Commentary to article 34. Types and forms of legal entities of the Civil Code of the Republic of Kazakhstan
The commented article distinguishes between two types of legal entities: commercial and non-profit organizations.
For a commercial legal entity, the main goal is to generate income. At the same time, of course, other purposes may also be pursued, for example, charitable purposes, but the main purpose is income.
Since obtaining income by a legal entity is possible only in the course of entrepreneurial activity (art. 10 of the Civil Code and its commentary), the pursuit of income, obtained, of course, by legitimate means, is useful for society.
The Law (the commented article) defines an exhaustive list of organizational and legal forms in which commercial legal entities can be established. The need for such organizational and legal clarity is caused by the desire of entrepreneurs to create various non-standard and combined economic entities (for example, a firm, corporation, trust, trust company, holding company, etc.) without accurately characterizing their organizational and legal form. Since the rights, duties, internal structure, competence of bodies and obligations largely depend on the organizational and legal form, the features of which, as a rule, are determined by "their own" law, the creation of "shapeless" legal entities makes it difficult to determine their true legal status. Therefore, by the Resolution of the Supreme Council of the Republic of Kazakhstan dated December 27, 1994 "On the enactment of the Civil Code of the Republic of Kazakhstan (General Part)" it is established that legal entities formed before the official publication of the Civil Code (General Part) in organizational and legal forms not provided for by the Civil Code (General Part) are subject to transformation into organizational and legal forms provided for by the Civil Code (General Part), until January 1, 1998.
As for the organizational and legal forms of non-profit legal entities, they are possible in broader variants than those mentioned in the article being commented on, but they should also be determined not by the uncontrolled desire of the founders, but by the appropriate legal boundaries.
Within these boundaries, it is quite possible to form a non-profit legal entity in the organizational and legal form of a joint-stock company, but it is required that such a form be clearly established by a legislative act on this type of legal entity. The Decree on Business partnerships stipulates that "in cases established by legislative acts, non-profit organizations may be established in the organizational and legal form of a joint-stock company."
An adequate confirmation is the text of paragraph 1 of Article 37 of the Securities Law: "The Stock Exchange is a non-profit self-regulatory organization created by professional participants in the securities market in the form of a joint-stock company".
Making a complete distinction between commercial and non-profit organizations can be difficult in practice. Firstly, because individual commercial legal entities, especially in the first years after their formation, spend all their income on developing their material base, improving technology, etc. and do not pay dividends to the founders. Secondly, some non-profit legal entities conduct very active business activities provided for by their charters. And, thirdly, finally, it is possible to form a non-profit legal entity in an organizational and legal form, which is usually used, as it was shown in paragraph 3, for commercial legal entities.
Therefore, the most reliable criterion for distinguishing is the legal possibility or impossibility of distributing net income between the participants (founders) of a legal entity. If a legal entity has the right, by virtue of a law or constituent documents, to distribute net income among participants (pay dividends), then it must be recognized as a commercial organization, regardless of whether regular dividend payments are made or not. If, by virtue of legislation or constituent documents, a legal entity is not entitled to pay dividends, it must be recognized as a non-profit organization. And all his income, if any, should be directed towards achieving the statutory goals.
Kazakh legislation consistently makes such a distinction, whereas the Civil Code of the Russian Federation allows for deviations. For example, Article 116 of the Civil Code of the Russian Federation establishes the possibility of distributing among the members of a consumer cooperative, which belongs to non-profit organizations, the income received from the activities of the cooperative.
The possibilities of entrepreneurship for commercial and non-commercial legal entities are different.
Commercial legal entities may engage in any type of entrepreneurial activity, except those that are explicitly prohibited in general form or specifically for any type of legal entity. Prohibitions may be contained in legislative acts or constituent documents of a legal entity. In other cases, a commercial legal entity has the right to make any transactions that are not prohibited by law or constituent documents (see paragraph 1 of Article 35 of the Civil Code).
On the contrary, a non-profit legal entity has the right to engage only in those types of entrepreneurship that correspond to its statutory goals.
In the terminology of legislative acts and official documents, state and non-state legal entities are often distinguished. State-owned entities should be understood only as those legal entities (enterprises and institutions) whose property is not divided into shares or shares and belongs entirely to the state as a whole (see art. 102 of the Civil Code).
All other legal entities are classified as non-governmental. Even those in whose authorized capital the state has some shares, some number of shares.
It is especially necessary to determine the place among legal entities of enterprises with foreign participation, i.e. joint ventures or foreign enterprises.
In everyday practice, the words "joint venture" sometimes refer to enterprises established by several entities, regardless of their nationality. This designation does not contain any social or legal characteristics. But even for enterprises with foreign participation, the terms "joint venture" or "foreign enterprise" characterize only the participation of foreign capital, but not their organizational and legal form, which must comply with the rules of art. 34 of the Civil Code. In practice, enterprises with foreign participation are formed in the Republic of Kazakhstan either in the form of a limited liability partnership or in the form of a joint-stock company.
The distinction between resident and non-resident legal entities is of great legal importance. This difference is primarily determined by the Law on Currency Regulation. According to Article 1 of this law, residents are legal entities established in accordance with the legislation of the Republic of Kazakhstan and located in the Republic of Kazakhstan. Residents, therefore, include not only legal entities formed by Kazakhstani founders, but also enterprises with foreign participation, which are mentioned in the previous paragraph of the commentary, if they are formed, have passed state registration in the Republic of Kazakhstan and have their location here (for the location of legal entities, see art. 39 of the Civil Code and commentary to it).
Non-resident legal entities include all other legal entities operating in or outside the Republic of Kazakhstan, unless they are covered by the above-mentioned concept of "resident".
Accordingly, branches and representative offices of legal entities (see Article 43 of the Civil Code and its commentary) are considered residents or non-residents, depending on whether those legal entities that include the relevant branches and representative offices are residents or non-residents.
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The commentary was prepared within the framework of the scientific and practical research program of the Scientific Research Center of Private Law of the Kazakh State Law University.
Head of the working group on the preparation of the draft Civil Code of the Republic of Kazakhstan, Corresponding Member of the Academy of Sciences of the Republic of Kazakhstan, Professor Suleimenov M.K.
Deputy head Professor Basin Yu.G.
