To start your own business, first of all, you should decide whether it is necessary to set up a legal entity as according to the current legislation an individual may carry out the entrepreneurship activity as an individual proprietorship.
While making the decision to set up a legal entity (a limited liability company, joint-stock company, production co-operative, holding, etc.) the main purpose of which is making profit it is necessary to define a form of such legal entity.
After the state registration you bear the full responsibility for all actions realized by the enterprise till the moment it is taken off from the state register.
The current legislation stipulates the following forms of the legal entities to carry out business activity: the Limited Liability Partnership (LLP), Supplementary Liability Partnership (SLP), Unlimited Partnership (UP), Limited Partnership (LP), Production Co-Operative (PC) or Joint-Stock Company (JSC), Individual Proprietorship (IP).
The main categories of the legal entities:
Limited Liability Partnership is a union of one or several persons (participants) who form the authorized capital divided into shares. The Limited Liability Partnership is liable by its obligations with all property belonging it and it is not liable by obligations of the participants.
Participants of the Supplementary Liability Partnership unlike LLP are liable by their obligations with the contributions into the authorized capital. In case the amount of these contributions are not enough – they are liable by the additional property belonging them at a rate multiple to the amount of contributions made.
The authorized capital of the partnership is formed by consolidation of founders’ contributions the initial size of which is equal to the amount of contributions of founders and it should not be less the amount equivalent to hundred of monthly calculated rate.
The Production Co-operative is the voluntary union of citizen on the membership basis to carry out the mutual business activity based on the individual participation and consolidation of the property shares of the members. The difference of the Production Co-operative from the Partnership are: it has no an Authorized Capital; it should be not less than two founders of the Production Co-operative; and the members of the Co-operative are liable by the Co-operative obligations with the additional (subsidiary) responsibility.
The main feature of the Unlimited partnership is that all its participants bear equal and collective responsibility by its obligations with all property belonging to them.
The Limited Partnership except one ore more participant which are solidary liable for the Partnership obligation includes also one ore more participant the responsibility of which is limited to the sum they contributed into the Authorized capital of the Partnership and they don’t take parting the business activity of the company.
Joint-stock company is a legal entity which issues its shares with a purpose to attract the resources for realization of its business.
When you choose the organizational and legal form of your legal entity it is necessary to register the company and to get the status of the legal entity. For this purpose you apply to the local Department of Justice.
Individual businessmen are the physical person which carry out their economic operations without forming a legal entity and they don’t have attributes of a legal entity.
Individual businessmen are individuals carrying out business activity without setting up a legal entity has no any attributes of a legal entity/ there are two types of individual business: personal proprietorship and joint proprietorship.
Personal proprietorship is carried out by one person independently on the basis of the property belonging him/her on the property right and also under other right allowing the use and (or) disposal of the property.
Joint business (proprietorship) is carried out by a group of citizens (individual businessmen) on the basis of the property belonging them on the right of the common property and also under the right assuming the joint use and/or the disposal of the property. In case of the individual proprietorship based on a private property (private business), it is carried out under the property responsibility.
The individual proprietorship pays less taxes and in most cases with lower rates than a legal entity. The individual proprietorship has to pay payments into cumulative pension funds for himself/herself and hired workers.
The size of tax rates depends on a tax mode the businessman works under. In case the proprietorship realizes his/her business using a patent the income of such businessman is imposed at 3% rate (article 375 of Tax Code of the РК ). In case of using the simplified form of declaration the income is imposed at a rate from 3 up to 7 percent depending on its sum (Article 377 Tax Code of the РК ).
The accountancy of the individual businessman in case of patent use and simplified form of declaration is much easier than the accountancy of a legal entity. In case of patent there is no practically any accountancy. This advantage allows the individual businessman to make accountancy by himself/ herself not employing an accountant. However, there is an opportunity of simplified form of declaration for the legal entities, but in most cases it is necessary to hire an accountant into such company.
After being registered as an individual businessman this person has to pay for a seal and stamps (over 1000 KT). If you are going to open the bank account it is necessary to pay the notary services who will authorize the samples of your signature in a bank card (87 KT for a card, total - 4 cards), and also for opening the account, if in the bank you chose this procedure is payable (in most banks the account opening is free-of-charge now, in some banks up to 3500 KT is payable).
According to the Law of the Republic Kazakhstan " On Limited and Supplementary Liability Companies ” the Limited Liability Company has the firm name which should contain the name of the company and also the words "limited liability company" or an abbreviation "LLP".
The firm name of the Supplementary Liability Company should contain the words "supplementary liability company" or an abbreviation "SLC".
The Limited Liability Company is a commercial organization having the civil rights. The location of the limited liability company is the permanent residence of its constantly working body.
The Limited Liability Company has a right to set up its branches and representations.
The procedure of setting up of the Limited Liability Company begins with the conclusion of the constituent contract by its founders and finishes by the state registration of a company as a legal entity.
The Constituent (Founders’)Contract
The constituent contract of the Limited Liability Company is to be:
The legal entities – the founders of LLP may be represented by its managers which are authorized to act on behalf of the legal entity without any power of attorney. The refusal of signing the contract means the refusal to enter the company. It is not allowed to sign the contract any with any clauses the specific features of the status of some participants of the company should be fixed in the contract signed by all founders. The constituent contract is a subject to be certified by a notary.
The founders who signed the constituent contract after the state registration of company become the participants of company.
The Articles (Charter)
The Articles of the Limited Liability Company is a document defining a legal status of the company as the legal entity. .
At the state registration of the company its Articles are considered as its constituent document. The Articles of the Limited Liability Company should contain:
Copies of the Articles of company and all other documents regarding its further changes are kept in the body which provided the state registration of the company.
