Constituent documents of a legal entity

📘 1. General Overview of the Article

Article 41 of the Civil Code of the Republic of Kazakhstan defines:

• which documents are considered constitutive (founding) documents;
• what must be included in these documents;
• differences in document composition based on organizational-legal forms;
• legal consequences of inconsistencies between the charter and the founding agreement;
• access to the charter for interested parties.

This article forms the foundation for the creation of a legal entity and governs the legal basis of its operation.

📁 2. Types of Constitutive Documents (Part 1)

There are three possible configurations:

🔹 Additionally:

• Non-profit organizations may operate based on:
  • A general regulation;
  • A model charter developed by a government authority;
• Business entities (SMEs, large enterprises) may opt for:
  • A model charter approved by the Ministry of Justice of the Republic of Kazakhstan (Order No. 276 of December 24, 2011, as amended).

📌 Choosing a model charter simplifies registration but limits management flexibility.

🤝 3. Founding Agreement (Parts 2 and 4)

Not required if the legal entity is founded by a single person.

Contents include:

• obligation to establish a legal entity;
• procedure for participation and property contribution;
• income distribution;
• exit procedure;
• approval of the charter.

🔹 Parties may also include additional provisions by agreement (e.g., minority protection, dispute resolution procedures).

📌 The founding agreement is not subject to disclosure to third parties (unlike the charter).

📜 4. Charter of a Legal Entity (Part 5)

The main internal document of a legal entity.

Mandatory information:

• full name;
• location;
• structure and powers of governing bodies;
• procedures for reorganization and liquidation.

🔹 If there is one founder, the charter must also include:

• procedures for property formation;
• procedures for income distribution.

🔹 Additional provisions may include:

• conditions for the alienation of shares;
• procedures for convening meetings;
• quorum and decision-making rules;
• management features depending on the business type.

⚖️ 5. Inconsistencies Between the Charter and the Founding Agreement (Part 6)

Priority rules vary depending on the parties involved:

📌 This is important to protect counterparties who have access only to the charter.

📂 6. Decision of a Sole Founder (Part 4-1)

A document that replaces the founding agreement when a legal entity is established by a single founder.

Mandatory contents:

• the fact of establishing the legal entity;
• property contribution;
• other decisions not contrary to the law.

📌 If the founder is a legal entity, the decision must be made by its authorized body (e.g., general meeting or board of directors).

📬 7. Accessibility of the Charter (Part 7)

All interested parties have the right to access the charter.

🔹 This ensures:

• transparency in the legal entity’s activities;
• protection of third parties' rights (e.g., investors, creditors);
• compliance with the principle of good faith.

📌 The charter can be requested from:

• justice authorities;
• the legal entity itself (via written request);
• the eGov portal.

⚙️ 8. Practice and Examples

🔹 Example 1: LLP with multiple foundersThe founding agreement granted one participant a preferential right to appoint the director, which was not specified in the charter.📜 The court ruled: in relationships between founders, the founding agreement prevails.

🔹 Example 2: Discrepancy between the charter and BINThe address listed in the charter differed from the actual address. Letters sent to the address in the charter were deemed properly delivered.📜 This aligns with Article 39 of the Civil Code of the Republic of Kazakhstan — the address in the charter has priority.

🧾 9. Related Legal Norms

🌍 10. International Standards

✅ UNIDROIT Principles of International Commercial Contracts — emphasize the importance of transparency and accessibility of founding documents for parties involved.

✅ OECD Guidelines for Corporate Governance — recommend maintaining a balance between public access and protection of commercial confidentiality (agreement = private, charter = public).

✅ 11. Conclusion

Article 41 of the Civil Code of the Republic of Kazakhstan:

• regulates the foundation of legal personality for legal entities;
• sets out requirements for founding documents;
• protects the interests of both members and third parties;
• promotes legal certainty and good faith in business transactions.

🔹 Properly drafted charter and founding agreement are key to the stability and predictability of corporate relations.

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.  

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