Commentary to article 88. The authorized capital of the joint-stock company of the Civil Code of the Republic of Kazakhstan
The authorized capital of a joint-stock company is the sum of the nominal values of the shares acquired by the shareholders. His education should create a minimum of guarantees for the interests of the company's creditors. Depending on the results of the economic activity of the joint-stock company, the value of its property may be more or less than the authorized capital. When creditors of a joint-stock company are foreclosed on, the object of foreclosure is all of its property, including the authorized capital. In this regard, the minimum size of the authorized capital of a joint-stock company is significantly larger than the minimum size of the authorized capital of other types of business partnerships. The authorized capital may not be less than ten thousand for open companies, and less than five thousand for closed ones, in the amount of monthly calculation indices established in the Republic of Kazakhstan at the time when shareholders made contributions to the authorized capital (clause 1 of Article 40 (previously 57) of the Decree on Business Partnerships).
A special procedure for the formation and use of the authorized capital has been established for JSC. By the time the company is registered, the founders must contribute at least 50 percent of the amount of the authorized capital stated in the founding documents. The remaining part of the authorized capital must be paid in during the first year of the JSC's activity. Otherwise, the company is subject to liquidation in court at the request of interested parties. Joint-stock companies (as well as creditors in the event of a shortage of the company's property to cover its debts) have the right to sue shareholders who have not contributed to the authorized capital for payment of the missing amounts of deposits. At the same time, participants who have not paid part of their contribution may be sanctioned in the form of interest on the amount of the unpaid part of the contribution. The amount of interest is calculated based on the refinancing rate determined by the National Bank of the Republic of Kazakhstan on the day of payment. A joint-stock company is also subject to judicial liquidation at the request of interested parties if the value of the company's net assets is less than the minimum amount of the authorized capital (clauses 2 and 4 of art. 40 (previously 57) of the Decree on Business Partnerships).
All shareholders, who are required by the Civil Code to pay in full for the acquired shares, must participate in the formation of the authorized capital of a joint-stock company. None of them can be relieved of this duty. A shareholder's claim against the company as payment for shares cannot be offset. This strict rule is based on the need to create a real material base for the activities of the joint-stock company. To start its activity, a joint-stock company must have an authorized capital of the declared size. Therefore, when it is established, all shares must be distributed among the founders. For open companies, the rule is that an open subscription to shares is not allowed until the full payment of the authorized capital. In this regard, entrepreneurs have two opportunities to attract the necessary capital for their production and commercial activities by selling shares of open joint-stock companies they establish. The first is when the founders, having fully paid off the authorized capital of the joint-stock company, subsequently sell part of their shares on the secondary stock market and thus can return the invested money without excluding them from the company's turnover. The second possibility is provided by art. 89 of the Civil Code, according to which a joint-stock company, whose authorized capital is fully paid up, has the right, by decision of the general meeting of shareholders, to increase it by issuing additional shares. The sale of additional shares of the company to the general public is carried out after their registration, as well as the initially issued shares, with the National Securities Commission of the Republic of Kazakhstan.
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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.