The initial size of the authorized capital is equal to the amount of contributions of founders and should not be less than amount equivalent to 100 sizes of a monthly calculation index on the date when the documents were submitted for the state registration of the company. The contribution into the authorized capital of the Limited Liability Company can be made in the form of money, securities, things, property rights, including the right of land tenure and the right for the results of intellectual activity and other property.
The production co-operative is formed by the decision of the General meeting of the founders – the individuals. Members of cooperative society should be not less than two, also a member of cooperative society can be any person over 16 years old who expresses his/her desire to be a member of cooperative society and capable to contribute his/her labour force in the company operation. The infants need to get the consent of their parents, adoptive fathers or trustees to enter into the cooperative society.
The production co-operative has a right to carry out any type of business activity which is not forbidden by legal acts for individual proprietorship. If it is required to get a state license for some types of business the Production co-operative may carry out such business after getting such license.
The constituent contract
The constituent contract of production co-operative is a document of trade secret and is to be submitted into state and other official bodies, and also to the third parties only by the decision of the executive body of cooperative society or in cases established by legal acts. It should be:
The Articles (Charter)
Articles of the Production Co-operative should contain:
In case of claiming for a share the cooperative society allocates a share from the property of the cooperative society, corresponding to the share of the member-debtor. The size of a share is defined according to accountancy data for the date of receipt of the claim of the creditor (creditors).
The share is made by money or in natural form.
Property contribution of members of the cooperative society.
Property contributions of members of the production co-operative form the initial capital and are assigned to organize the cooperative society activity and also to cover the charges. A property contribution into cooperative society may be made by money, securities, things, property rights, including the right of land tenure, the right to results of intellectual property and other property.
The monetary estimation of a property contribution of a member of the cooperative society cannot be made only under the agreement between the founders of the cooperative society and is subject to independent auditor’s checking. Independent auditor’s checking is not made in cases when the property contributions of members of the cooperative society consist only of money. In case the property is transferred by a member of the cooperative society as a contribution into cooperative society only for using the size of contribution is defined on the basis of rental payment for using this property, calculated for the period determined by the agreement of the cooperative society members.
Founders of the joint-stock company are individuals and/or legal entities who made a decision to set up it. The founder of a company may be one person. The JSC is established by the decision of founders meeting. The company may be set up in the result of reorganization of the existing legal entity in the order established by the Law " On Joint-Stock Companies" dated May, 13th, 2003 and other legal acts of the Republic Kazakhstan.
On the first constituent assembly the founders:
Before the stock floatation it is possible to arrange several subsequent meetings of founders. The decisions made on the first constituent assembly might be amended and added only if all parties of the constituent contract participate in the constituent assemblies. On the first constituent assembly of the company each of founders has one vote. On the subsequent constituent assemblies each of founders has one vote if other is not established by the constituent contract. Decisions of the constituent assembly (the sole founder) are indicated in the protocol and are to be signed by all founders (sole founder) of the company.
The constituent contract is to be:
The Articles of Association is a document defining a legal status of the company as of the legal entity.
The Articles of Association should contain:
The size of the advance payment of shares contributed by founders should be no less of the minimal size of the authorized capital of the company and is completely paid by founders within thirty days from the date of the state registration of the company as legal person. The authorized capital of the company may be increased by placing of the declared shares of the company. The minimal size of the authorized capital of the company makes 50 000 of the monthly calculation index established by the Republic of Kazakhstan law on the republican budget for the appropriate fiscal year.
The company has a right to issue ordinary and preferred shares. The shares are issued in the paperless form.
The share is indivisible. If the share belongs to several persons on the right of the common property all of them are recognized as one shareholder and have the rights certified by the share through the common representative.
The following restrictions can be established by the legal acts of the Republic of Kazakhstan:
The company has a right to issue other securities which conditions and order of issue, placing, circulation and paying off are established by the Republic of Kazakhstan law on securities market.
The order of registration of legal entities is regulated by the by the Law of the Republic of Kazakhstan " On state registration of legal entities and registration of branches and representative offices " dated from April, 17th, 1995.
The state registration of legal entities includes:
Accounting registration of branches and representative offices includes:
The bodies of the Ministry of Justice provide (registering bodies) the state registration of legal entities and accounting registration of branches and representative offices.
Below is the list of documents submitted for the state registration and a re-registration of the legal entities.
The following documents must be submitted the registration of the legal entity:
Registration of legal entities with foreign companies participation is provided in the order established for the registration of legal entities of the Republic of Kazakhstan the following documents must be submitted in addition:
For the state registration of a legal entity which was set up in the result of reorganization of one or more legal entities it should be also submitted a transfer deed or division balance sheet, document certifying the written notice of creditors of the reorganized company on such reorganization.
The following documents must be submitted for the re-registration of a legal entity:
Joint-stock Company (JSC)
The state registration (re-registration) of subjects of small business and accounting registration (re-registration) of their branches and representative offices should be made not later than 3 working days from the date of submitting an application with necessary documents attached.
The state registration (re-registration) of other legal entities and accounting registration (re-registration) of their branches and representative offices should be made not later than 10 working days from the date of submitting an application with necessary documents attached.
The state registration (re-registration) of political parties and registration accounting registration (re-registration) of their branches and representative offices should be made not later than 1 month from the date of submitting an application with the necessary documents attached.
After checking the constituent and other documents of legal entities for their conformity the registering body grants the certificate on state registration or the certificate on a re-registration.
The certificate on accounting registration or certificate on accounting re-registration is granted to branches and representative offices.
You can open a bank account only by submitting the certificate on state registration of the legal entity or the certificate on accounting registration of branches and representative offices.
The note :
The granting of the certificate on state registration of a legal entity is not the basis to start the business activity.