Incorporation Documents of a Joint-Stock Company
📘 I. General Characteristics of the Incorporation Documents of a JSC
The incorporation documents of a joint-stock company (JSC) are the legal foundation of its existence, which:
- reflect the will of the founders to establish the company;
- define the organizational and legal parameters (purpose, structure, capital, governance procedures);
- ensure the identification and legitimation of the JSC in legal relations.
📑 II. Clause-by-Clause Commentary
🔹 Clause 1. Composition of Incorporation Documents
"The incorporation documents are the founding agreement (or decision of the sole founder) and the charter."
🔍 Depending on the number of founders, the documents vary:
| Case | Incorporation Documents |
|---|---|
| One founder | Decision of the sole founder and charter |
| Two or more founders | Founding agreement and charter |
📘 Founding Agreement:
- signed by all founders;
- contains obligations to establish the company, procedures for distributing shares, forming corporate bodies, etc.
📘 Charter:
- establishes the organizational structure, the rules for corporate governance, the rights and duties of shareholders;
- is binding on all third parties.
"The documents must contain information as defined by this Code and other legal acts of the Republic of Kazakhstan."
📎 Key Information Required in the Charter (per Article 9 of the Law of the Republic of Kazakhstan “On Joint-Stock Companies”):
- full and abbreviated name;
- legal form;
- location (legal address);
- subject and purpose of activities;
- information about the share capital;
- types and number of authorized shares;
- structure of governing bodies;
- profit distribution procedures;
- other provisions as required by law.
"The incorporation documents must be notarized."
📌 This requirement aims to:
- confirm the authenticity of the founders’ intent;
- provide legal protection to future company participants.
🔹 Clause 2. Termination of the Founding Agreement
"The founding agreement ceases to be effective upon the state registration of the issuance of authorized shares."
🔍 Legal logic:
- the founding agreement is necessary only during the formation stage;
- after registration of the share issuance, a legal entity is formed with its own charter;
- from that moment, only the charter is effective, and the agreement loses its force.
📘 Implications:
- the founding agreement is no longer used for corporate governance;
- any disputes are regulated by the charter and legislation, not the agreement.
🔹 Clause 3. Charter Approval Procedure
"The procedure for charter approval is established by the legislative acts of the Republic of Kazakhstan."
📎 According to the Law “On Joint-Stock Companies”:
- the charter is approved at the founding meeting (if multiple founders);
- or — by the decision of the sole founder;
- the charter must be registered with the justice authorities and attached to the application for JSC registration (Article 7 of the JSC Law).
⚖️ III. Judicial and Registration Practice
📌 Example 1: A JSC submitted its documents to the registering authority, but the charter lacked mandatory information about the number and types of authorized shares. Registration was suspended until the violation was corrected.📎 Legal basis: Clause 2, Article 9 of the JSC Law.
📌 Example 2: A court invalidated a transaction made on behalf of a JSC because the director lacked authority under the charter to act without the board of directors’ approval.
📚 IV. Related Legal Provisions
| Provision | Content |
|---|---|
| Civil Code of the Republic of Kazakhstan, Articles 85–86 | General provisions on JSCs |
| Law “On Joint-Stock Companies”, Articles 7, 9 | Charter requirements, approval procedures |
| Law “On State Registration of Legal Entities” | Charter registration procedure |
| Ministry of Justice Regulations | Administrative procedures for JSC registration |
| Civil Code of the Republic of Kazakhstan, Articles 41–42 | Incorporation documents of legal entities |
📊 V. Comparative Analysis with LLPs
| Criterion | LLP | JSC |
|---|---|---|
| Documents | Charter + decision (agreement) | Charter + founding agreement |
| Liability of participants | Within contribution amount | Within value of shares |
| Securities issuance | Not applicable | Share issuance is the main way to raise capital |
| Termination of founding agreement | Not applicable | Ceases after share issuance registration |
📝 VI. Conclusions and Recommendations
- The incorporation documents of a JSC are:
- the legal basis for the company’s registration and operation;
- a source for determining the scope of rights and obligations of shareholders and governing bodies;
- a crucial element of corporate responsibility.
- It is necessary to ensure:
- that the charter complies with the Law “On Joint-Stock Companies”;
- notarization of all documents;
- timely registration of the charter and share issuance.
- It is recommended to:
- use the standard charter approved by the authorized body for simplified registration;
- include in the charter detailed provisions on the authority of corporate bodies, procedures for issuing shares, and interaction with shareholders.
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.
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