Bishkek 

March 27, 2003, # 64 

 

THE LAW OF THE KYRGYZ REPUBLIC 

 

On joint stock companies 

(As amended by the Laws of the Kyrgyz Republic of  

August 13, 2004 #128, December 9, 2004 #189, January 27, 2006 #15,  

July 31, 2006 #145, August 6, 2007 #132, May 23, 2008 #95, June 2, 2008 #110,  

July 28, 2008 #181, January 19, 2009 #7, May 11, 2009 #152, July 24, 2009 #245, October 12, 2009 #264, October 5, 2011 #162, October 5, 2011 #163, April 13, 2012 #39,  

May 29, 2012 #70) 

 

Chapter I. General provisions 

Chapter II. Creation and liquidation of a Company 

Chapter III. Capital of the Company. Shares, bonds and other securities of the Company 

Chapter IV. Dividends of the Company 

Chapter V. Register of shareholders of the Company 

Chapter VI. Management of the Company 

Chapter VII. Purchase and repayment of the placed shares by the Company 

Chapter VIII. Large transactions 

Chapter IX. Interest in fulfillment of the transaction by the Company 

Chapter X. Account and reporting, documents of the Company. Information on the Company 

Chapter XI. Final provisions 

 

Chapter I 

General provisions 

 

Article 1. Sphere of application of this Law 

 

1. This Law determines order of creation and a legal status of joint-stock companies, rights and duties of their shareholders, and also provides protection of rights and interests of shareholders. 

2. This Law shall be extended to all joint-stock companies having been created or being created in the territory of the Kyrgyz Republic, unless otherwise is established by this Law. 

Features of legal relations connected with the transfer of the concession assets of joint-stock companies formed on the basis of strategic objects of distribution companies of electricity in which the government owns at least two-thirds of the shares shall be determined by the concession agreement approved by the Jogorku Kenesh of the Kyrgyz Republic. 

Features of the legal status of the closed joint-stock company “Development Fund of the Kyrgyz Republic” are defined by the Law of the Kyrgyz Republic “On the Development Fund of the Kyrgyz Republic”. 

3. The state body regulating corporate legal relations, following from this Law, is the authorized state body of the Kyrgyz Republic regulating the securities market. 

4. Features of creation of joint stock companies engaged in activities of non-state pension funds, investment fund, banking, insurance activities regulated by this Law to the extent not inconsistent with special laws regulating the activities of these companies. 

(As amended by the Laws of the Kyrgyz Republic of August 13, 2004 #128, December 9, 2004 #189, August 6, 2007 #132, May 23, 2008 #95) 

 

Article 2. Basic concepts used in this Law 

 

In this Law the following basic concepts are used: 

Share - is a security certifying right of its holder (shareholder) to receive part of profit of a joint-stock company as dividends, to participate in administrative management of the joint-stock company and to part of the property remained after its liquidation; 

Shareholder - is an individual or legal entity owning even one share of a company, giving to it a mandatory right to property of joint-stock company and possessing in this connection rights and duties established by this Law and the legislation of the Kyrgyz Republic; 

(fourth paragraph is null and void in accordance with the Law of the Kyrgyz Republic of April 13, 2012 #39) 

Dividends - a part of distributive income (profit) of the joint-stock company, received by a shareholder as an income from shares of this company belonging to it. 

Closed company - a joint-stock company, which shares are placed and circulate only among its participants or other preliminarily established range of persons; 

(seventh paragraph is null and void in accordance with the Law of the Kyrgyz Republic of April 13, 2012 #39) 

Convertible security - is a security, which has been issued by a joint-stock company, which is subject to exchange for a security of other kind of this joint-stock company under conditions established at issuance of the convertible security; 

Cumulative voting - a way of voting, at which the number of votes for each shares participating in voting, is equal to the general number of members of the corporate management of the Company; 

Independent register holder - is a professional participant of the securities market who is carrying out activity on maintenance and deposit of a register of owners of registered securities; 

Open company - is a joint-stock company which shareholders can alienate shares belonging to them without the consent of other shareholders of this company; Repayment of bonds - is repayment by the joint-stock company of bonds earlier issued at a face value or their converting into a share of this joint-stock company according to the legislation of the Kyrgyz Republic; 

Bond redemption - redemption by the joint stock company previously issued bonds at par value or their conversion into shares of the Company in accordance with the legislation of the Kyrgyz Republic; 

(thirteenth paragraph is null and void in accordance with the Law of the Kyrgyz Republic of April 13, 2012 #39) 

Placed shares - shares owned by shareholders; 

Charter capital is capital of the Company at the moment of its establishment the minimal size of which is established by this Law. 

(As amended by the Law of the Kyrgyz Republic of April 13, 2012 #39) 

 

Article 3. Legal status of a joint-stock company 

 

1. A joint-stock company (hereinafter - the Company) is a legal entity engaged in the activity with purpose to receive profit and involving funds by issuance and placement of shares. The company shall be obliged to issue shares which price is expressed in national currency of the Kyrgyz Republic, irrespective of a form of investment made. 

The Company shall have the right to issue other securities in the order established by the legislation of the Kyrgyz Republic. 

The shareholders are not responsible for obligations of the Company and incur the risk of losses connected to its activity, within limits of cost of shares belonging to them. 

The state and its bodies are not responsible for responsibilities of the Company, as well as the Company shall not be responsible for liabilities of the state and its bodies. 

2. The Company shall have a detached property, which is included in its independent balance, and can purchase and realize property and personal non-property rights on its own name, perform duties, to be a claimant and a respondent in court. 

The Company shall bear responsibility for liabilities by all the property belonging to it. 

The Company shall not be responsible for obligations of shareholders. 

3. The company shall have civil rights and duties necessary for realization of any kinds of activity, not prohibited by laws. The company can be engaged in separate kinds of activity the list of which is established by laws, only on the basis of a special license. 

4. A right to pawn shares of the Company cannot be limited or excluded by provisions of the Company's by-law. The shareholder shall have the right of vote on the share pawned by it unless otherwise is stipulated by the pledge agreement. Specifics of pawning of shares of separate types of joint-stock companies shall be regulated by special legal acts. 

5. The Company shall be prohibited to receive shares issued by it as a pledge. 

6. The Company shall be considered as formed as a legal entity from the moment of its state registration in order established by legislation of the Kyrgyz Republic. The Company shall be created without restriction of the term of activity unless otherwise is established by its charter. 

7. The Company shall have the right to open bank accounts in the territory of the Kyrgyz Republic and outside according to the established procedure. 

8. The Company should have a seal with its name in the Kyrgyz and Russian languages. The seal of the Company can also contain its name in any foreign language and language of nations living in the Kyrgyz Republic. Besides the Company's name, the seal of the Company can contain other properties stipulated by the legislation of the Kyrgyz Republic. 

The Company shall have a right to have stamps and forms with its name, own emblem, and also the trademark registered in accordance with established procedure and other means of visual identification. 

9. The Company shall have the right to open branches and representative offices and to create affiliated societies in the order established by the legislation of the Kyrgyz Republic. 

 

Article 4. Name and Location of the Company 

 

1. The Company shall have a unique name, which should contain indication of its organizational and legal form and type (closed or open) and character of its activity. 

The Company shall be obliged to have the full and abbreviated names in the Kyrgyz and Russian languages and have the right to full and abbreviated names in foreign languages and languages of nations living in the Kyrgyz Republic. 

The Company, the unique name of which is registered in the order established by normative legal acts of the Kyrgyz Republic, shall have the exclusive right of its use. 

2. Location of the Company shall be established by a place of its state registration unless otherwise is established by the charter according to other laws. 

3. The Company should have the post address through which communication is carried out with it, and shall be obliged to notify the state body on registration of legal entities, and also bodies which have carried out registration of issue of securities of the Company, about change of the post address. 

 

Article 5. Branches and representative offices of the Company 

 

1. The Company can create branches and open representative offices in the territory of the Kyrgyz Republic in compliance with the requirements of this Law and other laws. 

Besides, branches and representative offices outside the territory of the Kyrgyz Republic shall be created by the Company according to the legislation of the foreign state in the location of branches and representative office unless otherwise is stipulated by the ratified international treaty of the Kyrgyz Republic. 

2. The branch and representative office shall not be legal entities; they shall operate on the basis of the provision approved by the Company. The branch and representative office shall be provided by the Company creating them with the property accounted both on their separate balances and on the balance of the Company. 

Heads of the branch and representative office shall be appointed by the Company and shall operate on the basis of a power of attorney issued by the Company. 

3. The branch and representative office shall be engaged in the activity on behalf of the Company which has created them. The Company which has created the branch and representative office shall bear responsibility for their activity. 

 

Article 6. Affiliated and dependent companies 

 

1. The Company can have affiliated and dependent companies in the territory of the Kyrgyz Republic with a right of a legal entity, created according to this Law and other laws, and outside the territory of the Kyrgyz Republic - according to the legislation of a foreign state where the affiliated or dependent companies are located unless otherwise is stipulated by the international treaty ratified by the Kyrgyz Republic. 

2. The Company shall be recognized as affiliated if the other (main) economic company (association) has an opportunity to consider the decisions adopted by such a company by virtue of prevailing participation in its capital, or according to the agreement concluded by them, or otherwise. 

3. An affiliated company shall not be responsible for liabilities of the main company (association). 

The main company (association) which according to a agreement has a right to give instructions to an affiliated company which would be obligatory for the latter, they are jointly with an affiliated company responsible for transactions made by the latter in the performance of such instructions. 

In case of bankruptcy (inconsistency) of an affiliated company because through the fault of the main company (association) the latter shall be joint responsibility its liabilities. Bankruptcy (inconsistency) of an affiliated company shall be considered as happened through the fault of the main company (association) only in a case when the main company (association) used the specified right and (or) opportunity for the action to be undertaken by an affiliated company, deliberately knowing, that will result in bankruptcy (inconsistency) of an affiliated company. 

Shareholders (participants) of an affiliated company shall have a right to demand compensation from the main company (association) for losses caused to an affiliated company through its fault. Losses shall be considered as caused by the main company (association) only in a case that the main company (association) used a right and (or) an opportunity available to it for undertaking action by an affiliated company, deliberately knowing, that the affiliated company will suffer losses. 

4. The Company shall be recognized dependent if other participating company has more than 20 percent of its voting shares. The Company that has got more than 20 percent of voting shares of the other company shall be obliged to publish data on it immediately in the order determined by the authorized state body of the Kyrgyz Republic, regulating the securities market. 

(As amended by the Law of the Kyrgyz Republic of April 13, 2012 #39) 

 

Article 7. Open and Closed Companies 

 

1. The Company can be open or closed, which is specified in its charter and the Company's name. 

2. Open company shall have a right to make public placement of shares issued by it and to realize its free sale according to requirements of this Law and other normative legal acts of the Kyrgyz Republic. The charter cannot include provisions restricting free sale of shares. 

