2. For profit companies

Terms
State enterprise – государственное предприятие
Business Partnerships – Хозяйственные товарищества
General Partnership – Полное товарищество
Limited Partnership – Командитное товарищество
Limited Liability Partnership (LLP) – ТОО
Corporation = Joint Stock Company – АО
General Partner – Полный товарищ
Limited partner – Вкладчик
Partner – участник
Interest - доля

Plan (Peculiarities of organizational forms)
Governance
Liabilities of Owners for the debts of the Companies
Voting

2. Legal Entity = Union
Legal Entity = Union of
People = Partnerships
Capital = Corporation
Work = Cooperative

Remark

1. Governance (управлениe)

Example
Alexey met his friends Maxim & Tanya.
During the lunch, they persuaded him
to join their law firm Tanya & Partners.
Alexei joined the firm Tanya & Partners
in October 24, 2008 by buying 20% of
the stake for KZT 20 mln from Tanya.
Alex: 20%
Max: 29%
Tanya: 51%
Alex
Max
Tanya

Example
Alex: 20%
Max: 29%
Tanya: 51%
Tanya was elected as a managing
partner, and she would like to make a
contract with corporation Samuk on a
multi-billion consulting project.
Can Tanya sign contracts
on behalf of the firm?
Alex
Max
Tanya

A. General Partnership
Alex: 20%
Max: 29%
Tanya: 51%, managing partner
Can Tanya sign contracts
on behalf of the firm?
No, she cannot.
Yes, provided she is a general partner
Yes, provided she represents executive body
No, she needs to be president
Alex
Max
Tanya

B. Limited Partnership
Alex: 20%
Max: 29%
Tanya: 51%, managing partner
Can Tanya sign contracts
on behalf of the firm?
No, she cannot.
Yes, provided she is a general partner
Yes, provided she represents executive body
No, she needs to be president
Alex
Max
Tanya

С. Limited Liability Partnership
Alex: 20%
Max: 29%
Tanya: 51%, managing partner
Can Tanya sign contracts
on behalf of the firm?
No, she cannot.
Yes, provided she is a general partner
Yes, provided she represents executive body
No, she needs to be president
Alex
Max
Tanya

D. Additional Liability Partnership
Alex: 20%
Max: 29%
Tanya: 51%, managing partner
Can Tanya sign contracts
on behalf of the firm?
No, she cannot.
Yes, provided she is a general partner
Yes, provided she represents executive body
No, she needs to be president
Alex
Max
Tanya

E. Corporation
Alex: 20%
Max: 29%
Tanya: 51%, managing partner
Can Tanya sign contracts
on behalf of the firm?
No, she cannot.
Yes, provided she is a general partner
Yes, provided she represents executive body
No, she needs to be president
Alex
Max
Tanya

1. Governance
What is Obligatory Governance
Structure in:
General Partnership?
Limited Partnership?
Limited Liability Partnership?
Partnership with Add. Liability?
Corporation?
Please find yourselves in:
Civil Code;
Statute on Business Partnerships;
Statute on LLP;
Statute on Corporations.
Alex
Max
Tanya

2. Liability of Owners for the debts of their Companies

Example
Alexey met his friends Maxim & Tanya.
During the lunch, they persuaded him
to join their law firm Tanya & Partners.
Alexei joined the firm Tanya & Partners
in October 24, 2008 by buying 20% of
the stake for KZT 20 mln from Tanya*.
In November 14, 2008, the firm filed
bankruptcy proceedings. Alexey and
his other partners Maxim and Tanya
are facing hundreds of creditors.
Outstanding debt** is KZT 250 mln.
Alex
Max
Tanya
*Alex is not a new partner, he bought his stake from Tanya
**невыплаченные (чистый) долг

Example
Tanya, who actually led the firm to
bankruptcy, ran away to Greek Cyprus
with which KZ has no extradition treaty.
Maxim stayed in KZ and in fact he has
lots of property around KZ worth of
KZT 150 mln.
However, as most of business of Alexey
is in Almaty, creditors have sued Alexey
for all outstanding debt. Alexey has assets
worth of KZT 100 mln.
Alex
Max
Tanya

Example
Alex: 20% stake & 100 mln. of personal
assets.
Max: 150 mln. of personal assets
How much Alexei
owes?
Nothing
50 mln., that is 20% of 250 mln debt.
250 mln.
100 mln, that is 250 mln minus Maxim’s assets (150)
Alex
Max
Tanya

A. General Partnership
Alex: 20% stake & 100 mln. of personal
assets.
Max: 150 mln. of personal assets
How much Alexei
owes?
Nothing
50 mln., that is 20% of 250 mln debt.
250 mln.
100 mln, that is 250 mln minus Maxim’s assets (150)
Alex
Max
Tanya

B. Limited Partnership (Коммандит.)
Alex & Tanya: general partners
Max: limited partner
How much Alexei
owes?
Nothing
50 mln., that is 20% of 250 mln debt.
250 mln.
100 mln, that is 250 mln minus Maxim’s assets (150)
Alex
Max
Tanya

B. Limited Partnership (Коммандит.)
Alex & Tanya: general partners
Max: limited partner
How much Maxim
owes?
Nothing
50 mln., that is 20% of 250 mln debt.
250 mln.
100 mln, that is 250 mln minus Maxim’s assets (150)
Alex
Max
Tanya

C. Limited Liability Partnership
Alex: 20% stake & 100 mln. of personal
assets.
Max: 150 mln. of personal assets
How much Alexei
owes?
Nothing
50 mln., that is 20% of 250 mln debt.
250 mln.
100 mln, that is 250 mln minus Maxim’s assets (150)
Alex
Max
Tanya

D. Additional Liability Partnership
Alex: 20% stake & 100 mln. of personal
assets.
Max: 150 mln. of personal assets
How much Alexei
owes?
Nothing
50 mln., that is 20% of 250 mln debt.
250 mln.
100 mln, that is 250 mln minus Maxim’s assets (150)
Alex
Max
Tanya

E. Corporation
Alex: 20% stake & 100 mln. of personal
assets.
Max: 150 mln. of personal assets
How much Alexei
owes?
Nothing
50 mln., that is 20% of 250 mln debt.
250 mln.
100 mln, that is 250 mln minus Maxim’s assets (150)
Alex
Max
Tanya

3. Voting (голосование)

Example
Alex: 20%
Max: 29%
Tanya: 51%
General Meeting is conducted. Alex, Max &
Tanya would like to elect managing director
(executive body). Let’s assume that it is
not internal issue (внутр. вопрос)
Alex & Max vote for Alex
Tanya, for Tanya.
Who wins?
Alex
Max
Tanya

A. General Partnership
Alex: 20%
Max: 29%
Tanya: 51%
Who wins?
Tanya, as she has 51% of interest.
Max & Alex, as they represent majority of owners
Nobody
Alex
Max
Tanya

B. Limited Partnership
Alex (general partner): 20%
Max (limited partner): 29%
Tanya (general partner): 51%
Who wins?
Tanya, as she has 51% of interest.
Max & Alex, as they represent majority of owners
Nobody
Alex
Max
Tanya

C. Limited Liability Partnership
Alex: 20%
Max: 29%
Tanya: 51%
Who wins?
Tanya, as she has 51% of interest.
Max & Alex, as they represent majority of owners
Nobody
Alex
Max
Tanya

D. Additional Liability Partnership
Alex: 20%
Max: 29%
Tanya: 51%
Who wins?
Tanya, as she has 51% of interest.
Max & Alex, as they represent majority of owners
Nobody
Alex
Max
Tanya