Commentary to article 69. Foreclosure on the share of a participant in a full partnership of the Civil Code of the Republic of Kazakhstan
A participant also withdraws from a general partnership when his personal creditors foreclose on his share in the partnership's property. Since such collection is allowed only if there is a shortage of other participant's property to cover their debts, it is obvious that such a participant completely lacks the property necessary to bear additional joint liability for the debts of the partnership. Settlements with creditors of the retiring participant are also made according to the rules of clause 2 of art. 67 of the Civil Code, that is, creditors receive the value of a part of the property of a general partnership in proportion to the participant's contribution to the authorized capital of the partnership. However, it should be borne in mind that a participant who has not fully contributed to the authorized capital of a general partnership does not own a share in the property of the partnership, but only the value of this part of the contribution (paragraph 5 of Article 17 of the Decree on Business Partnerships), and in this case creditors are entitled to allocate it accordingly.
In the case of foreclosure (by creditors) on a participant's share in the property of a general partnership, two important consequences occur, provided for in Articles 70 and 71 of the Civil Code.
The first concerns the responsibility of the participant, whose share has been foreclosed on by creditors for the debts of the partnership. Such a participant is not only deprived of his share in the property of the general partnership, but also becomes effectively unable to bear additional unlimited liability for the debts of the partnership on an equal basis with other participants due to the lack of the necessary property. In this regard, this participant, from the moment of foreclosure on his share by creditors, ceases to be liable for the debts of the general partnership (paragraph 4 of Article 70 of the Civil Code).
The second consequence concerns the liquidation of the partnership. The constituent documents or the agreement of the participants should provide that upon the withdrawal of a participant by way of foreclosure on his share in the property of the general partnership by the creditor (creditors), the general partnership may continue its activities. Otherwise, it is subject to liquidation (Clause 2, Article 71 of the Civil Code).
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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.
