Introduction to Legal Aspects of Corporate

Terms
Corporation – акционерное общество
Partnership - товарищество
Legal entities - юр. лица
Physical entities - физ. лица
Securities - ценные бумаги
Shares – акции
Equity – акционерный капитал
IPO (Initial Public Offering) - первичное размещение акций

Plan
Corporations vs. other organizations
Governance of the corporation
General Meeting of Shareholders
Board of directors
Executive body

Home assignment
KZ Statute on Corporations, dated May 13, 2003 / Закон Республики Казахстан от 13 мая 2003 года № 415-II «Об акционерных обществах»
KZ Statute on Securities Market, dated July 2, 2003 / Закон Республики Казахстан от 2 июля 2003 года № 461-II «О рынке ценных бумаг»
articles 12-33 (physical entities), KZ Civil Code, General part
art. 34-111 (legal entities), KZ Civil Code, General part

I. Corporation
Legal entities
Corporations
Partnerships
Industrial Cooperative
State Enterprises
No-profit organizations
articles 34-111, KZ Civil Code
Physical entities
KZ citizens
Foreign citizens
People without citizenship
art. 12-33, KZ Civil Code

I. Corporation
Corporation is a legal entity which issues shares (equity) to raise funds for its operations.
art. 85, Civil Code
Art.3, Statute on Corporations

2. Governance of the Corporation
1. General meeting of shareholders
supreme body
in a company whose 100% shares are owned by one shareholder, the said shareholder
2. Board of directors
governance body
3. Executive body
management body
collective body or a person solely carrying out functions of executive body
name of the executive body shall be determined in the company charter
*Art. 33, Statute on Corporations

2. Governance of the Corporation
*Art. 33, Statute on Corporations

2. Governance of the Corporation
What is the difference between:
managing director;
general director;
member of the management board;
director;
vice president;
president, etc?

2. Governance of the Corporation
Let’s take examples:
KTZh
There are vice presidents, managing directors
What are differences?
Do titles matter?
What position represents executive body?
art. 9:
http://www.railways.kz/index.php?option=com_content&task=view&id=163&Itemid=280

2. Governance of the Corporation
Let’s take examples:
Samruk Kazyna
There are management board (правление), chairman of management board, managing directors?
What are differences?
Do titles matter?
What position represents executive body?
Art. 10
http://www.samruk-kazyna.kz/page.php?page_id=2552&lang=1

Western doctrine (US & UK)
Directors – members of the board of directors
Executives – members of the executive board (члены исполнительного органа)
Officers (должностные лица), managers
CEO (Chief Executive Officer)
CFO (Chief Financial Officer)
http://www.kmgep.kz/rus/the_company/corporate_governance/company_management/
http://www.kmgep.kz/eng/the_company/corporate_governance/company_management/

Kazakhstan doctrine
*Officers include directors. Art. 1, par. 16, Statute on Corporations

Western doctrine (US & UK)
*Officers do not include directors.

3. General Meeting of Shareholders

3. General Meeting of Shareholders
Minority Shareholders
a shareholder holding less than 10 percent of voting shares in the corporation
Majority Shareholders
a shareholder (or shareholders acting on the basis of an agreement made between them) who owns (or who own in aggregate) 10 per cent or more of the voting shares in the corporation
Controlling shareholder
a shareholder who has the right to determine decisions made by the corporation
*Art. 1, Statute on Corporations

3. General Meeting of Shareholders
*Art. 1, Statute on Corporations

4. Executive Body

4. Executive Body
Interests & goals vs. shareholder interests
*Art. 1, Statute on Corporations

5. Board of directors

5. Board of directors
Executive directors
Non-executive directors
Independent non-executive directors
All stakeholders should be represented there.
*Art. 1, Statute on Corporations

5. Board of Directors
*Art. 1, Statute on Corporations