Charter Capital of a Limited Liability Partnership (LLP)

📘 I. General Characteristics of LLP Charter Capital

The charter capital of an LLP is:

• the property base of the partnership;
• a guarantee of liability to creditors;
• a basis for the distribution of participants’ shares;
• a mandatory condition for the state registration of a legal entity.

🔍 It is formed from the contributions of participants and reflects their property participation and degree of influence on the management of the partnership (proportional to their share).

📑 II. Commentary on Legal Provisions

🔹 1. General Procedure for Determining Charter Capital

"The size of the charter capital is determined by the founders and may not be less than the minimum amount..."

🔍 Commentary:

• The founders of the LLP independently determine the size of the charter capital;
• The law sets a minimum threshold, which:
  • serves as an indicator of the company’s solvency;
  • limits registration access for minimally viable entities;
  • is especially relevant for financial and high-risk organizations.

📘 Reference to "minimum amount":

• For standard LLPs — regulated by the Law on LLPs and ALPs, and by by-laws of the Ministry of Justice and the Ministry of National Economy;
• As a rule, it is 100 MCI (monthly calculation index) — subject to confirmation by the current government resolution.

📎 Related Norm:

• Article 11 of the Law of the Republic of Kazakhstan "On Limited and Additional Liability Partnerships";
• Government resolutions on setting the minimum charter capital.

🔹 2. Special Sectoral Requirements

The law provides important exceptions, setting that the minimum charter capital for certain types of activities is regulated by sectoral laws:

🏦 Microfinance Organizations (MFOs)

"Defined by the legislation on microfinance activities"

📘 Law of the Republic of Kazakhstan "On Microfinance Activities":

• Article 6 — sets charter capital requirements:
  • for urban MFOs — from 100 million KZT;
  • for rural MFOs — may be lower, but determined by the rules of the Agency of the Republic of Kazakhstan for Regulation of the Financial Market.

💳 Payment Organizations

"Defined by the legislation on payments and payment systems"

📘 Law of the Republic of Kazakhstan "On Payments and Payment Systems":

• Article 14 — minimum charter capital for registration is 20 million KZT;
• may be higher for organizations issuing electronic money or operating systemically important payment systems.

📞 Debt Collection Agencies

"Defined by the legislation on collection activities"

📘 Law of the Republic of Kazakhstan "On Collection Activity":

• Article 10 stipulates:
  • minimum charter capital — 30 million KZT;
  • must be fully paid before commencement of activity.

⚖️ III. Judicial and Administrative Practice

📌 Example 1. The registration authority refused to register LLP "FinGarant", stating that its charter capital of 2 million KZT does not meet MFO requirements. The court upheld the refusal, ruling that sectoral legislation prevails over the general norms of the Civil Code (Case No. 2-3921/2021).

📌 Example 2. In a license revocation case against a debt collection agency, it was revealed that the company artificially maintained its charter capital without having the actual asset on its balance sheet. The Agency for Regulation and Development of the Financial Market revoked the license based on Article 10 of the Law on Collection Activity.

🌐 IV. International Comparison

🔍 Kazakhstan applies a mixed approach:

• for general business — the minimum may be symbolic (from 100 MCI);
• for licensed sectors — strictly regulated.

📚 V. Related Laws and Norms

📝 VI. Conclusions and Recommendations

1. The charter capital of an LLP must be:
   • not lower than the minimum established by law;
   • fully contributed before registration (in special cases — within 1 year);
2. For companies in the financial, collection, or payment sectors, specific industry requirements must be strictly followed;
3. When registering an LLP, it is essential to:
   • verify the latest regulations and provisions issued by the financial market regulator;
   • ensure the capital is actually contributed (not nominal), to avoid risks of registration or license revocation.

📌 If you need assistance with:

• verifying your company’s charter capital compliance;
• preparing documents for capital increase;
• drafting a legally sound internal agreement on share distribution — I can assist with accurate calculations and properly formatted legal templates.

Attention!   

       Law and Law Law Law draws your attention to the fact that this document is basic and does not always meet the requirements of a particular situation. Our lawyers are ready to assist you in legal advice, drawing up any legal document suitable for your situation.  

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