agreement at any stage of bankruptcy proceedings in order to discontinue bankruptcy proceedings. The effective date of the amendments is 2 December 2015. Continue reading
Pursuant to Law of the Republic of Kazakhstan No.333-V of 17 July, 2015 “On amendments and additions into the certain legal acts of the Republic of Kazakhstan pertaining increase of protection of property right, securing performance of contractual obligations and strengthening of liability for violation of them” the Civil Code, Law on registration of mortgage of immovable property and Law on Banks and Banking Activity have been amended. Continue reading
In the course of providing legal services, we have more than once come across the question of whether one can pay for stock of a joint-stock company (hereinafter referred to as JSC) by set-off of liabilities. While the situation with a business partnership is quite clear because art. 59 of ROK Civil Code states in no uncertain terms that: “it is forbidden to make contributions in the form of moral rights and other intangible benefits, or by set-off of members’ receivables from the partnership”, the JSC proved to have no such bright-line rule in place. Specifically, in our practice we came across a situation where payment for JSC stock was made by set-off of an investor’s receivables from the JSC and the legality of such payment was not called in question. Continue reading
As is known, legal entities and individuals are prohibited to attract any funds from individuals as an entrepreneurial activity in the Republic of Kazakhstan, in other words to carry out entrepreneurial activity in form of loans raising from individuals, and any such transactions will be declared void from the time of signature. This prohibition intended originally to protect people from fraud and different pyramid scheme. In this context entrepreneurial activity in form of funds attraction from individuals mean attraction of deposits from people with payment of interests, and this constitute banking activity, which is subject to licensing.
The judicial practice is full of different cases: claimant seeks enforcement of execution of contract by a defender or extension of contract duration for performance etc. Among them, the most interesting are those, when affiliated companies and (or) participants of a company are joined to the litigation as co-defendant. There is a case in our practice, when a court attached property of one limited liability partnership (“LLP”) as it was a participant and accordingly has a participating interest in an LLP, which is joined as defendant to the litigation process. We cannot say that such judgements common and frequent, however, there are such cases in practice. Besides this, by virtue of recent amendments into the Kazakhstani laws aimed at “drastic improvement of conditions of entrepreneurial activity in the Republic of Kazakhstan”, in the very near time one can encounter the problem of liability of participants of an LLP and (or) affiliated persons for damages and losses caused by LLP.
In order to ensure duly protection of rights and basic freedoms and, in particular personal privacy regardless of citizenship and place of living, in view of today’ automatic data processing, the European Council Member States adopted Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data (Strasbourg, 28 January 1981 with Additional Minutes to the Convention on Supervisory Bodies and Cross-Border Data Transmission, Strasbourg, 8 November 2001).
In order to ensure duly protection of rights and freedoms of an individual and citizen during acquisition and processing of personal data the Law on Personal Data and Protection was adopted in Kazakhstan on 21 May 2013, its provision are regulating relationship connected with acquisition, processing and protection of personal data.
Most professionals involved in supporting corporate operations are used to the idea that instruments of incorporation (pre-incorporation contract and/or charter) need to be notarized and registered with the justice department. However, according to the latest legislative amendments in Kazakhstan certain private businesses are no longer required to notarize their constitutive documents and can essentially reduce their notarial expenses, as well as no longer being required to file copies of their constitutive documents with the justice department upon incorporation or reincorporation.
The responsibility of the legal entity and its officials is one of the most important issues of corporate law.
According to Kazakhstan legislation, the officials of the legal entity are the head of the sole executive body, the members of the collegial executive body, the members of the Board of Directors (JSC) and members of the supervisory board (LLP).
Into the activities of such officials, CC of the RK establishes two positions, based on separate personality (Art. 33) and the requirement that the legal entity shall acquire civil rights and assume obligations only through its bodies, which operate in accordance with legislative acts and the foundation documents (Art. 37). This means that the legal entity is responsible to third parties for the actions of their bodies and officials.
According to the general provisions of civil legislation, the persons performing obligations may be changed further to the transaction, or based on the legislative act. Thus, it is assumed that the parties of any contract are entitled to assign a claim (with or without the debtor’s consent) or transfer a debt (with the creditor’s consent).
However, in practice there was a question about the possibility to assign by the supplier of rights and obligations under public procurement contracts to third parties. In public procurement contracts, however, the same as in any other form of agreement, each party acts as both a creditor and a debtor, since each party has certain obligation to the other party. At the same time, public procurement legislation does not provide for direct prohibiting of assignment by the supplier of its rights and obligations under public procurement contracts to third parties. Furthermore, the Model Contract on Public Procurement of goods, works and services used in electronic public procurement provides that the assignment of responsibilities by one party to the contract is allowed with the written consent of the other party only.