The number of shareholders of an open company shall not be limited. 

In case of transformation of the closed joint-stock company to an open company, limiting a statute, effective at a closed company shall not be valid in the open joint-stock company. 

3. Closed company shall have no right to make public placement of the issued shares, or otherwise to offer them for sale to unlimited range of persons. 

The number of shareholders of a closed company should not exceed fifty. 

In case the number of shareholders of a closed company exceeds the limits established by this article, the specified company should be transformed into the open one within one year. If the number of its shareholders decreases, the Company shall be subject to liquidation in the judicial order. 

4. Shareholders of a closed joint-stock company shall have the preemptive right to purchase shares sold by other shareholders of this company. 

If any shareholders does not take advantage of the preemptive right within five days from the date of the notice or in other term stipulated by the charter of the Company, or agreement is not reached on its price the joint-stock company shall have the right to buy these shares itself at the price coordinated with its proprietor. In case if the joint-stock company refuses to purchase shares or failure to reach agreement on the price the shares may be offered to any third party. The price of the offer to the third party cannot be lower than the offer to shareholders and the Company. Otherwise the transaction can be recognized as void. 

5. When the closed joint stock company's shares are pledged and subsequently the pawnbroker imposes penalties rules of paragraph 4 of this Article shall accordingly apply. However, the pawnbroker shall have the keep the shares instead of alienating them to the third party. 

6. Shares of a closed company shall be transferred to successors of an individual or assignees of a legal entity who is a shareholder according to the legislation of the Kyrgyz Republic. 

7. The companies, which founders are the authorized bodies of the Kyrgyz Republic in cases established by laws, can be only open. 

 

Chapter II 

Creation and liquidation of the company 

 

Article 8. Creation of the company 

 

The Company can be created by establishment or reorganization of the existing legal entity (merge, division, allocation or transformation). 

The Company shall be considered as created and is a legal entity from the moment of its state registration according to the legislation of the Kyrgyz Republic. At establishment of a joint-stock company all its shares should be distributed among founders. The constituent share issue of the Company should be registered in the authorized state body of the Kyrgyz Republic regulating the securities market according to order established by legislation. 

 

Article 9. Establishment of the company 

 

1. Formation of the company by establishment is carried out at the decision of founders (founder). 

Founders of the company conclude among themselves a notary-certified written constituent agreement on its creation, establishing the procedure implementation of joint activity by them on establishment of the Company, size of the capital of the Company, category and types of shares subject to placement among founders, size and order of their payment, rights, obligations and responsibility of founders on creation of the Company. In case of establishment of the Company by one person the decision on its establishment shall be adopted by this person individually. 

2. At the constituent assembly the founders shall approve the charter, management bodies are elected. The constituent agreement on creation of the Company shall come into effect from the moment of its signing and operates till the moment of registration of results of constituent release of shares with the authorized state body of the Kyrgyz Republic regulating the securities market. 

 

Article 10. Founders of the Company 

 

1. Founders of the Company are individuals and (or) legal entities which have adopted a decision on its establishment. 

The Government and local authorities can establish, or to act as co-founders of the company or acquire shares and to be shareholders of the company.  

2. The number of founders of an open company shall not be limited. The number of founders of a closed company cannot exceed fifty. 

3. Founders of the Company shall have joint responsibility for liabilities related to its creation and arising before the state registration of the given company. 

(As amended by the Law of the Kyrgyz Republic of May 11, 2009 #152) 

 

Article 11. Charter of the Company 

 

1. The charter of the Company is the constituent document of the Company. Provisions of the charter should comply with the legislation of the Kyrgyz Republic. 

2. Requirements of the charter of the Company are obligatory for execution by all bodies of the Company and its shareholders. 

3. The charter of the Company should contain the following data: 

- full and abbreviated unique names of the Company; 

- location of the Company; 

- type of the Company (open or closed); 

- amount, categories (ordinary, preference) of shares placed by the Company; 

- rights of shareholders - owners of shares of each category; 

- size of the charter capital of the Company; 

- structure and competence of the management bodies of the Company and the order of adoption of decisions by them; 

- order of preparation and holding of the general meeting of shareholders. 

The charter of the Company may contain other provisions which do not contradict the legislation of the Kyrgyz Republic. 

4. The charter of the Company shall be modified and supplemented or the charter of the Company shall be approved at the decision of general meeting of shareholders. Adopted by the general meeting of shareholders the decisions on modification in the charter of the Company should not contradict the legislation of the Kyrgyz Republic. 

The charter of the Company cannot establish the provisions worsening the rights of shareholders. 

5. Any person shall have the right to get familiarized with the charter of the Company. The Company shall be obliged to give it an opportunity to get familiarized with the charter and to provide it with a copy of the existing charter of the Company for payment, which should not exceed expenses for its production. 

(As amended by the Law of the Kyrgyz Republic of October 12, 2009 #264) 

 

Article 12. Reorganization of the Company 

 

1. The Company can be reorganized voluntarily in the order stipulated by this Law, or at the decision of court in the order stipulated by the legislation of the Kyrgyz Republic. 

2. The Company can be reorganized in the form of consolidation, joining, division, detachment and transformation. 

At division (detachment) the organizational - legal form of all assignees of a reorganized company should coincide with its organizational - legal form, which existed before decision-making on reorganization. 

The transformed company can have the form of the Company with limited liability and (or) a cooperative company created in the form of a commercial organization. 

3. The company shall be considered as reorganized, except for cases of reorganization in the form of joining, from the moment of the state registration of newly created legal entities. 

At reorganization of the Company by joining to another company the first of them shall be considered as reorganized from moment when the state registration body makes a record of termination of the activity of the joined company in the common state register of legal entities. 

4. The state registration of companies newly arising as a result of reorganization and entering of record about termination of activity of the reorganized companies shall be implemented in the order established by the legislation of the Kyrgyz Republic. 

5. Reorganization of the Company shall be made no earlier than two-month period after publication of the information thereon in an official press. Creditors shall have the right within two months from the moment of publication of the information on reorganization of the Company to put a demand to the Company to terminate its activity and to execute corresponding liabilities, and the Company shall be obliged to meet their demands. 

6. The Company shall not be subject to reorganization if it results in decrease of the charter capital of the reorganized company, established by this Law and other normative legal acts of the Kyrgyz Republic. 

7. At reorganization of the Company no exchange of its ordinary and preference shares convertible into ordinary ones according to the prospectus of their issue, for property or other property rights shall be allowed. 

8. The agreement on the consolidation and the transfer act at consolidation, the minutes of the meeting in which the decision on division or detachment is made, and the dividing balance at division and detachment shall be the documents replacing the constituent agreement of the newly arising facilities. 

 

Article 13. Consolidation of companies 

 

1. An action, as a result of which a new company occurs by means of transfer of all rights and duties of two or several companies to it with termination of activity of the latter, shall be recognized as consolidation. 

Consolidation of the companies shall be carried by joining up of their property and consolidation of their balances with subsequent replacement of shares of companies involved in consolidation, shares of the newly created company. 

2. Companies participating in the consolidation conclude an agreement on consolidation, which will establish the following: 

- order and conditions of consolidation; 

- order of conversion of shares of each company into the share and (or) other securities of a new company. 

The Board of Directors or executive body (if the Company implements the activity without formation of the Board of Directors) of each company participating in consolidation shall submit an issue of reorganization in the form of consolidation and approval of the agreement on consolidation and the transfer act to the general meeting for discussion. 

3. The charter shall be approved and elections for the newly arising company shall be held at the joint general meeting of shareholders of the Company, participating in consolidation. The voting procedure at the joint general meeting of shareholders shall be determined by the agreement on consolidation of companies. 

4. At consolidation of companies all rights and duties of each of them are transferred to a newly formed company according to the transfer act. 

5. The joint-stock company shall have the right to carry out consolidation with the Company with limited liability and (or) the cooperative company created in the form of a commercial organization unless otherwise is established by the legislation. In case of consolidation of the joint-stock company with the Company with limited liability and(or) a cooperative company, created in the form of the commercial organization, the Company formed as a result of such consolidation may be only a joint stock company. 

 

Article 14. Merge of the Company 

 

1. Action as a result of which there is termination of activity of one or several companies with transfer of all their rights and liabilities to other company shall be considered as merge. 

Companies shall be merged by unification of their property and consolidation of their balances with subsequent replacement of shares of the companies involved in the merge, shares of the Company, which continues to exist. 

2. A joined company and the Company, to which it is attached, shall conclude the agreement on joining in which the following are established: 

- order and conditions of joining; 

- order of conversion of shares of the joined company into the share and(or) other securities of the Company, to which the Company is merged. 

The Board of Directors or an executive body (if the Company implements the activity without formation of the Board of Directors) each company submits an issue of reorganization in the form of merge and on approval of the agreement on the merge to the general meeting of shareholders of the Company for discussion. The Board of Directors or an executive body if the Company implements the activity without formation of the Board of Directors) attached company also submits an issue of approval of the transfer act for consideration by the general meeting of shareholders. 

3. At merging of one company to another to the later takes over all rights and duties of a merged company according to the transfer act. 

4. A company with limited liabilities and (or) a cooperative company created in the form of a commercial organization unless otherwise is stipulated by the legislation of the Kyrgyz Republic. 

A joint-stock company has no right to merge to an economic company or the Company with organizational - legal form other, than a joint-stock company. 

 

Article 15. Division of the Company 

 

1. Action as a result of which there is termination of activity of the Company to transfer all of its rights and duties to newly created companies shall be considered as division of the Company. 

2. The Board of Directors or an executive body of a reorganized company (if the Company carries out activity without formation of the Board of Directors) shall submit the following items for consideration of the general meeting of shareholders: 

- about reorganization of the Company in the form of division; 

- about the order and conditions of reorganization; 

- about creation of new companies and the order of conversion of shares of a reorganized company into shares and(or) other securities of newly formed companies. 

3. At reorganization of the Company by division the capital of the newly created companies shall be distributed among shareholders proportionally to their shares available in the reorganized company. 

4. The general meeting of shareholders of a reorganized company makes a decision on reorganization of the Company in the form of division, creation of new companies and the order of conversion of shares of the reorganized company into the shares and(or) other securities of newly formed companies. 

The general meeting of shareholders of each newly created company makes a decision on approval of its charter and election of the management. 

 

Article 16. Detachment of the Company 

 

1. Detachment of the Company shall be an action as a result of which there is a creation of one or several companies with transfer of part of the rights and liabilities of a reorganized company according to the dividing balance without termination of the activity of the latter. 

2. The Board of Directors or an executive body (if the Company carries out activity without formation of the Board of Directors) of the reorganized company shall submit the following items to the general meeting of shareholders for consideration: 

- reorganization of the Company in the form of detachment; 

- order and conditions of detachment; 

- creation of a new company and the order of conversion of shares of the Company into shares and (or) other securities of the detached company; 

- approval of the dividing balance. 

