Levy of Execution on the Share of a Participant in a General Partnership

📘 Article 69 of the Civil Code of the Republic of Kazakhstan: Levy of Execution on the Share of a Participant in a General Partnership

🔷 General Characteristics

A general partnership is based on the personal participation of its partners and their joint and several liability. A participant’s share in the partnership property cannot be arbitrarily transferred or used in the interests of third parties without the consent of the other participants (see Article 66 of the Civil Code of the Republic of Kazakhstan).

However, in the case of a participant’s personal debts, the law allows execution to be levied on his or her share, subject to certain conditions.

🔹 Paragraph 1. Conditions for Levy of Execution

“Permitted only in the absence of other sufficient property…”

📌 Conditions:

1. Execution is possible only if the debtor has insufficient other property:

• The creditor must prove that the debtor-participant has no other liquid assets.

• This is an exceptional measure, not one applied by default.

1. The creditor has the right to demand the allocation of the share from the partnership property:

• The share may be allocated in kind or in monetary form (based on the balance sheet).

• It is determined proportionally to the debtor’s share in the authorized capital.

1. Valuation and balance sheet:

• A balance sheet is prepared as of the date of the claim.

• The rules of Article 67 of the Civil Code (regarding calculation of the share upon withdrawal of a participant) apply.

📌 Important: a participant’s share in a general partnership is not a property (real) right, but a set of corporate and property rights. Therefore, direct sale through public auction is impossible without prior allocation in kind or valuation.

🔹 Paragraph 2. Legal Consequences

“Levy of execution… terminates his participation…”

⚖️ Consequences:

• The participant is excluded from the partnership;

• The consequences provided for by the following articles apply:

• Article 70 — liquidation of the partnership upon withdrawal of participants;

• Article 71 — rules for the withdrawal of a participant when the partnership continues.

🧩 Examples:

• If only one participant remains, the partnership is subject to liquidation (Article 70).

• If other participants remain, the partnership continues, and the withdrawn participant’s share must be compensated (Article 71).

📚 Related Provisions

⚖️ Judicial Practice

Example from practice (Case No. 2-4213/2022, Almaty):

A creditor filed a claim with the court seeking to levy execution on the share of a participant in a general partnership due to a personal debt. The court established that the debtor had no other property and ordered that the share be allocated in monetary form. After that, the partnership approved the relevant balance sheet, and the participant was recognized as having withdrawn from the partnership.

📌 Specific feature: the partnership has no right to refuse the creditor’s request for allocation of the share when legal grounds exist — this is not a discretionary right but an obligation arising from Article 69.

🔚 Conclusions

1. Levy of execution on a share in the property of a general partnership is an extreme measure applied only in the absence of other property.

2. The procedure requires balance sheet valuation and results in termination of the participant’s membership in the partnership.

3. The creditor may receive the share in kind or in monetary form.

4. After execution is levied, the rules on withdrawal of a participant or liquidation of the partnership apply.

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