Commentary to article 36. The rights of the founders (participants) to the property of the legal entities created by them The Civil Code of the Republic of Kazakhstan  

Each legal entity has separate property. The commented article defines what rights its creators and founders have to this property (see Article 40 of the Civil Code). There are three possible options here:

a) have property rights (first of all, the right of ownership);  

b) have binding rights;  

c) do not have any property or binding rights.  

The State has property rights in relation to the property of State-owned enterprises and institutions. It is the State, as the owner, that can, within certain limits, dispose of the property of state-owned enterprises and institutions. This property is returned to the state (owner) upon liquidation of state-owned legal entities.  

State-owned legal entities themselves have the right of economic management (XB) or the right of operational management (OU) for the property assigned to them. These rights are inseparable from State property. This means that the acquisition by a state-owned legal entity of a particular property leads to the simultaneous emergence of both XB or OU rights and state property rights to this property. Moreover, this also applies to the case when the property falls to a state-owned legal entity under a donation agreement or a will.  

The sale or other alienation of one's property by a State-owned legal entity to a non-State entity leads to the simultaneous termination of the right of State ownership of the property.  

The founder of such an institution has the right to own the property of a non-governmental institution. The content of its ownership rights is similar to the content of the State's right to the property of a public institution.

With respect to the property of an economic partnership or cooperative, its creators (founders, participants) have only the right of obligation, but not the right of ownership. This means that any participant can claim his share in total terms, but cannot demand the transfer to him of a part of a building, any car, land plot, etc. Ownership of all property belongs to an economic partnership or cooperative as a legal entity.

It should be clearly understood that the property of a business partnership or cooperative is not the common property of the members of the partnership (cooperative), but the monosubject property of a legal entity.  

But there is also a type of partnership, the participants of which have more complex powers on its property than obligatory ones - this is a joint-stock company.

A member of the joint-stock company, a shareholder, does not have any property rights in relation to the property of the current joint-stock company. The owner of the property is a joint-stock company as such, and the shareholder has ownership rights only to securities and shares. By owning shares, a shareholder acquires the right to manage the company, receive dividends and some other rights, but not the right to cash out his share in the property. In other words, a shareholder wishing to leave the company has no right to demand that the latter purchase his shares (unless otherwise provided by the company's articles of association). His (the shareholder's) property interests, if desired, can be secured only by selling his shares to another person who agrees to buy them.  

A special case arises when a state-owned enterprise is transformed into a joint-stock company, with the state retaining a controlling stake or even all shares.

To whom does the ownership of the property of such a joint-stock company belong?  

It is often believed that, even after being transformed into a joint-stock company, such an enterprise belongs to the state. That's what they call it: state-owned JSC.  

But, in legal terms, this is wrong. A joint-stock company, even one formed by the state, becomes the subject of ownership of its property, while the state, represented by the one who manages the shares, becomes the owner of the shares. Economically, this does not weaken the power of the state over the property of a legal entity, since, having the majority of shares, the state, giving instructions to the one who manages the shares on behalf of the state, has the opportunity to make any decision on the disposal of property through the JSC bodies. But legally, such an order is carried out not through the administrative decisions of the ministry (department, state committee), but through the decision of the management bodies of the joint-stock company.  

Similarly, the property of a subsidiary legal entity is managed by the parent company.  

There are also such legal entities, the founders (participants) of which do not have any real or binding rights to the property of a legal entity. They are named in paragraph 4 of the commented article. This means that members, organizers, founders, participants of public associations, public foundations, and religious associations are not entitled to make any property claims against these associations, including the return of money transferred in the form of entrance or membership fees, donations, etc.

Even in the event of liquidation of such a legal entity, the remaining property after payment of debts does not pass to the members, participants, founders, organizers, but is directed to the purposes defined by the charter of the legal entity.

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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.