3. At reorganization of the Company by means of detachment of shareholders of the reorganized company purchases shares of the capital in the detached companies proportionally to their shares available in the capital of the reorganized company. 

 

Article 17. Reformation of the Company 

 

1. The company shall have the right to be reformed to the Company with limited liability or into a cooperative company created in the form of a commercial organization with observance of the requirements established by the legislation of the Kyrgyz Republic. 

2. The Board of Directors or an executive body (if the Company implements the activity without formation of the Board of Directors) of the reformed company shall adopt a decision of the general meeting of shareholders on reformation of the Company, order and conditions of reformation, order of exchange of shares of the Company for deposits of participants of the Company with limited liability or shares of members of a cooperative company created in the form of a commercial organization. 

3. The general meeting of shareholders of the reformed company shall make decision on reformation of the Company, the order and conditions of reformation, the order of an exchange of shares of the Company for deposits of participants of the Company with limited liability or share of members of cooperative company created in the form of the commercial organization. Participants of the new legal entity created at reformation shall make a decision on approval of its constituent documents and election of the management board according to requirements of laws of the Kyrgyz Republic on these organizations. 

4. At reformation of the Company the newly created legal entity shall take over all rights and liabilities of the reformed company according to the transfer act. 

 

Article 18. Liquidation of the Company 

 

1. The Company can be liquidated on the voluntary basis in the order established by the legislation of the Kyrgyz Republic, in view of requirements of this Law and the charter of the Company. 

The Company can be liquidated at the decision of court on the bases stipulated by the legislation of the Kyrgyz Republic. 

Liquidation of the Company entails termination of its activity without transition of the rights and liabilities by way of assignment to other persons. 

The order of liquidation, and also the order of sequence of payments to creditors are carried out by the Company according to the Civil Code of the Kyrgyz Republic and the legislation on bankruptcy. 

2. In case of voluntary liquidation of a solvent company the Board of Directors or an executive body (if the Company implements the activity without formation of the Board of Directors) of the liquidated company shall submit the issue of liquidation of the Company and formation of the liquidation commission (a liquidator) to the general meeting of shareholders for discussion. 

General meeting of shareholders of the voluntarily liquidated company shall make a decision on liquidation of the Company and assignment of the liquidation commission (a liquidator). 

3. From the moment of assignment of the liquidation commission (a liquidator) it shall take over all powers of administration of the Company. The liquidation commission (a liquidator) shall act in court on behalf of the liquidation company. 

(As amended by the Law of the Kyrgyz Republic of October 12, 2009 #264) 

 

Article 19. Distribution of property of the Company liquidated in the voluntary order between shareholders 

 

1. The property of the liquidated company remaining after settlement with creditors of the Company shall be distributed by the liquidation commission between shareholders in the following sequence: 

First of all the liquidation cost on preference shares shall be estimated; 

Secondly, property of the liquidated company shall be distributed among shareholders - owners of ordinary shares. 

2. Distribution of property of each shift shall be carried out after full distribution of property of the previous shift. If there is not enough property available at the Company for distribution among shareholders of one shift the property shall distributed among shareholders of this shift proportionally to the amount of shares owned by them. 

3. In case of stage-by-stage receipt of funds as a result of sale of property their distribution to shareholders of a certain shift shall be made proportionally to the amount of shares owned by them. 

(As amended by the Law of the Kyrgyz Republic of October 12, 2009 #264) 

 

Article 20. Completion of liquidation of the Company 

 

Liquidation of the Company shall be considered completed, and the Company shall be considered cancelled from the moment when certain record is made in the registration body of a relevant order. 

(As amended by the Law of the Kyrgyz Republic of October 12, 2009 #264) 

 

Chapter III 

Capital of the Company. 

Shares, bonds and other securities of the Company 

 

Article 21. Capital of the Company 

 

Capital of the Company is made assets of the Company less its liabilities. 

The charter capital should be completely paid at the moment of establishment of the Company and there cannot be less than one thousand minimal monthly salaries. 

(As amended by the Law of the Kyrgyz Republic of January 27, 2006 #15) 

 

Article 22. Shares of the Company 

 

1. Shares issued by the Company can be ordinary and preference. Amount of the placed preference shares should not exceed 25 percent of the number of all shares of the Company. 

2. All shares of the Company shall be nominal and shall be issued in the paperless form. 

3. The Company shall be obliged no later than one month from the moment of its state registration as a legal entity to make registration of a constituent share issue in the authorized state body of the Kyrgyz Republic, regulating the securities market. 

4. The Company shall issue additional shares after registration of results of placement of the previous release of shares. 

The share shall be placed in the order established by the decision to issue securities. 

5. If in joint stock companies formed in process of denationalization and privatization the allocation of shares transferred to the company for further distribution among labor staff of the company has not been carried out properly the authorized state body of the Kyrgyz Republic on privatization shall return these shares to the state for repeated re-distribution within 1 month from the moment of identification of such violation. 

 

Article 23. Increase of the number of outstanding shares 

 

1. The Company shall have a right at decision of the general meeting of shareholders to increase the number of outstanding shares by issue of additional shares or breaking of the placed shares into pieces. 

2. By the decision to increase the number of outstanding shares of the Company, terms and conditions of their placement, including the order of placement and the order of establishment of the price of additional shares of the Company for the shareholders which has the preemptive right to purchase the placed shares according to the charter of the Company, shall be established. 

3. Joint-stock companies created as a result of privatization and denationalization in case of additional issue shall be obliged to re-register the charter capital of the Company in favor of increase in case of occurrence of a positive difference of the balance cost of fixed assets included in the charter capital of a constituent share issue for the sum of after-estimation of balance cost with simultaneous increase of a share of owners of shares of constituent release for their regenerative cost. Joint - stock companies, which have registered additional issue, shall be obliged within 1 year after enforcement of the given Law, to make after estimation of the balance cost with simultaneous increase in a share of owners of shares of constituent release for their regenerative cost. 

The shareholders owning shares of the subsequent issues shall have the right within one year from the moment of registration of increase the charter capital to make additional investments to bring its share to the position corresponding to the structure of the Company up to the given increase of the charter capital. 

The increase of the charter capital in connection with reassessment of fixed assets shall be made by increase in a nominal value of shares for a total cost of increase in the charter capital. 

Otherwise shares of the shareholders owning shares of the subsequent issues shall be subject to recalculation in conformity with really paid part of the charter capital. 

Thus, the quorum and calculation of votes on general meetings of shareholders shall be accounted on actually paid shares. 

 

Article 24. Reduction of the number of outstanding shares of the Company 

 

1. The Company shall have the right at decision of the general meeting of shareholders to reduce the number of paid shares by purchase of part of shares or by their consolidation by the Company. 

2. The Company shall have the right to purchase shares in the secondary market for maintenance of their liquidity for the term of no more than one year. The shares purchased by the Company for the specified purpose, shall have no vote at the general meeting of shareholders. 

The Company shall be obliged to place the purchased shares for the term not exceeding one year otherwise it will be obliged to cancel them. 

3. Reducing the number of shares outstanding by means of their redemption or cancellation is allowed only after notifying all of its creditors. In this case, the creditors of the company have the right to demand early performance of the obligations of the company. 

4. For separate kinds of companies the legislation of the Kyrgyz Republic can stipulate other order of reduction of amount of outstanding shares. 

 

Article 25. Rights of shareholders - owners of ordinary shares of the Company 

 

1. Each ordinary share of the Company shall give the shareholder, its owner, equal number of rights: 

2. A shareholder shall have the following property rights: 

a) to receive part of the revenues (dividends) from activity of the Company; 

b) to receive part of the Company's property in case of its liquidation; 

c) to bequeath all shares or part of them to their citizens, legal entities, the state or local self-government bodies; 

d) to sell or otherwise transfer shares or their part to the property of other citizens or to legal entities in view of characteristics established by article 7 of this Law for closed joint-stock companies; 

e) to transfer shares or part of them to pledge or to trust management to other citizens or legal entities. 

f) according to the charter of the Company to get shares issued by joint-stock company in the primary order. 

3. A shareholder has the following non-property rights: 

a) to participate in an administrative office of joint-stock company in the order established by this Law and according to the charter of the Company; 

b) to participate in meetings of shareholders with the right to vote; 

c) to submit proposals on the agenda of the general meeting of shareholders; 

d) to defend in court its right, to sue the officials of the company, as well as to individuals who are interested in the transaction, in accordance with article 75 of this Law, provided that the property rights of the shareholder are violated and its property damage; 

e) to challenge the decisions taken by the company within one year of the issuance of such a decision, provided that the decision of the shareholder property rights have been violated and it suffered from the property damage; 

f) to challenge in the judicial proceeding the validity of issue within 2 months from the moment of state registration of the issue of shares by the authorized state body of the Kyrgyz Republic regulating the securities market, issue of shares, provided that its real rights to participate in this issue have been violated, and it by this emission suffered from the property damage;; 

g) to receive the information on activity of the Company in the order stipulated by this Law and the charter of the Company. 

h) to apply to the court to protect the interests of shareholders and the company itself for transactions in which there is an interest of persons referred to in article 75 of this Law, provided that the property rights of the shareholder are violated and it suffered from the property damage. 

4. According to the legislation of the Kyrgyz Republic and the charter of the Company the shareholder can have both other property and non-property rights. 

5. The right of a shareholder to participate in the meeting of shareholders and vote by its shares on any matter at its sole discretion may not be restricted by any persons, state authorities or the court. 

6. The proper restoration of violated rights of a shareholder is full compensation for damage of property damage caused by the action (or inaction), the decision of the company. 

(As amended by the Laws of the Kyrgyz Republic of August 13, 2004 #128, June 2, 2008 #110, July 24, 2009 #245, May 29, 2012 #70) 

 

Article 26. Rights of shareholders - owners of preference shares of the Company 

 

1. Shareholders - owners of preference shares of the Company have no vote on the general meeting of shareholders if this Law or the charter of the Company does not establish otherwise. Preference shares give the shareholders, their owners, equal rights. 

2. In the decision to issue preference shares the size of the dividend and the order of definition of the cost paid at liquidation of the Company (liquidation cost) on the preference shares should be established. The size of the dividends and liquidation cost shall be fixed amounts. The size of the dividends and liquidation cost on preference shares shall be considered as established if the charter of the Company establishes the order of their establishment. 

The charter of the Company can establish that unpaid or partially paid dividends on preference shares shall be accumulated and paid subsequently (preference shares). 

The charter of the Company can also determine an opportunity and conditions of conversion of preference shares into ordinary shares. 

3. Shareholders - owners of preference shares participate in general meeting of shareholders with a vote at the decision of questions on reorganization and liquidation of the Company. 

