Limited Partnership Contributor

📘 I. General Characteristics of the Institution of a Contributor

A contributor (limited partner) is a participant of a limited partnership who:

• contributes a share (monetary, property, or other);
• does not participate in the business activities of the partnership;
• bears limited liability – within the limits of their contribution;
• has limited but legally protected rights.

This institution is designed to allow an investor to share in profits without the risk of unlimited personal liability.

📑 II. Commentary by Points

🔹 Point 1. Obligation to Make a Contribution

The contributor is obliged to make the initial contribution and, if necessary, additional contributions, provided that this is explicitly stipulated in the founding documents (charter or partnership agreement).

📎 Related norms:

• Article 69 of the Civil Code of the Republic of Kazakhstan (CC RK) — on the form and procedure of contribution;
• Article 41 CC RK — on the content of founding documents;
• Article 42 CC RK — on state registration of amendments to the charter.

📌 Example: If the partnership’s charter stipulates that the contributor must annually increase their share by 10% of the profit, such a requirement is legally valid and binding.

🔹 Point 2. Rights of the Contributor

Let’s examine each right in detail:

🔸 1) Right to Profit

The contributor is entitled to a share in net profit, which is determined proportionally to their share in the charter capital, unless otherwise provided by the charter.

📌 Case law: In case No. 2-4841/2022, the court rejected the contributor’s claim to 50% of the profit, since according to the charter their share was only 20%.

🔸 2) Right of Access to Financial Information

This right ensures transparency and protects the interests of the passive investor:

• review of financial statements;
• demand for verification of the accuracy of documents.

📎 Related norms:

• Law of the Republic of Kazakhstan “On Accounting and Financial Reporting”;
• Entrepreneurial Code of the Republic of Kazakhstan (Article 131 – obligation to maintain documentation).

🔸 3) Right to Transfer a Share

The contributor may transfer their share to:

• another contributor;
• a third party, subject to restrictions in the charter and legislation.

🛑 Important: transfer of the entire share terminates the contributor’s participation in the partnership.

📌 Case law: In case No. 3-2743/2021, the court declared the transfer of a share to a third party invalid, since the charter did not contain consent of the general partners, which violated the procedure.

🔸 4) Right to Withdraw from the Partnership

Withdrawal is possible:

• by personal application;
• in the manner provided by the charter and the law.

📎 Related norms:

• Article 52 CC RK — termination of participation;
• Article 49 CC RK — withdrawal from business partnerships.

📌 Participation terminates after payment of the contributor’s share in the property based on valuation results.

🔹 Other Rights

Founding documents may expand the contributor’s rights, but:

🔒 It is prohibited to restrict or abolish the fundamental rights established by law — such provisions are void.

📎 Legal basis: Article 8 CC RK — prohibition of restricting civil rights outside the law.

⚠️ Point 3. Contributor’s Liability for Unauthorized Transactions

If a contributor enters into a transaction on behalf of the partnership without a power of attorney or authority, two outcomes are possible:

✅ If the partnership approves the actions:

• the partnership bears full liability to the counterparty.

❌ If approval is not granted:

• the contributor is personally liable with all their property;
• they lose the protection established by Article 72 CC RK.

📌 Case law: In case No. 2-3912/2020, a contributor signed a lease agreement on behalf of the limited partnership without a power of attorney. The partnership refused to recognize the transaction, and the court recovered damages from the contributor personally.

📎 Related norms:

• Article 157 CC RK — representative’s authority;
• Article 145 CC RK — unauthorized transactions;
• Article 272 CC RK — restitution and consequences of invalidity.

⚖️ III. International Comparison

A similar approach exists in international practice:

🔑 General principle: limited liability applies as long as the contributor does not interfere in management.

📚 IV. Related Norms

📝 V. Conclusions and Recommendations

1. The contributor has a clearly limited role — they do not manage, but invest and monitor.
2. It is inadmissible to deprive the contributor of statutory rights — any restrictions in the charter will be void.
3. Entering into transactions without authority is extremely risky for the contributor: they lose legal protection.
4. It is recommended to stipulate in the charter:
   • the procedure for withdrawal of a contributor;
   • conditions for approval of transactions;
   • mechanism for share transfer. 

Attention!   

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