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
Why is it important to know forms/types of Legal Entities?
Types of Legal Entities
Joint & Several Liability vs. Associate Liability
Business Partnerships vs. Corporation vs. Cooperative

Why is it important?

Example
Let’s assume that National Welfare Fund
“Samruk-Kazyna” contracted with US
company Maple to buy:
100, 000 computers
at 200 UK pounds each set.
Let’s assume that SK failed to pay
20mln. pounds under the contract, and
Maple is suing for damages.
Maple insists that it produced too
many computers, and soon they
would become too outdated.

Example
Let’s assume that SK alleges
that Olga ex-managing director did not
have the right to sign the contract with
Maple’s managing director John.
Therefore, the contract is invalid under
art. 37 of the Civil Code.
Is it right?
Where do we look to find it out?

Steps to answer question:
“Did Olga have the right to sign the contract?”
Look at the Charter: What legal organization
form does it have? => it is JSC
Look at the Civil Code (art. 92): What
Statutory (обязательные) Governance Bodies
does JSC have? => it has (1)General Meeting of
Shareholders, (2) Board of directors, and
(3) Executive Body
Look at the Charter: What position represents
Executive body? => Management Board
Look at the Corporate documents: Is Olga a
member of the Management Board? => No, i.e.,
she did not have the right to sign the contract
under art. 37, Civil Code.

Договор поставки товаров
АО «Фонд Национального Благосостояния
«Самрук-Казына», именуемое в дальнейшем
«Покупатель», с одной стороны, в лице
управляющего директора Ивановой Ольги
Павловны, действующей на основании
Доверенности № 234-21 от 4 января 2010, и
Maple,plc. в лице управляющего директора
Джона Харта, действующего на основании
Устава, именуемая в дальнейшем
«Продавец», с другой стороны, заключили
настоящий договор о нижеследующем:

Договор поставки товаров
Power of attorney (доверенность) (Olga)
vs.
Charter
(John Hart)
WHY IS IT SO?

Example
What does term
“National Fund”
mean?

Example
What type of
legal entity is it?

1. Types of Legal Entities

1. Types of Legal Entities
Is
Samruk Kazyna
a state enterprise?

1. Types of Legal Entities

1. Types of Legal Entities

Important notice
Statutory
Governance Structure
for companies!*
*обязательная структура управления

Example
Managing director of
KazMunaiGas.
Does he have the right
to sign contracts?
art. 37 &_
*обязательная структура управления

2. Joint and several liability vs. Associate Liability

Example
Suretyship vs. Guarantee
Let’s assume that Masha
guaranteed her friend
Irina’s loan of KZT 10 mln.
to TBA bank by:
Guarantee.
Suretyship.
Masha
Irina

Example
Suretyship vs. Guarantee
Irina & Masha have lost
their jobs, and Irina does not have
the money to pay back the loan.
Irina & Masha have only
apartments to secure the debt.
Irina’s apartment – KZT 9 mln; and
Masha – KZT 4 mln.
Masha
Irina

Example
What is Masha’s liability?
Suretyship?
Guarantee?
Masha
Irina

Example
What is Masha’s liability?
Suretyship – 1 mln.
Guarantee – 10 mln.
Masha
Irina

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

3. Business Partnerships vs. Corporation vs. Cooperative

3. Business Partnerships vs. Corporation vs. Cooperative
What types of
Business Partnerships
are you aware of?