Shareholders - owners of preference shares purchase a vote at the decision making process at the general meeting of shareholders on issues of modification and additions in the charter of the Company, limiting the rights of shareholders, owners of preference shares, including cases of reduction of the size of the dividend and (or) reduction of the liquidation cost, paid on preference shares. 

4. Shareholders - owners of preference shares purchase a vote on the general meeting of shareholders on all issues under its competence, since the meeting following the annual general meeting of shareholders on which the decision on payment of dividends is not adopted or the decision is made to make partial payment of dividends on preference shares. The right of shareholders - owners of preference shares to participate in the general meeting of shareholders shall stop from the moment of payment of all accumulated dividends on the specified shares in the full size. 

5. A shareholder - an owner of preference shares shall have the rights established in subparagraphs besides the listed rights: c, d, e, f of paragraph 2, subparagraphs a, d, e, f of paragraph 3 of article 25 of this Law. 

 

Article 27. Bonds and other securities of the Company 

 

1. According to the charter the Company shall have the right to issue bonds and other securities stipulated by the legislation of the Kyrgyz Republic on securities. 

2. The Company shall issue bonds and other securities at the decision of the general meeting of shareholders of the Company. 

3. The decision on issue of bonds should establish the volume of issue, the order of placement, terms and other conditions of repayment. Bonds can be issued in the documentary or paperless form. 

The Company can issue bonds with a single time term of repayment or the bond with term of repayment by series within the established terms. 

The bonds can be repaid in the monetary form or other property according to the decision on their release. 

Issue of bonds by the Company shall be allowed for the amount not exceeding the size of own capital. 

The Company shall have the right to cause an opportunity of prescheduled repayment of bonds at the request of their owners. Thus in the decision on issue of bonds cost of repayment and term should be determined, not earlier which they can be stated to prescheduled repayment. 

A joint-stock company may issue bonds in an amount not exceeding the amount of equity capital, after placement the previous issue of shares and not earlier than the third year of its existence, when properly approved by that time two annual balance sheets. 

A joint-stock company may issue bonds with collateral of the security provided by the company itself or provided to the Company for such purposes by third parties, after placement the previous issue of shares. In this case, the requirements of this paragraph, sixth paragraph to the amount of capital of the company and the date of its existence, do not apply in the case of public limited company issues bonds with security. 

The procedure, conditions of issue, placement and repayment of secured bonds are determined by the legislation of the Kyrgyz Republic. 

(As amended by the Laws of the Kyrgyz Republic of August 13, 2004 #128), January 19, 2009 #7, April 13, 2012 #39) 

 

Article 28. Payment of shares and other securities of the Company 

 

1. The additional share issue of the Company should be paid within the term established according to the decision on its issue, but no later than one year from the moment of its placement. The Company shall have no right to issue additional shares before registration of results of the previous share issue. 

The Company shall have the right to begin placement of shares issued by it only after registration of their issue. Funds received during the sale of publicly offered securities (excluding bonds) are held in a bank account of a broker that underwriting services, or custodian of the broker to the recognition of a public offering of securities by the authorized state body for regulation of the securities market or held invalid. The Company before the end of the subscription period and the registration of the report on the issue of shares in accordance with the legislation of the Kyrgyz Republic with the securities is prohibited the use of funds received in the course of their deployment. 

The amount of placed shares and the securities convertible in the share should not exceed the amount specified in constituent documents and the decision on issue of securities. 

2. Payment of shares and other securities of the Company can be performed in money, securities, other things or property rights or other rights having monetary valuation. The form of payment of shares of the Company at its foundation shall be established by the constituent agreement or the charter of the Company, as well as additional shares and other securities - by decision to issues securities.  

Only money resources can be used for payment for shares of additional issue which placement is accompanied by their public offer. 

No return of funds received from placement of shares of completed issue to the shareholder shall be allowed, except for by repayment of shares, in the order established by the present Law. 

3. Payment of additional shares issues and securities convertible into shares of the Company shall be performed at the price of placement, established by the Board of Directors of the Company on the basis of the market cost at the moment of the beginning of placement. 

The Company shall have the right to place shares at the price below their prices of placement in the following cases: 

- realization by owners of simple shares of the Company of the preemptive right of purchase - at the price which cannot be lower than 90 percent from the price of placement of ordinary shares; 

- placement of additional shares with participation of the underwriter at the price which cannot be lower than their price of placement more than a rate of reward of the underwriter, established in percentage proportion to the price of placement of such shares. 

4. Open company shall have the right to carry out both public and closed placement of additional share issues and the securities of the Company convertible in the shares. 

Closed company shall have no right to carry out public placement of shares and the securities of the Company convertible in the shares. 

Additional share issues by means of conversion of securities convertible into the shares shall be placed in the order established by the decision to issue such securities, convertible into the shares. 

5. The monetary assessment of the property brought as payment for shares in foundation of the Company, is made under agreement between the founders. Its founders make payments for shares of the Company at the price established by the constituent agreement. 

If the cost of shares of the Company purchased in such a way makes more than two hundred minimal monthly salaries established by the legislation of the Kyrgyz Republic the monetary assessment by the independent appraiser of the property brought in payment for shares and other securities of the Company shall be necessary. The charter of the Company may contain restrictions on kinds of property by which shares can be paid. 

6. In a case if the Company has not placed the issued shares within the terms established by paragraph 1 of this article, at the next general meeting of shareholders the decision should be made to reduce the number of outstanding shares of the Company. 

(As amended by the Laws of the Kyrgyz Republic of August 13, 2004 #128, January 27, 2006 #15, April 15, 2012 #39) 

 

Article 29. Assurance of rights of shareholders to placement of shares and securities of the Company convertible into shares 

 

1. In case of public placement by the Company of shares and the securities convertible in the shares, the charter of the Company can stipulate, that shareholders - owners of shares of the Company shall have the preemptive right to purchase these securities in the amount proportional to the number of the Company's shares belonging to them. 

The preemptive right of purchase of shares and securities convertible into shares, additional issue, belongs to the shareholders which have purchased the shares not later than 40 days prior to the date of their placement. 

Not less than 20 days prior to a date of beginning of placement of shares by the Company and the securities convertible into the shares, registered letters should be sent to the shareholders having the preemptive right of their purchase, and also the information should be published in press. The message directed by the registered letter and published in press, should contain the following: 

- name of a joint-stock company; 

- date of placement of the additional share issue or the securities convertible into shares; 

- number and the price of placement of shares or securities convertible into the shares, which the shareholder shall have the right to purchase; 

- order of their purchase; 

- date of expiration of the preemptive right to purchase the placed additional shares or the securities convertible in the shares. 

2. A shareholder shall have the right to fully or partially realize its preemptive right by submitting a written statement about purchase of shares and the securities convertible into shares to the Company. Such statement should contain the following: 

- name and residence (location) of a shareholder; 

- number of securities purchased by it; 

- the document certifying payment for securities. 

The specified statement should be directed to the Company no later than the date, preceding the date of expiration of the preemptive right to purchase the placed additional shares and securities convertible into shares. 

In case if the Company carries out public placement of shares and the securities convertible into shares, a shareholder shall have the right to concede its preemptive right to purchase shares and securities convertible into shares to any person. 

3. The decision not to use the preemptive right to purchase shares and securities convertible into shares, in case of their public placement, and also on validity of such decision shall be adopted by the general meeting of shareholders. 

The decision not to use the preemptive right to purchase shares and securities that have been issued by the Company shall be valid during the term established by the decision of general meeting of shareholders, but no more than one year from the moment of adoption of such decision. 

 

Article 30. Funds of the Company 

 

The Company shall have the right to create funds. The applicability, the order of formation and the sizes of created funds shall be established by the charter of the Company or the decision of the general meeting of shareholders. Funds of the Company shall be created only from the net profit of the Company. 

 

Chapter IV 

Dividends of the Company 

 

Article 31. The order of payment of dividends by the Company 

 

1. The Company shall have the right to make a decision once a year (to declare) payment of dividends on the placed shares from the profit that left at the Company's disposal. 

Dividends are paid in cash or other assets with the written consent of a shareholder. Dividends are paid from profit after tax (net profit). Dividends on preferred shares may be paid by the previously formed for these purpose special funds of a joint-stock company. 

The payment of dividends a joint-stock company must allocate at least 25 percent of the net profit for the activities for the year remains at the disposal of the company. 

2. The joint stock company has the right for the financial year to make a decision (declare) dividends on the outstanding shares within three months after the end of the relevant period. 

The payment of dividends, the dividend rate and a possible form of payment is accepted by the general meeting of shareholders. Payment of dividends in the form of cash payments is made in cash or via bank transfer in writing by the shareholder. The amount of dividends cannot exceed the amount recommended by the Board of Directors, or the Board - in the absence of the Board of Directors. 

The Board of Directors before being passed on to the general meeting of shareholders of the issue of the amount of funds allocated to dividends is obliged to consider the likelihood of the company signs of bankruptcy in the case of dividend payments. 

The decision to pay a dividend shall contain information on: 

1) size and form of payment of dividends; 

2) place and date of actual payment of dividends, with the announcement that comes a responsibility of company to the shareholders for non-payment of dividends; 

3) final date of registration of shareholders entitled to receive dividends. 

The decision to pay dividends a joint-stock company shall publish in the mass media. 

3. Time and order the payment of dividends are determined by the charter or by the general meeting of shareholders. Term of dividend payment should not exceed 120 days from the date of the decision to pay dividends. 

Dividends are eligible persons who acquired shares of the Company not later than 30 days before the official announcement of the date of payment of dividends on them. Dividends are not paid on shares that have not been put into circulation, or on the balance of the company. 

For payment of dividends the list of the persons having the right to receive the dividend shall be made. For the list of nominee shareholder provides information on the persons on whose behalf it holds shares. 

4. A joint-stock company is obliged to pay the due date declared on the shares of each category (type) dividends. In the case of non-payment of declared dividends a shareholder is entitled to demand payment of dividends and interest thereon from the company in court, regardless of the length of the indebtedness due to the fault of a joint-stock company. 

If a joint-stock company fails to pay shareholder dividends owed ​​to it after the due date of payment, the amount due to it on the dividend shall bear interest at the discount rate of the National Bank of the Kyrgyz Republic. 

5. Officials of the company who have not paid or have violated the terms and procedure for the payment of dividends shall be liable in accordance with the legislation of the Kyrgyz Republic. 

(As amended by the Laws of the Kyrgyz Republic of July 31, 2006 #145, October 5, 2011 #163) 

 

Article 32. Restrictions on payment of dividends 

 

1. The company shall have no right to make a decision on payment (announcement) of dividends on shares if at the moment of payment of dividends it has the attributes of bankruptcy (inconsistency) according to normative legal acts of the Kyrgyz Republic on bankruptcy (inconsistency) or if the specified attributes appear at the Company as a result of payment of dividends. 

