Commentary to article 85. The concept of a joint-stock company  The Civil Code of the Republic of Kazakhstan  

A commercial organization formed by one or more persons who are not responsible for its obligations, with the authorized capital divided into equal shares, the rights to which are certified by securities - shares, is called a joint-stock company (JSC). The main difference between a joint-stock company and other types of legal entities is the way in which the participant's (shareholder's) rights of obligation are secured in relation to the company's property by certifying them with shares. The shares issued by this JSC must have the same nominal value. The holders of shares, the shareholders, are not liable for the company's obligations, but only bear the risk of losses - the loss of the value of their shares.

In accordance with Clauses 1 and 2 of Article 139 of the Civil Code, a share is a security certifying the right of its holder (shareholder) to receive a portion of the net income of a joint-stock company in the form of dividends, to participate in the management of the company's affairs and to part of the property remaining after its liquidation.  

A joint-stock company has the right to issue preferred shares in accordance with the procedure and limits established by law, guaranteeing their holders to receive dividends, as a rule, in fixed percentages of the nominal value of the share, regardless of the results of the company's business activities, as well as giving them a preferential right over other shareholders to receive part of the property remaining after the liquidation of the joint-stock company, and other conditions provided for the right to issue such shares. Preferred shares do not give their holders the right to participate in the management of the JSC's affairs, unless otherwise provided by its charter.

The share must contain the following details: the corporate name of the joint-stock company and its location; the name of the security - "share", its serial number, date of issue, type of share (common or preferred) and its nominal value, the name of the holder (for a registered share); the amount of the authorized capital of the joint-stock company on the day of the share issue, as well as the number of issued shares; terms of payment of dividends; signature of the Chairman of the Management Board and the Chief Accountant of the company. The Company may issue registered and bearer shares, unless otherwise provided by the securities legislation (clauses 4 and 5 of art. 44 (previously 61) of the Decree on Business Partnerships). The securities legislation allows joint-stock companies to issue only registered shares. At the same time, registered shares may not be issued on paper, that is, in the form of a separate document. By decision of the supreme management body of the JSC, the rights expressed in registered shares may be certified by an entry in the issuer's documents (register) or using electronic computing equipment (in computer memory), without the actual issue of shares in a materialized form. At the request of shareholders, their rights may be confirmed by a securities certificate or certified in another form by the registrar or nominee holders (Articles 7 and 8 of the Securities Act). Thus, such a shareholder does not use a security to exercise or transfer his rights, but a "record" certifying his rights in relation to the company. Regarding such objects ("records"), there are not real, but binding relations. It should be emphasized that all these special ways of fixing shareholders' rights are permissible only for registered shares and are excluded for bearer shares.  

The JSC's property is completely separate from the property of its participants. The shareholders of a company, unlike participants in other types of business partnerships, cannot withdraw from it, while withdrawing their share in its property. A participant's withdrawal from a joint-stock company is carried out only by alienating its shares.

The joint-stock company is responsible for its obligations within the limits of its property. The Company is not liable for the obligations of its members. Creditors of shareholders may not, like creditors of participants in other types of business partnerships, require a joint-stock company to allocate a share of a debtor shareholder from its property.  

The initial source of the formation of the JSC's property is the sums of money (although payment may be in kind or otherwise) contributed by the participants to pay for shares. Late payment of shares weakens loan guarantees and can significantly complicate the company's business activities, which are deprived of financing provided for by the charter. A strict rule has been established to encourage participants to pay for promotions on time.: shareholders who have not fully paid for the shares are jointly and severally liable for the obligations of the Joint-Stock Company to the extent of the unpaid value of their shares.  

An AO, like an LLP, can be a "one-person company." A company may not have as its sole participant another business partnership consisting of one person (clause 4 of art. 37 (previously 54) of the Decree on Business Partnerships).

The legislative acts mentioned in the commented article primarily refer to the Decree on Business Partnerships, as well as others, such as the Decree on Insurance, the Decree on Banks and Banking Activities, and others.

During the privatization of state-owned enterprises, the joint-stock form of business organization was used for purposes directly opposite to those for which joint-stock companies are established, namely, the "distribution" (distribution) of state property, and not for the concentration of capital. Therefore, the specifics of the legal status of joint-stock companies established through the privatization of state-owned enterprises should be determined by the legislation on privatization.

Comments on The Civil Code The Code of Criminal Procedure The Criminal Code The Normative resolution of the Supreme Court The criminal legislation The normative legal acts of the Republic of Kazakhstan  

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.