Authorized Capital of a General Partnership
📘 Article 64 of the Civil Code of the Republic of Kazakhstan (CC RK): Authorized Capital of a General Partnership
🔹 1. General Concept of Authorized Capital
The authorized capital is the initial asset fund formed by the founders of a legal entity, which:
· serves as a guarantee for creditors;· indicates the financial viability of the organization;· determines the shares and liability of the founders.
In the case of a general partnership, the authorized capital also confirms the minimum property resources available to the partnership in addition to the personal liability of its participants.
🔹 2. Establishment of a Minimum Size
Legal provision: “The size of the authorized capital of a general partnership is determined by its founders, but cannot be less than the minimum size established by legislative acts of the Republic of Kazakhstan.”
📌 Analysis:
· Participants are free to determine the amount of the authorized capital, but it must not be below the minimum threshold set by law.· This minimum serves as a filter against fictitious and unscrupulous registrations and ensures at least a basic level of solvency.
📘 Related Legal Norms:
· Article 59 CC RK – defines forms of contributions and rules for their valuation.· Law of the RK “On State Registration of Legal Entities” – includes requirements for registration in case of non-compliance with capital size.· Law of the RK “On Microfinance Activity” – applicable to microfinance organizations.· Law of the RK “On Collection Activities” – regulates the activities of collection agencies.
🔹 3. Sector-Specific Features
🏦 Microfinance Organizations (MFOs):
Creating an MFO as a general partnership requires compliance with a specific minimum capital threshold established by:
· the Law of the RK “On Microfinance Activity”;· and regulations of the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market (ARRFR).
📌 As of 2024, for example, the minimum authorized capital for MFOs may be KZT 100 million, but this amount is subject to annual review in regulatory acts.
💼 Collection Agencies:
These may also be established as general partnerships, but:
· they are subject to a separate minimum capital requirement;· regulated by the Law of the RK “On Collection Activities”;· requirements are often tied to the volume of debt the agency is allowed to service.
🔹 4. Legal Consequences of Non-Compliance
If the authorized capital of a general partnership:
· does not meet the minimum threshold,· or is not formed within the established timeframe,then the following consequences may apply:
⚠️ Refusal of Registration:
· The justice authorities may refuse registration if documents confirming the formation of the minimum capital are not submitted.
⚖️ Compulsory Liquidation:
· In case of false information about the capital – compulsory liquidation may be initiated upon the claim of an authorized body (see Article 49, para. 2 CC RK).
🔹 5. Case Law Example
📍 Case No. 2-1180/2022 (Almaty)
The court declared the registration of a collection agency in the form of a general partnership invalid because the charter documents indicated an authorized capital of KZT 3 million, while the statutory minimum was KZT 10 million. The decision was based on violation of sector-specific legal provisions.
🔹 6. Practical Recommendations
✅ When establishing a general partnership:
· Check sector-specific legislation if the activity is subject to regulation (MFOs, collectors, financial institutions).· Document the contribution — especially in kind (valuation required).· Include accurate information on contribution structure and amount in the founding documents.
✅ During registration:
· Submit payment documents or valuation reports.· For cash contributions — provide bank account statements.
🔹 7. Conclusion
Article 64 of the Civil Code of the RK serves as a financial safeguard, limiting the registration of business entities unable to demonstrate minimum solvency. The establishment of a minimum capital is not just a formality but a foundation of trust in civil turnover — especially considering the unlimited liability of general partnership participants.
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.
Attorney at Law Almaty Lawyer Legal Services Legal Advice Civil Criminal Administrative Cases Disputes Protection Arbitration Law Firm Kazakhstan Law Office Court Cases