For separate kinds of companies the legislation of the Kyrgyz Republic may set forth other restrictions on payment of dividends. 

2. The company shall have no right to make a decision on payment (announcement) of dividends under on simple shares if no the decision on payment of dividends on preference shares is adopted. 

 

 

 

 

Chapter V 

Register of shareholders of the Company 

 

Article 33. Register of shareholders of the Company 

 

Register of shareholders of the Company contains the following data: 

- on the number and categories (types) of outstanding shares issued by the Company; 

- on each registered person with indication, whether it is the proprietor or the nominal holder of shares; 

- on each registered share, time of purchase of the share, number of such shares at each of shareholders with indication of their properties (site and the settlement account for shareholders-legal entities, passport data and residence for shareholders-individuals); 

- on properties of persons who according to the information provided by the Company or an independent register holder to data possess the mortgaging rights to shares, should also be brought in the register of shareholders with indication of, whether the pawnbroker has the right to vote on such shares or not, on other bases of purchase of the rights to shares and on the facts of burdening shares with pledge commitments; on splitting and consolidation of shares; about payment of incomes on securities. 

2. The Company shall be obliged to provide maintenance and deposit of the register of shareholders of the Company according to normative legal acts of the Kyrgyz Republic not later than one month from the moment of registration of a constituent share issue of the Company in the authorized state body of the Kyrgyz Republic, regulating the securities market. 

3. The register of shareholders of the company may be the registrar, which carries out its activities to keep the register on the basis of a relevant license and an agreement with the company.  

In an open joint stock company by the Registrar of the shareholders shall be determined an independent registrar of company that meets the requirements of the legislation on the securities market. 

4. (Null and void in accordance with the Law of the Kyrgyz Republic of July 24, 2009 #245) 

5. The person registered in the register of shareholders of the Company, shall be obliged to inform in due time the holder of the register of shareholders of the Company of the change of the data. In case the information of the date changes is not provided the Company and the independent register holder shall not bear responsibility for losses caused in these connection. 

6. The person having purchased the shares of the Company shall receive all property and non-property rights on them from the moment of making records into the register of shareholders. 

7. The content of the register of shareholders and individual personal accounts shall be a commercial secret subject to disclosure or transfer to the third parties only with the consent of the Company or the consent of the shareholder, except for the cases established by the legislation of the Kyrgyz Republic. 

8. The Company shall be obliged to keep primary registration documents of the register of shareholders, the minutes of the meetings during the terms established by the authorized state body of the Kyrgyz Republic regulating the securities market, but not less than 5 years with subsequent transfer to the state archive. 

(As amended by the Laws of the Kyrgyz Republic of August 13, 2004 #128, July 24, 2009 #245, April 13, 2012 #39) 

 

Article 34. Entering records into the register of shareholders of the Company 

 

1. Entering records into the register of shareholders of the Company shall be carried out at the demand of the shareholder or the nominal holder of shares no later than three days from the moment of submission of documents stipulated by the normative legal acts of the Kyrgyz Republic. 

2. No refusal of entering record in the register of shareholders of the Company shall be allowed, except for cases stipulated by normative legal acts of the Kyrgyz Republic. In refusal to enter records into the register of shareholders of the Company the holder of the specified register shall send a motivated notice on refusal to enter the data to the persons demanding entering of record no later than five days from the moment of submission of the requirement about entering records into the register of shareholders of the Company. 

Refusal to enter records in the register of shareholders of the Company can be appealed in court. At the decision of court the holder of the register of shareholders of the Company shall be obliged to make the corresponding record to the specified register. 

3. Entry in the register of shareholders of a joint-stock company for compensation related to the disposal of shares shall be made solely on the basis of relevant documents of the Stock Exchange and / or the depositary, testifying to the fact that the deal to sell shares is carried out on the stock exchange. 

(As amended by the Law of the Kyrgyz Republic of July 24, 2009 #245) 

 

Article 35. Extract from the register of shareholders of the Company 

 

At the demand of the shareholder or the nominal holder of shares the independent register holder of the Company shall be obliged to confirm its rights to shares by issue of an extract from the register of shareholders of the Company that is not a valuable paper and confirms the right of the shareholder to dispose shares at the moment of its issue. 

 

Chapter VI 

Management of the Company 

 

Article 36. Management bodies of the Company 

 

1. The following are management bodies of the Company: 

1) General meeting of shareholders - the supreme management body; 

2) Board of Directors - management body of a joint-stock company, which carries out general management of the Company in the periods between general meetings of shareholders; 

3) Executive body - is the body, which carries out management of the current activity of the Company. It can be individual or joint. (Management board, directorate); 

4) Audit Committee - a control body. 

2. The charter of a joint-stock company with up to fifty shareholders may stipulated activities without formation of the Board of Directors. 

Members of an executive body and audit committee cannot simultaneously act as members of the Board of Directors of the Company. 

3. Activity of the management bodies of the Company shall be regulated by the charter of the Company and internal documents of the Company. 

4. Government employees may be members of the Board of Directors of the Development Fund of the Kyrgyz Republic and the company formed under a public-private partnership, which is not covered by the first subparagraph of paragraph 2 of this article. 

The order of selection and nomination of government employees in the Board of Directors of the Company shall be determined by the Government of the Kyrgyz Republic. 

 

See: 

 

The order of selection and nomination of government employees in the Board of Directors of the company, set up in a public-private partnership (approved by the Government of the Kyrgyz Republic of May 27, 2009 #323) 

 

5. All the rules for selection of controls are established only by this law. 

(As amended by the Law of the Kyrgyz Republic of May 11, 2009 #152) 

 

Article 37. General meeting of shareholders 

 

1. The supreme management body of the Company is the general meeting of shareholders. 

The Company shall be obliged to conduct general meetings of shareholders every year (annual general meeting of shareholders) in the terms established by the Board of Directors of the Company or an executive body (if the Company carries out activity without formation of the Board of Directors), but no later than on May 1 of the year following for accounting one. Annual general meetings of shareholders held apart from annual general meetings of shareholders shall be considered as extraordinary. 

2. Date and order of the general meeting of shareholders, the order of notification of shareholders about its conduction, the list of materials (information) provided to shareholders by preparation for the general meeting of shareholders shall be established by the Board of Directors of the Company according to requirements of this Law and normative legal acts of the Kyrgyz Republic. 

 

See also: 

Manual for the General Meeting of Shareholders (prepared under the guidance of Ph.D. U.T.Abdynasyrov) 

 

Article 38. Competence of the general meeting of shareholders 

 

1. The following issues shall be referred to the competence of the general meeting of shareholders: 

1) Modification and additions to the charter of the Company or approval of the charter in the new wording; 

2) Reorganization of the Company; 

3) Liquidation of the Company, assignment of the liquidation commission and the approval of the liquidation balance; 

4) Making decision to change (increase or reduce) the number of outstanding shares of the joint-stock company, and also on issue of securities, convertible into shares; 

5) Making decision on the closed placement of shares additionally issued by the open company or the securities of the Company convertible into shares; 

6) Making decision on non-use of the right of priority of the shareholder to purchase shares of the Company or the securities convertible into shares, as stipulated by this Law in article 29; 

7) Making decision on fulfillment of large transaction in accordance with article 73 of this Law; 

8) Conversion of preference shares into ordinary ones; 

9) Election of heads and members of a joint executive body of the Company or the person who is carrying out functions of an individual executive body of the Company (if the Company carries out activity without formation of the Board of Directors); 

10) Making decision on the issue of the company are not convertible into shares of bonds and other securities, the total nominal value of 50 and more percent of the book value of assets of the company at the date of the decision to issue such securities;; 

11) Election of members of the audit committee (an auditor) of the Company and the prescheduled termination of their powers; 

12) Making decision on the size and the order of payment of dividends; 

13) Approval of the amounts of paid compensation and indemnifications to members of the Board of Directors; 

14) Making decision on a cancellation of the decisions contradicting the legislation of the Kyrgyz Republic, adopted by previous general meetings of shareholders; 

15) Use reserve and other funds of the Company; 

16) Making decision on the prescheduled termination of powers of the Board of Directors, an executive body of the Company (if the Company carries out activity without formation of the Board of Directors); 

17) Definition of quantitative membership of the Board of Directors of the Company if the charter does not determine the number of seats in the Board of Directors; 

18) Approval of annual reports, accounting balances, accounts of profits and losses of the company, distribution of its profits and losses; 

19) Approval of membership of the accounting commission; 

20) Approval of the amounts of paid compensation and indemnifications to members of the auditing (an auditor) of the Company; 

21) Election of members of the Board of Directors; 

22) Solution of other issues referred to the competence of the general meeting of shareholders by this Law, legislation of the Kyrgyz Republic and the charter of the Company. 

The general meeting of shareholders shall not be entitled to make decisions on this Law within the competence of other management bodies, except as provided by this Law. 

2. The solution of the issues specified in subparagraphs 1-23 of paragraph 1 of this article, is under the exclusive competence of the general meeting of shareholders. The issues referred to the exclusive competence of the general meeting of shareholders, cannot be transferred by the decision of other management bodies, unless otherwise provided by this Law. 

3. Annual meeting of shareholders shall: 

- approve annual budget, report of executive bodies of the Company, annual balance, the account of the profit and losses, make a decision on distribution of its profit and losses; 

- elect members of the Board of Directors, the audit committee and in case if the Company implements the activity without formation of the Board of Directors, members of an executive body; 

- solve other issues included in the agenda. 

(As amended by the Laws of the Kyrgyz Republic of August 13, 2004 #128, July 28, 2008 #181) 

 

Article 39. Decision of the general meeting of shareholders 

 

1. Except for the cases established by the legislation of the Kyrgyz Republic, the vote on the general meeting of shareholders on the issues put on voting shall be provided to: 

shareholders - owners of ordinary shares of the Company; 

shareholders - owners of preference shares of the Company in the cases stipulated by this Law. 

Voting at the General Meeting of Shareholders is based on the principle of “one share - one vote”, except for cumulative voting. 

2. Decisions on the issues listed in subparagraphs 1-8 of paragraph 1 of article 38 of this Law, are adopted by the majority no less than two thirds of votes of the total of voting shares of the Company. Calculation of votes at the general meeting of shareholders on an issue put on voting, at which decision the vote belongs to shareholders-owners of ordinary and preference shares of the Company shall be carried out on all voting shares in total. 

3. The decision on the issues specified in subparagraphs 2, 5-7, 10, 12, 15, 20 of paragraph 1 of article 38 of this Law, is accepted by the general meeting of shareholders only under the offer of the Board of Directors of the Company if other is not established by the charter of the Company. 

