Some aspects of the liability of the legal entity and its officials

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.

For the purposes of the contractual obligations of the legal entity allowance applied item 4 Art. 44 CC of the RK, according to which a legal entity shall bear liability before third persons under obligations assumed by a body of the legal entity in excess of its powers established by the foundation documents.

An exception is provided for item 11. Art. 159 CC of the RK, according to which a transaction performed by a legal entity in contradiction to the objects of the activity expressly restricted by this Code, or other legislative acts, or foundation documents, or in violation of the charter authority of its body, may be recognized as invalid pursuant to a court action of the owner of the property of a given legal entity, provided it is proved that the other party to a given transaction knew, or deliberately must have known about such violations.

For the purposes of non-contractual (tort) obligations, in particular arising from harm, there is a norm item 1. Art. CC of the RK on what a legal entity or citizen shall compensate the damage, caused by his (her) employee in the performance of employment (employment, official) duties. This provision is fully applicable in relation to the actions of officials of the legal entity, which resulted in the harm was caused to third parties.

In this case, the legal entity responsible for the actions of its bodies and employees shall have the right of recourse (regression) to their officials in the amount of the consideration paid.

To the effect, no bodies and no officials of the legal entity, while the legal entity itself is liable to third parties for obligations assumed his body in excess of authority.

At the same time, the Law on Enforcement Proceedings and Status of Court Bailiffs (hereinafter – the Law) states that failure by an official (acting official) of the legal entity which is the debtor, within the prescribed period without a valid reason of the requirements contained in the executive document, the bailiff is entitled, and at the request of the creditor is obliged to order the temporary restrictions on leaving Republic of Kazakhstan such an official (Art. 33). Such assizes are authorized by a court bailiff. To the effect, the official shall be personally liable to a temporary ban on the departure from the Republic of Kazakhstan on default obligations of the legal entity-debtor, which is contrary to the provisions of the Civil Code of the Republic of Kazakhstan.

Currently, the practice of such assize against officials of the legal entity accepted bailiffs often and immediately after handling them plaintiffs without checking the absence of valid reasons of default of the requirements contained in the executive document.

In our opinion, in order to eliminate this kind of contradiction is offered in the regulatory decision of the Supreme Court of the Republic of Kazakhstan “On some issues of application of legislation on enforcement proceedings” to register and explain that a bailiff before the ban on leaving the Republic of Kazakhstan for an official of legal entity-debtor must prove the absence of valid reasons of non-fulfillment of the requirements specified in the writ of execution and that the measure should be applied in the least, after the bailiff has taken all other measures prescribed by law for debt collection in the legal person of the debtor (seizure of property foreclosure on receivables and others.), also specify what is meant by the term “legitimate reasons”.

Saida Shukurova

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