Commentary to article 105. Establishment of the Civil Code of the Republic of Kazakhstan  

The institution is a legal entity.

The institution can be formed on the basis of both state and private forms of ownership. When creating a state institution, the territorial scope of the institution's activities (republican, local or regional) must be determined.

The institution can be created for any non-commercial purposes. For example, management, educational, medical, scientific research, cultural, etc. Management goals are pursued, as a rule, by government agencies. We are talking about state governing bodies - ministries, departments, maslikhats, akimats, etc.

An institution is created, as a rule, by one person, but there is no prohibition on its formation by several persons. In this case, the rights of the owner are distributed and exercised in accordance with the founding agreement. 5. The property belongs to the institution by the right of operational management.

The institution manages its funds based on estimates approved by the owner.  

The property of the institution may be withdrawn or redistributed by the owner.  

An obligatory feature of an institution is the absence of income extraction as the main purpose of its activities. That is, the receipt of income by the institution is not excluded and is even possible in significant quantities. But this is not an end in itself.

Within the limits of their statutory legal capacity, institutions may conduct business activities. The right to conduct it should be fixed in the constituent documents. At the same time, institutions that are state bodies (ministries, departments, their subdivisions with the rights of a legal entity, etc.) are not entitled to engage in income-generating activities.  

The income received by the institution from authorized business activities is the property of the founder. However, the owner does not have the right to dispose of them. The income received by the institution from authorized business activities is placed at the independent disposal of the institution. They and the property acquired on them belong to the institution not on the right of operational management, but on a special property right that has not yet been terminologically defined in legislation and legal science.  

The institution is responsible for its obligations with the funds at its disposal. If they are insufficient, the subsidiary liability for its obligations is borne by the owner of the relevant property.

In accordance with paragraph 2 of the commented article, the specifics of the legal status of certain types of state and other institutions are determined by legislation. These are mainly representative and executive State bodies. The local level of these bodies is regulated by a single law (see the Constitution of the Republic of Kazakhstan). Nevertheless, ministries and departments operate on the basis of Government resolutions, presidential decrees, or parliamentary laws. Thus, in the system of the Ministry of Finance, by Presidential Decree of January 27, 1994  No. 1526 "On the formation of the Treasury of the Ministry of Finance of the Republic of Kazakhstan" has established a centralized system of Treasury bodies. By Resolution of the Cabinet of Ministers of the Republic of Kazakhstan dated May 20, 1994 No. 549 "Issues of the formation of the Treasury of the Ministry of Finance of the Republic of Kazakhstan", territorial departments and departments of the Treasury were given the status of institutions.

In addition to government agencies, supervisory authorities, such as the Prosecutor's Office, are also regulated by separate regulations. The Prosecutor's Office of the Republic of Kazakhstan forms a single centralized system of institutions and operates on the basis of the Constitution and the Presidential Decree, which has the force of a constitutional Law, dated December 21, 1995 "On the Prosecutor's Office of the Republic of Kazakhstan".  

The Administration of the President of the Republic of Kazakhstan, the Government of the Republic of Kazakhstan, the Parliament of the Republic of Kazakhstan, the Constitutional Council of the Republic of Kazakhstan, the Supreme Court of the Republic of Kazakhstan, the provisions of which are enshrined in the Constitution of the Republic of Kazakhstan, are recognized as legal entities in the form of an institution by virtue of the Constitution of the Republic of Kazakhstan.

The remaining state bodies, which are such by virtue of the Constitution of the Republic of Kazakhstan, constitutional laws, other legislative acts or decrees of the President of the Republic of Kazakhstan, are recognized as institutions if they are defined as a legal entity by the specified legislation or individual acts on their creation. State bodies that are not defined as a legal entity and are part of other State bodies that are legal entities are considered as structural divisions of a legal entity.  

The competence, structure, departmental subordination and other issues related to the exercise of the functions of a State body are determined by legislation or individual acts on the establishment of these State bodies.  

State bodies are considered as institutions if they enter into civil law relations not on behalf of the state, but on their own behalf, within the limits of the property allocated to them according to estimates (they conclude lease agreements for buildings, purchase and sale of stationery, equipment, furniture, are responsible for obligations for causing harm, commit other civil law acts).  

Institutions that are State bodies are considered established by virtue of legislation or acts on the establishment of the institution.

The founder of institutions that are State bodies is the State as a whole or represented by authorized State bodies.

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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.