Commentary to article 95. Dependent Joint Stock Company of the Civil Code of the Republic of Kazakhstan
A dependent joint-stock company is also not a special organizational and legal form of a commercial organization. We are talking about the possibility of one legal entity to significantly influence the decision-making of another legal entity - JSC. This possibility is based on its participation in the company's authorized capital, which, however, does not reach the degree of a "controlling interest", that is, it does not allow us to talk about such relationships as the relationship of a parent and a subsidiary legal entity. The Civil Code defines an affiliated joint-stock company as a company in the authorized capital of which another legal entity has more than 20 percent of its voting shares.
This kind of relationship of dependence of one legal entity (JSC) on another does not generate mutual or additional liability for debts. They only require the publication of this circumstance by the prevailing (participating) legal entity for the information of all other participants in the property turnover in accordance with the procedure determined by legislative acts. However, there are currently no special legislative acts regulating this issue.
In addition, such relationships may have implications for antimonopoly law, which may determine the limits of such influence. In this regard, the Civil Code establishes a general rule concerning only the mutual influence that can form between joint-stock companies. In accordance with it, the mutual participation of companies in each other's authorized capitals may not exceed 25 percent of each of the authorized capitals, unless otherwise provided by legislative acts. Joint-stock companies that are mutually involved in each other's authorized capital may not use more than 25 percent of the votes at the general meeting of shareholders of another company. Other limits may be set by other laws (on insurance, on banks, etc.). These rules are established in order to prevent small shareholders from being excluded from real participation in the management of the company's affairs and in order to comply with antimonopoly legislation.
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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.