4. The decision on the issues specified in subparagraphs 9-18 of paragraph 1 of article 38 of this Law, shall be made by the general meeting of shareholders by the majority no less than two thirds of votes of shareholders - owners of the voting shares participating in the meeting of shareholders. 

5. The decision of the general meeting of shareholders on the issues listed in subparagraphs 19-23 of paragraph 1 of article 38 of this Law shall be adopted by simple majority of votes of shareholders-owners of voting shares of the Company participating in meeting. 

6. The decision of the general meeting of shareholders on the issues listed in subparagraph 21 of paragraph 1 of article 38 of this Law is made only by way of cumulative voting. 

In cumulative voting, each voting share of the company should account for the number of votes equal to the total number of seats on the Board of Directors. A shareholder is entitled to cast votes on shares held by it in favor of one candidate or distribute them among several candidates to the Board of Directors. 

Elected to the Board of Directors considered with the highest number of votes the candidates equal in number to the number of seats on the Board of Directors, certain charter or by the general meeting of shareholders. 

7. The decision of the general meeting of shareholders to bring the charter in line with the legislation of the Kyrgyz Republic shall be adopted by a simple majority of votes of shareholders - owners of voting shares participating in the meeting. 

8. The order of making decision by the general meeting of shareholders on the order of the meeting of shareholders shall be established by the charter of the Company or internal documents of the Company authorized by the decision of the general meeting of shareholders. 

9. The general meeting shall have no right to make decision on the issues that have been not included in the agenda unless the opposite decision is unanimously made at the meeting on which all shareholders-owners of voting shares of the Company are present. If the term is shorter or the notice on convocation of the meeting is not submitted, decisions of the meeting will have validity under condition of their unanimous adoption at the meeting. 

10. The decisions made by the general meeting of shareholders, and also the results of voting are brought to the notice of shareholders in the order and the terms stipulated by this Law and the charter of the Company, but no later than 30 days after these decisions are made. 

11. The shareholder and also the interested body of the Kyrgyz Republic shall have the right to appeal against the decision adopted by the general meeting of shareholders with infringement of requirements of this Law, other legal acts of the Kyrgyz Republic, the charter of the Company in the judicial order. 

(As amended by the Law of the Kyrgyz Republic of October 5, 2011 #162) 

 

Article 40. The decision of the general meeting of the shareholders, adopted via by-proxy voting (polling) 

 

1. The decision of the general meeting of shareholders can be adopted via by-proxy voting (polling). Requirements to the order of carrying out the general meeting via by-proxy voting (polling) can be established by normative legal acts of the Kyrgyz Republic. 

The decision of the general meeting of shareholders on the issues specified in subparagraphs 2-4, 9, 11, 16, 22 of paragraph 1 of article 38 of this Law, cannot be adopted via by-proxy voting (polling). 

2. The decision of the general meeting of shareholders, adopted via by-proxy voting (polling), shall be considered valid if the shareholders owning in aggregate no less than 60 percent of voting shares of the Company participated in voting. 

3. By-proxy voting shall be carried out with use of ballots. The date for provision of shareholders with ballots for voting should be established no later than 30 days prior to the date of termination of reception of ballots by the Company. 

4. At by-proxy voting the ballots submitted by shareholders to the Company should be certified by a notary or the independent register holder who is carrying out maintenance and deposit of the register of shareholders of the given company. 

5. The results of voting are brought to the notice of shareholders in time no later than 30 days after making decision. 

 

 

 

Article 41. The right to participate at the general meeting of shareholders 

 

1. The list of shareholders having the right to participate in the general meeting of shareholders shall be compiled on the basis of the data of the register of shareholders of the Company for the date established by the Board of Directors. 

Date of drawing up of the list of shareholders entitled to participate in the general meeting of shareholders, cannot be established before the of making decision to hold the general meeting of shareholders and more than 30 days prior to date of the general meeting. 

In case of carrying out the general meeting of shareholders via by-proxy voting the ballots received by the Company according to paragraph 2 of article 48 of this Law shall participate in definition of quorum and voting, the date of drawing up the list of the shareholders with the right to participate in the general meeting of shareholders shall be established no less than for 45 days and more than 60 days prior to date of the general meeting. 

2. To draw up the list of shareholders having the right to participate in the general meeting, the nominal holder of shares shall submit data on persons in whose interests it owns shares as of the date of drawing up the list. 

3. The list of shareholders having the right to participate in the general meeting of shareholders, shall contain name of each shareholder, its address (location), the data on number and category (type) of shares owned by it. 

4. At the demand of the shareholder the Company shall be obliged to provide it with the information its inclusion in the list of shareholders having the right to participate in the general meeting of shareholders. 

5. Changes in the list of the shareholders having the right to participate in the general meeting of shareholders can be made only in cases of: 

- restoration of broken rights of the persons who have not been included in the specified list as of the date of its drawing up; 

- corrections of mistakes admitted at its drawing up; 

- inclusion in the register of shareholders of the shareholder who has purchased shares, who has a vote, after the date established by the Board of Directors, but after the date established by the meeting of shareholders. 

 

Article 42. The information on holding the general meeting of shareholders 

 

1. The shareholders of an open company shall be notified of holding the general meeting of shareholders through publication of the information in press and submission of the notice in writing. 

2. The shareholders of a closed company shall be notified of the general meeting of shareholders by providing them with the written notice. 

The Company shall have the right to additionally inform shareholders of the general meeting of shareholders through other mass media (TV, radio). 

3. A closed company shall be obliged to inform shareholders of the general meeting of shareholders no later than 10 days prior to the date of its holding. 

An open company shall be obliged to inform shareholders of the general meeting of shareholders no later than 20 days prior to the date of its holding. The information should be published in the state (Kyrgyz) and official (Russian) languages. 

4. The notice of upcoming the general meeting of shareholders should contain: 

- name, date, time and site of the general meeting of shareholders; 

- date of drawing up of the list of shareholders having the right to participate at the general meeting of shareholders; 

- agenda of the general meeting of shareholders; 

- order of acquaintance of shareholders with the information (materials) to be provided to shareholders during preparation for the general meeting of shareholders. 

5. The following are referred to the information (materials) subject to be provided to shareholders during preparation for the general meeting of shareholders: 

- annual report on the financial and economic activity of the Company; 

- opinion of the audit committee (an auditor) of the Company and the auditor of the Company by results of annual check of the financial and economic activity of the Company; 

- data on candidates for the Board of Directors of the Company; 

- data on candidates for an executive body and audit committee (an auditor) of the Company if they are elected at the general meeting of shareholders; 

- draft changes and additions to the charter of the Company, or draft charter of the Company in the new wording. 

The list of the additional information (materials) to be provided to shareholders during preparation for the general meeting of shareholders can be established by acts of the Kyrgyz Republic and the charter of the Company. 

6. In a case if the nominal shareholder is the person included in the register of shareholders of the Company the notice on the general meeting of shareholders shall be given to the nominal holder of shares. The nominal holder of shares shall be obliged to inform its clients of the meeting in the order and terms established by the legislation of the Kyrgyz Republic or the agreement. 

7. The Company has no responsibility for not providing the information on the general meeting of shareholders to the shareholders included in the register of shareholders after the date of drawing up of lists of shareholders on participation in the general meeting of shareholders. 

8. Requirements on notification of shareholders, on preparation for the general meeting shareholders, procedures of quorum establishment, voting and calculation of votes at the general meeting of shareholders set forth in this Law shall not be extended to the Company with one shareholder. In the terms established by this Law, the Company shall be obliged to formulate its decision on paper. 

 

Article 43. Formation of the agenda of the general meeting of shareholders of the Company 

 

1. Shareholders (a shareholder) of the Company being in aggregate owners of no less than one percent of voting shares of the Company, in the period no later than 30 days after expiration of fiscal year, shall have the right to make no more than one offer to the agenda of the annual general meeting of shareholders and to nominate candidates for the elective bodies of the Company according to the charter. 

2. Proposals to include issues to the agenda of the general meeting of shareholders shall be submitted in writing to the Company with indication of reasons of such inclusion, name of a shareholder (shareholders) who submits the points, number of voting shares owned by it. 

3. In submission of proposals on nomination of candidates for the elective bodies, including in case of self-nomination, the name of a candidate, and also names of a shareholders who are nominating the candidate, number of voting shares belonging to them shall specified. 

4. The proposals of shareholders on the agenda received within the terms established by the Law under including those on the candidates for elective bodies shall be placed by the secretary of the Company for consideration by the Board of Directors of the Company. 

5. The Board of Directors of the Company shall be obliged to consider submitted proposals and to make decision to include them in the agenda of the general meeting of shareholders or to refuse to include them in the specified agenda no later than 15 days after expiration of the term established in paragraph 1 of this article. The issue brought by a shareholder (shareholders) shall be included in the agenda of the general meeting of shareholders, similarly the proposed candidates shall be included in the list of nominees for voting to elective bodies, except for cases, when: 

- a shareholder (shareholders) does not observe the term established by paragraph 1 of this article; 

- a shareholder (shareholders) is not the owner stipulated by paragraph 1 of this article of the number of voting shares of the Company; 

- data stipulated by paragraph 3 of this article are incomplete or doubtful; 

- proposals do not meet the requirements of this Law and other normative legal acts of the Kyrgyz Republic. 

6. The motivated decision of the Board of Directors of the Company on refusal in inclusion of an issue in the agenda of the general meeting of shareholders or the candidate for the list of nominees for voting on elections to elective bodies of the Company shall be given to the shareholder (shareholders) who brought in an issue or have submitted the offer, not later than three days from the moment of its adoption. 

In a case if the charter of the Company does not stipulate formation of the Board of Directors, positions of the secretary of the Company, the charter of the Company should contain an indication on the certain person or body of the Company to which competence the decision of a question on carrying out of general meeting of shareholders and on the statement of its agenda concerns. 

 

Article 44. Preparation for the general meeting of shareholders 

 

In preparation for the general meeting of shareholders the Board of Directors of the Company shall define the following: 

- date, place and time of the beginning of the general meeting of shareholders; 

- time of the beginning and termination of registration of shareholders; 

- agenda of the general meeting of shareholders; 

- date of drawing up the list of the shareholders having the right to participate in the general meeting of shareholders; 

- order of notification of shareholders about the general meeting of shareholders; 

- list of the information (materials) given to shareholders in preparation for the general meeting of shareholders; 

- content of the ballots. 

Time of registration of shareholders for participation in the general meeting of shareholders cannot be less than one hour prior to the beginning of the meeting. 

 

Article 45. Extraordinary general meeting of shareholders  

 

1. Extraordinary general meeting shareholders shall be carried out at the decision of the Board of Directors of the Company or an executive body (if the Company implements the activity without formation of the Board of Directors) on the basis of: 

- own initiative; 

- requirements of an executive body of the Company; 

- requirements of a shareholder (shareholders) being the owner no less than 20 percent of voting shares of the Company; 

- requirements of the audit committee of the Company; 

- requirements of the authorized state body of the Kyrgyz Republic regulating the securities market in case of violation of the legislation on securities. 

