Transfer of a Share (Part of a Share) of a Participant in a General Partnership

📘 Article 66 of the Civil Code of the Republic of Kazakhstan: Transfer of a Share of a Participant in a General Partnership

🔷 General Characteristics

A general partnership is an organization based on the personal participation of individuals and their unlimited joint (solidary) liability. For this reason, issues related to the transfer of a share—especially to third parties or heirs—are strictly limited.

📍 Paragraph 1: Transfer of a share is possible only with the consent of all participants

“A participant may transfer his share to other participants or to third parties only with the consent of all other participants.”

Analysis:

• This reflects the personalized nature of a general partnership — participants must trust each other.

• The absence of consent from even one participant means that the transfer of the share is prohibited.

• The law excludes the free circulation of shares, unlike in a Limited Liability Partnership (LLP), where a pre-emptive right of purchase is allowed.

Related provisions:

• Article 65 of the Civil Code of the Republic of Kazakhstan — regulates the internal affairs of the partnership.

• Article 224 of the Civil Code of the Republic of Kazakhstan — assignment of claims: it does not fully apply to shares in a general partnership without the consent of other participants.

Practice:

In a court case regarding the recognition of a transfer of a share in a general partnership as invalid due to the absence of consent from all participants, the court declared the transaction void, referring to a violation of Paragraph 1 of Article 66 of the Civil Code of the Republic of Kazakhstan (case No. 2-1192/2020).

📍 Paragraph 2: Transfer of rights and obligations upon transfer of a share

“The transfer of a share to a third party entails the transfer of all rights and obligations of the withdrawing participant.”

Analysis:

• The new participant receives not only a share in the capital but also:

  • the obligation to make contributions (if not fulfilled),

  • liability for the obligations of the partnership,

  • the right to participate in management.

📌 This makes the institution of succession in a general partnership special — partial “entry” into the partnership is not allowed.

📍 Paragraphs 3–4: Inheritance of a share and legal succession

“An heir may join the partnership only with the consent of all participants…”

Analysis:

• There is a strict entry regime: the heir cannot automatically join the partnership.

• Unanimous consent of the remaining participants is required.

• The successor who joins the partnership bears liability:

  • before the partnership itself,

  • and before third parties — for all debts that arose during the entire period of the partnership’s existence.

Practice:

An heir was denied recognition as a participant in a general partnership because one of the existing participants objected. The court held that entry is possible only with the consent of all participants (case No. 2-3845/2021, Almaty).

📍 Paragraph 5: Refusal to join — payment of the value of the share

“In the event of refusal to join the partnership… the successor shall be paid the value of the share.”

Analysis:

• The payment is calculated as of the date of the participant’s death, not the date of the claim or court decision.

• The payment is made from the property of the partnership, which decreases accordingly, and the founding documents must be amended.

Related provisions:

• Article 59 of the Civil Code of the Republic of Kazakhstan — establishes how the value of a share in property is determined.

• The Law of the Republic of Kazakhstan “On Accounting and Financial Reporting” — used when determining the value of a share.

Practice:

The successor of a participant demanded 50% of the partnership’s assets, including future income. The court rejected the claim, stating that the calculation must be made as of the date of the participant’s death based on accounting data (case No. 2-982/2022).

📌 Conclusions

Article 66 of the Civil Code of the Republic of Kazakhstan establishes:

• the personal nature of membership in a general partnership;

• the requirement of unanimous consent for the transfer of a share to third parties and heirs;

• the direct liability of the new participant for all obligations;

• a compensation mechanism in case of refusal to join the partnership.

⚖️ International parallels

• In German law (Handelsgesetzbuch, §131) and French law (Code de commerce), the principle of personal liability and consent for admitting new participants into a general partnership (société en nom collectif) also applies.

• These approaches are also supported in the model legislative acts of UNCITRAL.

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