Concept of a Legal Entity
📘 1. General Description of the Article
Article 33 of the Civil Code of the Republic of Kazakhstan defines the concept of a legal entity, recognizing it as an independent subject of civil law possessing property, legal capacity, procedural independence, and an organizational structure.
📌 This is one of the fundamental provisions of civil legislation, without which the functioning of property turnover, entrepreneurship, and economic entities would be impossible.
⚖️ 2. Legal Entity: Key Characteristics
According to Part 1 of Article 33 of the Civil Code of the Republic of Kazakhstan, a legal entity must possess the following set of characteristics:
🔹 1. Separate Property
A legal entity owns property:
· under the right of ownership; or· under the right of economic management (for state enterprises); or· under the right of operational management (for treasury enterprises and budgetary organizations).
📌 This property is separated from the property of participants or the state, ensuring property autonomy.
🔹 2. Independent Property Liability
A legal entity:
· is independently liable for its obligations;· its participants (founders) are not liable for its debts(except in cases directly established by law — see, for example, Article 94 of the Civil Code).
🔹 3. Legal Capacity
A legal entity may:
· acquire and exercise rights and obligations;· enter into contracts;· act as a claimant or defendant in court;· possess personal non-property rights related to business reputation, trade name, and other attributes.
🔹 4. Organizational Structure
A legal entity must:
· be established in the form of an LLP, JSC, general partnership, peasant (farm) enterprise, etc.(see Articles 34–41 of the Civil Code);· have a charter, governing bodies, a registered address, and official details.
🔹 5. Independent Balance Sheet or Budget
A legal entity is required to:
· maintain records of its property and obligations;· prepare a balance sheet (for commercial organizations) or· a budget/estimate (for non-commercial organizations).
📎 3. Part Two: The Seal of a Legal Entity
“A legal entity shall have a seal bearing its name...”
🔹 General Rules:
· A legal entity must have a seal containing its full name;· The seal confirms the official nature of documents and the legitimacy of signatures.
🔹 Exception:
· Private entrepreneurship entities(for example, individual entrepreneurs or micro-enterprises in the form of an LLP)may operate without a seal unless otherwise provided by law.
📌 However, in certain cases(banking documents, notarized powers of attorney, public procurement),a seal is mandatory even for small business entities.
📚 4. Related Legal Provisions
| Legal Norm | Content |
|---|---|
| Civil Code of the Republic of Kazakhstan, Articles 34–41 | Types and legal capacity of legal entities |
| Law of the Republic of Kazakhstan “On State Registration of Legal Entities” | Registration procedure, name, governing bodies |
| Tax Code, Articles 10 and 217 | Tax registration obligations, reporting forms |
| Law “On Accounting and Financial Reporting” | Maintenance of balance sheets |
| Law “On Private Entrepreneurship” | Specific features of MSMEs |
🧾 5. Examples from Judicial Practice
🔹 Example 1: Almaty, 2022
An LLP filed a claim against a supplier under a supply contract. The defendant argued that the absence of a seal rendered the contract invalid.📜 The court stated that, due to legislative amendments, small business entities are entitled not to use a seal. The transaction was recognized as valid.
🔹 Example 2: Karaganda, 2021
A JSC registered as a state enterprise transferred property held under the right of economic management to a third party.📜 The court declared the transaction invalid, stating that disposal of property under the right of operational management requires the consent of the owner (the state).
🌍 6. International Approaches
✅ UNIDROIT Principles of International Commercial Contracts:
· Recognize legal entities as independent participants in international commerce;· Allow them to enter into contracts, own property, and participate in arbitration.
✅ UNCITRAL Model Law on Legal Entities:
· Establishes that recognition of a legal entity is based on:o legal separateness;o property independence;o registration-based nature.
🧠 7. Key Legal Conclusions
| Question | Answer |
|---|---|
| Can a legal entity exist without registration? | ❌ No. Only after state registration (Article 42 of the Civil Code) |
| Is a seal mandatory? | ✅ Generally yes, but private entrepreneurship entities may operate without one |
| Is the founder liable for the legal entity’s debts? | ❌ Only in exceptional cases (e.g., fault-based bankruptcy — Article 94 of the Civil Code) |
| Can non-commercial organizations be legal entities? | ✅ Yes, if they meet the requirements of Article 33 of the Civil Code |
✅ 8. Conclusion
Article 33 of the Civil Code of the Republic of Kazakhstan provides a fundamental definition of a legal entity in Kazakhstani law, establishing:
· the characteristics of an independent subject;· property separateness;· legal capacity and procedural independence;· requirements regarding seals and document circulation.
🔹 This article forms the foundation for the application of all legal norms concerning legal entities, their registration, legal capacity, and liability.
Attention!
Law and Law Law Law draws your attention to the fact that this document is basic and does not always meet the requirements of a particular situation. Our lawyers are ready to assist you in legal advice, drawing up any legal document suitable for your situation.
For more information, please contact a Lawyer / Attorney by phone: +7 (708) 971-78-58; +7 (700) 978 5755, +7 (700) 978 5085.
Attorney at Law Almaty Lawyer Legal Services Legal Advice Civil Criminal Administrative Cases Disputes Protection Arbitration Law Firm Kazakhstan Law Office Court Cases