The decision shall be made on the form of the general meeting of shareholders (in person or by-proxy voting). The Board of Directors of the Company shall have no right to change by its decision the form of conducting a special general meeting of shareholders if requirements of the persons specified in paragraph 1 of this article, contain an indication of the form of its holding. 

The decision of the Board of Directors of the Company on the extraordinary general meeting of shareholders in the form of by-proxy voting (polling) should establish the following: 

- content of the ballot; 

- date of providing the ballots for voting and other information (materials) according to requirements of this Law, other normative legal acts of the Kyrgyz Republic and the charter of the Company to shareholders; 

- date when reception by the Company of ballots for voting will be closed. 

The extraordinary general meeting of shareholders shall be called by the Board of Directors or an executive body (if the Company implements the activity without formation of the Board of Directors) of the Company no later than 45 days from the moment of making decision on carrying out of the extraordinary general meeting of shareholders. 

2. In the requirement about calling the extraordinary general meeting of shareholders the issues subject to inclusion into the agenda of the meeting, with indication of reasons of their inclusion should be formulated. 

The Board of Directors of the Company shall have no right to make change to the formulation of points of the agenda of the extraordinary general meeting of shareholders, called at the request of the persons specified in paragraph 1 of this article. 

3. In a case if the requirement on calling the extraordinary general meeting of shareholders proceeds from a shareholder (shareholders), it should contain its name (name) with an indication of amount, a category of shares belonged to it. 

The request on calling of the extraordinary general meeting of shareholders shall be signed by a person (persons) requesting calling of the extraordinary meeting of shareholders. 

A shareholder (shareholders) initiating calling of the extraordinary general meeting of shareholders shall have no right to alienate the shares before the end of the meeting. 

4. Within 10 days from the moment of reception by the Company of the request the persons specified in paragraph 1 of this article, on calling the extraordinary general meeting of shareholders by the Board of Directors or an executive body (if the Company implements the activity without formation of the Board of Directors) of companies the decision should be adopted to call the extraordinary general meeting of shareholders or to refuse to call. 

The decision on refusal of calling of the extraordinary general meeting of shareholders on the request of persons specified in paragraph 1 of this article can be adopted, only if: 

- order of submission of the requirement established by this Law on calling the meeting is not observed; 

- a shareholder (shareholders) requesting calling the extraordinary general meeting of shareholders is not the owner of 20 percent of voting shares of the Company; 

- any of the issues offered for inclusion into the agenda of the extraordinary general meeting of shareholders of the Company, is not related to its competence; 

- issue offered for inclusion in the agenda, does not meet the requirements of this Law and other normative legal acts of the Kyrgyz Republic. 

5. The decision on calling of the extraordinary general meeting shareholders or the motivated decision on refusal of its call shall be provided to the persons requesting its calling, no later than three days from the moment of its adoption. 

The decision on refusal of calling of the extraordinary general meeting shareholders can be appealed in court.  

6. In case if in a period established by this Law by the Board of Directors of the company or an executive body (if the company carries out activities without forming the Board of Directors) decided not to convene the extraordinary general meeting of shareholders or made unmotivated decision to convene referred to in paragraph 1 of this article a person requesting it convene, may apply to the designated state body for regulation of the securities market with a demand to compel society to hold an extraordinary general meeting of shareholders.  

7. If, in a period established by this Law a term by the Board of Directors or executive body (if the company carries out activities without forming the Board of Directors) decided not to convene the extraordinary general meeting of shareholders or made unmotivated decision not to convene it, the authorized state body on regulation of securities market or the court may decide to force the Company to hold the extraordinary general meeting of shareholders. 

The decision of the authorized state authority to regulate the securities market or the court to compel the company to hold the extraordinary general meeting of shareholders shall contain the terms and procedure of the meeting. Execution of the decision of the authorized state authority to regulate the securities market or the court is on the person who has requested and requiring the convening of the extraordinary general meeting of shareholders, either on its motion for body of a company or any other person subject to their agreement. This body cannot be the Board of Directors (supervisory board) of the company. At the same the body of company or a person who, in accordance with the decision of the authorized state authority to regulate the securities market or the court shall hold then extraordinary general meeting of shareholders, have all the rights provided for in this Law and the powers necessary for the calling and holding the meeting. 

In case if in accordance with the decision of the authorized state body to regulate the securities market or the court the extraordinary general meeting of shareholders holding a person applying and requiring the convening of the extraordinary general meeting of shareholders, the costs of preparation and holding of this meeting can be reimbursed by the decision of the general meeting of shareholders for expense of the company. 

8. At the request of the person entrusted with the execution of the decision to force the Company to hold the extraordinary general meeting of shareholders, a holder of the register of shareholders of the Company shall send a notice to shareholders to hold the extraordinary general meeting of shareholders, to ensure their registration and the extraordinary general meeting of shareholders in accordance with the legislation of the Kyrgyz Republic. 

Amount of remuneration for the registrar of the company for the notification of shareholders and the holding of the extraordinary general meeting of shareholders on request of the person entrusted with the execution of the decision to force the Company to hold the extraordinary general meeting of shareholders shall not exceed the amount of the costs associated with the direction of the materials in the mail and necessary expenses to the general meeting of shareholders. 

9. The rules provided for in paragraphs 6-8 of this Article shall also apply to the annual general meeting of shareholders, if it had not been convened and held within the period prescribed in this Law. 

(As amended by the Law of the Kyrgyz Republic of April 13, 2012 #39) 

 

Article 46. The accounting commission 

 

1. In a joint-stock company with more than 3 shareholders - owners of voting shares of the Company the accounting commission shall be created, quantitative composition and membership shall be approved by the general meeting of shareholders as proposed by the Board of Directors of the Company. 

2. The accounting commission shall have no less than three members. The accounting commission cannot include members of the Board of Directors of the Company, members of the audit committee (an auditor) of the Company, members of an executive body of the Company, managing organization or the manager, and neither the persons who are nominated for these positions. 

3. The accounting commission should include the representative of an independent register holder. 

4. The accounting commission of the general meeting of shareholders shall clarify the issues arising in connection with realization by shareholders (their representatives) votes at the general meeting, a voting procedure on the issues put to the vote, shall provide the established voting procedure and rights of shareholders to participate in voting, shall count votes and summarize voting, shall develop the report on the results of voting, shall file the ballots. 

 

Article 47. The order of participation of shareholders in the general meeting of shareholders 

 

1. The right to participation in the general meeting of shareholders shall be realized by a shareholder personally or through the representative. 

A shareholder shall have the right to replace its representative at any time of the general meeting of shareholders or personally participate in the general meeting of shareholders. 

The representative of a shareholder at the general meeting of shareholders shall operate according to the powers based on instructions of laws of the Kyrgyz Republic or acts of authorized state bodies or institutions of local government or by the power of attorney, made in writing. The power of attorney on voting should contain data about the person represented and the representative (a name, place of residence or location, passport data). The power of attorney for voting should be made according to the legislation of the Kyrgyz Republic. The powers of attorney certified by the organization where a shareholder works or studies, the housing and operational organization by place of residence, administration of in-patient medical establishment in which he is getting treatment, are equated to such powers of attorney. 

A shareholder shall have the right to issue the power of attorney either for all set of shares belonging to it and for part of it; thus, the power of attorney can be issued to one or several legal representatives. 

The power of attorney for participation in voting on behalf of a shareholder cannot be given to executive officials of the Company. 

The power of attorney on voting issued by shareholders-non-residents of the Kyrgyz Republic should be formed in the order established by the legislation of the Kyrgyz Republic. 

The general meeting of shareholders shall be opened by the Chairman of the Board of Directors or by one of the members of the Board of Directors if the Chairman of the Board of Directors or the Head of the Executive Body (if the company is engaged in the activity without formation of the Board of Directors) is not available. Participants shall elect the Chairman of the meeting by open voting, and further on the meeting shall be presided by the elected chairman. 

2. If the shares are transferred within the period from date of drawing up of the list and before the date of the general meeting of shareholders the person included in the list of shareholders having the right to participation in the general meeting of shareholders, and also the person who is implementing maintenance and deposit of the register of shareholders of the Company, shall be obliged to notify the purchaser, that it has a right to participation in the general meeting of shareholders. The specified rule shall be applied also to each subsequent case of transfer of the share. 

3. In case the share of the Company is in the general share property of several persons then powers for voting at the general meeting of shareholders are carried out at their discretion by one of participants of the general share property or their general representative. Powers of each of the specified persons should be formed properly. 

(As amended by the Law of the Kyrgyz Republic of August 13, 2004 #128) 

 

Article 48. Quorum of the general meeting of shareholders 

 

1. The general meeting of shareholders shall be competent (have quorum) if at the moment of completion of registration for participation in the general meeting of shareholders, the shareholders (their representatives) owning in total more than 60 percent of placed voting shares of the Company are registered. 

2. In case if the shareholders are provided with ballots for voting (at by-proxy voting) the votes submitted by the specified ballots and received by the Company no later than one day prior to the date of the general meeting of shareholders, shall be taken into account at establishing of quorum and summarizing the voting. 

3. At absence of the quorum for conduction of the general meeting of shareholders date of the new general meeting of shareholders shall be declared. No change of the agenda at the new general meeting of shareholders shall be allowed. 

The new general meeting of shareholders called in place of the one failed to be conducted, shall be competent, if at the end of registration for participation in it the shareholders (their representatives) owning in aggregate no less than 40 percent of votes of the placed voting shares of the Company are registered. The charter of the Company with more than 10 thousand shareholders can stipulate smaller quorum for carrying out of the general meeting of shareholders instead of the one which have not taken place, but no less than 30 percent of votes of the placed voting shares of the Company. 

The notification on carrying out of the new general meeting of shareholders shall be made in the order stipulated by article 42 of this Law. 

4. If the date of the general meeting of shareholders is delayed for absence of quorum for less than for 30 days the shareholders with the right to participation in the general meeting of shareholders shall be established according to the list of the shareholders with the right to participation in the general meeting of shareholders which has failed to take place. 

 

Article 49. The ballot for voting 

 

1. Voting at the general meeting of shareholders on issues included in the agenda of the meeting shall be carried out by ballots. 

2. The content of ballots shall be approved by the Board of Directors of the Company or an executive body (if the Company implements the activity without formation of the Board of Directors). The ballot shall be issued to a shareholder (its representative), registered for participation in the general meeting shareholders, except for cases of by-proxy voting. 

3. The ballot for voting should contain: 

- name of the Company; 

- place, date and time of the beginning of carrying out of the general meeting of shareholders; 

- formulation of each issue put to the vote and sequence of its consideration; 

- variants of voting on each issue put to the vote, expressed by formulations "pro", "contra" or "abstainer". 

