Comment to article 100. Termination of membership in a production cooperative of the Civil Code of the Republic of Kazakhstan  

The decree on the production cooperative stipulates that a member of the cooperative has the right to withdraw from it at his discretion, notifying the chairman of the board (chairman of the cooperative) in writing at least two weeks before leaving. The founding documents of the cooperative may provide for a longer period of warning, but it should not exceed two months.

The withdrawal of a person from the cooperative allows the possibility of continuing his activity in the cooperative as an employee.  

The question of the form in which a retired cooperative member is compensated for his share (in cash or in kind) is decided by him in agreement with the cooperative, while the retired member does not have the right to demand the return of exactly the property that was the subject of his property contribution (except in cases when the property is provided for use by the cooperative).

In addition to the payment or issue of a share to the retiring member of the cooperative, in accordance with Article 13 of the Decree on the Production cooperative, the part of the profit received by the cooperative in this year due to him for the period of his stay in the cooperative this year is also paid. In addition, the retired member has the right to receive remuneration for personal labor participation in the activities of the cooperative, which is a form of remuneration for his work.

However, if a member of the cooperative is expelled for violating the obligation to participate personally in the activities of the cooperative, the said member of the cooperative does not participate in the distribution of profits earned during the period when he did not work in this cooperative.  

The property transferred by the outgoing member to the use of the cooperative is returned without remuneration, unless otherwise provided by the founding documents of the cooperative.  

As for the other payments referred to in paragraph 1 of the commented article, they are made only if provided for by the charter. Usually, such payments mean all kinds of bonuses, surcharges, social benefits, etc.  

Since the real value of the share (especially if it depends on the degree of labor participation of a cooperative member in its activities), and even more so the net income received by the cooperative can be determined only at the end of the year, the commented article establishes that settlements with the outgoing cooperative member are made at the end of the financial year and the approval of the balance sheet.

However, payments for personal labor participation in the activities of the cooperative, which is a form of salary of a cooperative member, must be made within one month from the date of termination of membership in the cooperative (see art. 13 of the Decree on the Production Cooperative).  

Exclusion from the cooperative on the grounds of non-fulfillment or improper fulfillment by a member of the cooperative of his duties may take place only if these are the duties assigned to him by the charter of the cooperative. Failure to perform any other duties cannot be the basis for exclusion.

At the same time, legislative acts may provide for other grounds for exclusion from cooperative membership. For example, a ban on a person engaging in certain activities, imposed by a court as a measure of criminal punishment, entails, in appropriate cases, exclusion from the cooperative.  

Since membership in a cooperative presupposes personal labor participation in its activities, membership in another similar cooperative and the corresponding labor participation in it is considered undesirable and may lead to exclusion from the cooperative. Termination of membership in a similar cooperative removes this ground.

The right to pay (issue) a share, as well as other payments due, provided for by the charter, does not depend on the grounds on which a member of the cooperative left it: at his own discretion or was excluded.

Exclusion from the cooperative may be made only by resolution of the general meeting. Moreover, the Decree on the production cooperative requires a qualified majority in the form of two thirds of all members of the cooperative (and not those present at the meeting).

The member of the cooperative, in respect of whom the issue of exclusion is being considered, does not participate in the voting.  

No cooperative management body other than the general meeting has the right to exclude members of the cooperative.  

In addition to the grounds provided for by the Civil Code for termination of membership in a cooperative, such as withdrawal from it at one's discretion and exclusion, the Decree on the production cooperative names the following:

1) the death of a cooperative member, declaring him dead, or declaring him missing.;  

2) transfer of a cooperative member's share to another person;  

3) foreclosure by the creditor(s) on the share of a cooperative member.  

Cooperative members who have reached retirement age may retain membership in the cooperative under the conditions stipulated in the cooperative's charter (see art. 11 of the Decree on the Production Cooperative). Thus, membership in a cooperative is possible without personal labor participation in its activities. The cooperative's charter may provide for other similar situations (for example, in the case of conscription of a cooperative member into the army).  

The transfer of a share (part of it) to a citizen who is not a member of the cooperative, carried out with his consent, includes the admission of this citizen to the cooperative. It is impossible to be the owner of a share and not be a member of a cooperative, just as it is impossible to be a member of a cooperative without being the owner of a share.

The consent of the cooperative is expressed in the decision of the general meeting of the cooperative members, because in this case, in fact, we are talking about the admission of a new member to the cooperative, which is far from indifferent to everyone else.  

If the cooperative does not agree to transfer the share to another citizen and at the same time other members of the cooperative do not want to buy out this share, then the cooperative member who does not want to stay in it is given the right to leave the cooperative at his discretion, having received appropriate compensation for his share.  

When transferring a share to another person, the retired member retains the right (and, accordingly, the cooperative has the obligation) to receive a portion of the net income corresponding to his personal labor participation, if such a procedure for distributing net income is provided for by the charter, as well as the right to remuneration for this labor participation.  

The conditions for the transfer of a share to another person (donation, sale, exchange for something, etc.) cannot serve as a basis for refusing to grant consent to this transfer by the cooperative. Equally, the cooperative does not have the right to condition its consent by requiring the transfer to be carried out on terms proposed by the cooperative itself. What is important for a cooperative is not on what terms and at what price the share will be alienated, but who will join the cooperative instead of the retired member and what personal labor participation he will take in his work.  

If the cooperative, by virtue of the powers stipulated in its charter, does not consent to the entry of the heirs of the deceased member into it, then it is obliged to pay this heir a share in the property proportional to the share of the deceased member of the cooperative, as well as a portion of the net income of the cooperative due to the deceased and remuneration for personal labor participation in the activities of the cooperative. The same consequences occur when the heir of a deceased cooperative member refuses to join it.

If a member(s) of a cooperative acquires a share or part of a retired member's share, the acquirer's share in the cooperative's property increases in proportion to the increase in his share.

When a cooperative fulfills or issues a share to a retired member or his heirs, as well as when creditors foreclose on a member's share of his personal debts, the share of the remaining cooperative members increases in proportion to the size of their share set on the day of withdrawal.  

As a general rule, a cooperative is not liable for the obligations of its members. However, if there is a shortage of other assets of a cooperative member to cover personal debts, creditors of such a member may foreclose on his share.

In this case, the cooperative allocates a share in the cooperative's property corresponding to the share of its debtor member. The size of the share is determined according to accounting data as of the date of receipt of the creditor's (creditors') claim.  

The share is allocated in cash or in kind (see Article 12 of the Decree on the Production cooperative).  

It should be noted that the founding documents of a cooperative can only establish the procedure for foreclosing on a share of its debtor member, but they cannot block this appeal by depriving creditors of this right.

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The commentary was prepared within the framework of the scientific and practical research program of the Scientific Research Center of Private Law of the Kazakh State Law University.  

Head of the working group on the preparation of the draft Civil Code of the Republic of Kazakhstan, Corresponding Member of the Academy of Sciences of the Republic of Kazakhstan, Professor Suleimenov M.K.

Deputy head Professor Basin Yu.G.