In case of carrying out of voting on election of a member of the Board of Directors of the Company, the audit committee or an executive body, the ballot for voting should contain data on a candidate (candidates) with indication of its full name (surname, name, patronymic name). 

 

Article 50. Calculation of votes in the voting that is carried out by ballots for voting 

 

A separate ballot for voting is used for each issue of the agenda. Votes on which the voting person has left only one of the options. Ballots for voting, filled with infringement of the above-stated requirement, shall be considered void and votes on issues included in them shall not be taken into account. 

The order and terms of deposit of bulletins for voting shall be established by normative legal acts of the Kyrgyz Republic. 

 

Article 51. The minutes on results of voting 

 

1. The accounting commission shall develop a minutes on results of the voting, which is signed by all members of the accounting commission. The minutes on results of voting shall be no less than three copies, one of which should be left at an independent register holder serving the given meeting of shareholders. 

2. After drawing up the report on results of voting the ballots shall be sealed up by the accounting commission and shelved in the Company. 

3. The report on results of voting shall be attached to the minutes of the general meeting of shareholders. 

4. Results of voting shall be disclosed at the general meeting of shareholders during which voting has taken place. 

 

Article 52. The minutes of the general meeting of shareholders 

 

1. The minutes of the general meeting of shareholders shall be complied no later than 15 days after carrying out of general meeting of shareholders in triplicate, one of which should be left at the independent register holder serving the given meeting of shareholders. All copies shall be signed by the chairman of the general meeting of shareholders, the secretary of the general meeting of shareholders, and attested by the Company's seal. 

2. The following are specified in the minutes of the general meeting of shareholders: 

- place and time of the general meeting of shareholders; 

- total number of votes that shareholders-owners of voting shares of the Company possess; 

- number of votes that the shareholders participating in the meeting possess; 

- chairman (presidium) and the secretary of the meeting, agenda of the meeting. 

The substantive provisions of speeches, the issues put to the vote, and results of voting on them, the decisions adopted by the meeting should be contained in the minutes of the general meeting of shareholders of the Company. 

The order and terms of deposit of the minutes of the general meeting of shareholders shall be established by normative legal acts of the Kyrgyz Republic. 

 

Article 53. The Board of Directors of the Company 

 

The Board of Directors shall carry out the general management of the Company's activity, except for the issues referred by this Law to the exclusive competence of the general meeting of shareholders. 

To members of the Board of Directors of the Company shall be repaid the expenses related to execution by of functions of members of the Board of Directors of the Company during performance of duties by them and remunerations can be paid at the decision of the general meeting of shareholders. The amount of such compensations and indemnifications shall be established by the decision of the general meeting of shareholders. 

 

See also: 

Typical position on the Board of Directors of the joint-stock companies (approved by Decree of the State Committee of the Kyrgyz Republic on the Securities of July 31, 2003 # 57) 

 

Article 54. The competence of the Board of Directors of the Company 

 

1. The following issues shall be referred to the exclusive competence of the Board of Directors: 

- establishment of strategic purposes of a joint-stock company and formation of its policy, and also control for its implementation by the executive body; 

- (third paragraph is null and void in accordance with the Law of the Kyrgyz Republic of April 13, 2012 #39); 

-(fourth paragraph is null and void in accordance with the Law of the Kyrgyz Republic of April 13, 2012 #39);  

- adoption and approval of internal documents of the Company, changes and additions to them, except for the cases stipulated by this Law; 

- making decision on the large transaction fulfillment in accordance with article 73 of this Law; 

- election of an executive body and establishment of amounts of remuneration to be paid; 

- election of the head of the collegial executive body; 

- making decision on the prescheduled termination of powers of the executive body; 

- preparation of recommendations on the size of the dividend on shares and the order of its payment; 

- submission of the grounded recommendations concerning reorganization of the Company, and also on creation of branches and opening of representations of the Company; 

- election of an auditor of the Company and definition of the size of payment of the auditor's services; 

- recommendations to the general meeting of shareholders on the size, conditions and order of increase or reduction of the number of outstanding shares; 

- development of materials for consideration at the general meeting of shareholders; 

- supervision of execution of decisions of the general meetings of shareholders; 

- election of the secretary of the Company; 

- making decision on the issue the company is not convertible into shares of bonds and other securities, the total nominal value of up to 50 percent of the book value of assets of the company at the date of the decision to issue such securities. 

2. The following issues can also be referred to the competence of the Board of Directors: 

-convening annual and extraordinary general meetings of shareholders of the company, except as provided in paragraphs 6-9 of article 45 of this Law; 

- formation and adoption of the agenda of the general meeting of shareholders, except as required by this Law, as well as other issues related to the preparation and holding of the General Meeting of Shareholders; 

- conclusion of agreements with members of an executive body, the audit committee, the accounting commission, the secretary and the auditor of the Company; 

- to represent the Company in courts, in cases of non-execution of decisions of the general meeting of shareholders and the Board of Directors by the executive body; 

- other issues stipulated by the legislation of the Kyrgyz Republic and the charter of the Company. 

The issues referred to the exclusive competence of the Board of Directors of the Company, cannot be delegated to other management bodies of the Company for decision, except for the cases established by this Law. 

3. In joint-stock companies, operating without formation of the Board of Directors, the company's charter issues relating to the exclusive competence of the Board of Directors, may be referred to the general meeting of shareholders or executive body, unless otherwise provided by this Law. 

(As amended by the Laws of the Kyrgyz Republic of August 13, 2004 #128, April 13, 2012 #39) 

 

Article 55. Election of the Board of Directors of the Company 

 

1. Members of the Board of Directors of the Company shall be elected at the general meeting of shareholders in the order stipulated by this Law and the charter of the Company, for the period of three years. 

If the term of office of members of the Board of Directors has expired and a new Board of Directors is not elected, the Board of Directors shall hold office until the election of the new Board of Directors. 

The persons elected for the Board of Directors of the Company, can be re-elected unlimited number of times. 

At the decision of the general meeting of shareholders powers of members of the Board of Directors of the Company can be cancelled ahead of schedule. Powers of members of the Board of Directors became part of the Board of Directors to replace the revoked terminated with the termination of office of all members of the Board of Directors. 

Any changes in structure of the Board of Directors shall be made by election of all members of the Board of Directors if the number of remaining members will be less than half of membership of the Board of Directors. 

2. It is not necessary for a member of the Board of Directors to be a shareholder of the Company; requirements for persons to be elected to membership in the Board of Directors of the Company may be established by the charter of the Company or the internal document approved by the general meeting of shareholders. 

3. The quantitative structure of Board of Directors of the Company should be odd and be established by the charter of the Company or the decision of general meeting of shareholders and should not be not less than 3 and more 11 members.  

4. (It is excluded in accordance with the Law of the Kyrgyz Republic of August 13, 2004 # 128) 

5. (It is excluded in accordance with the Law of the Kyrgyz Republic of August 13, 2004 # 128) 

(As amended by the Laws of the Kyrgyz Republic of August 13, 2004 #128, July 28, 2008 #181) 

 

 

 

Article 56. Chairman of the Board of Directors of the Company 

 

1. Chairman of the Board of Directors of the Company shall be elected a member of the Board of Directors of the Company from the number the majority of votes from the general number of members of Board of Directors. 

The Board of Directors of the Company shall have the right to re-elect at any time the chairman by majority of votes from the general number of members of the Board of Directors. 

2. Chairman of the Board of Directors of the Company shall organize its work, call sessions of the Board of Directors of the Company and presides at them, shall organize maintaining the minutes at sessions. 

3. In case of absence of the chairman of the Board of Directors of the Company of its function carries out one of members of the Board of Directors of the Company, authorized by the Board of Directors of the Company. 

(As amended by the Law of the Kyrgyz Republic of August 13, 2004 #128) 

 

Article 57. Session of the Board of Directors of the Company 

 

1. Session of the Board of Directors of the Company shall be called by the chairman of the Board of Directors of the Company by its own initiative or by request of: 

- member (members) of the Board of Directors of the Company; 

- audit committee (an auditor) of the Company or an auditor of the Company; 

- executive body of the Company, and also other persons established by the charter of the Company; 

- authorized state body of the Kyrgyz Republic regulating the securities market, in case of revealing infringements of the legislation of the Kyrgyz Republic on securities. 

Session of the Board of Directors shall be carried out as required, but at least once in a quarter. The order of calling and carrying out of sessions of the Board of Directors of the Company shall be established by the charter of the Company or the internal document of the Company. The charter of the Company can stipulate the possibility of decision making by the Board of Directors of the Company by means of by-proxy voting. 

2. The quorum for carrying out of session of the Board of Directors of the Company shall be established by the charter of the Company, but there should not be less than half from number of the elected members of the Board of Directors of the Company. In a case when the number of members of the Board of Directors of the Company is less than half of the number stipulated by the charter of the Company, the Company shall become obliged to call the extraordinary general meeting of shareholders for election of the new Board of Directors of the Company. 

The remaining members of the Board of Directors of the Company shall have the right to make decision only on calling and preparation for the extraordinary general meeting of shareholders. 

3. Decisions at the session of the Board of Directors of the Company shall adopted by the majority of votes from the total number of members of the Board of Directors elected by the general meeting of shareholders unless this Law, the charter of the Company or its internal document determining the order of calling and carrying out of sessions of the Board of Directors, stipulate otherwise. In adoption of decisions at the session of the Board of Directors of the Company each member of the Board of Directors of the Company shall have one vote. 

No transfer of a vote by one member of the Board of Directors of the Company to another member of the Board of Directors of the Company shall be allowed. 

The charter of the Company can stipulate the right to a decisive vote of the chairman of the Board of Directors of the Company in adoption of decisions by the Board of Directors of the Company in case of equality of votes of members of the Board of Directors of the Company. 

4. At session of the Board of Directors of the Company the minutes shall be kept. The minutes of session of the Board of Directors of the Company shall be compiled no later than 10 days after its carrying out. The minutes of the session shall specify the following: 

- place and time of its carrying out; 

- agenda of the session; 

- list of the persons present at session; 

- issues put to the vote, and results of voting on them; 

- decisions adopted by the Board of Directors. 

The minutes of the session of the Board of Directors of the Company shall be signed by the presiding on the session and a secretary who are responsible for correctness of the minutes. 

 

Article 58. Executive body of the Company 

 

1. The individual executive body of the Company and joint executive body of the Company (Management board, Board of Directors) shall manage the current activity of the Company. 

Members of the executive body of the Company shall be elected by the Board of Directors or if the Company carries out activity without formation of the Board of Directors by the general meeting of shareholders in the order stipulated by this Law and the charter of the Company for the period of 1 year. 

The persons elected as members of the executive body of the Company, can be reelected unlimited number of times. 

At the decision of the Board of Directors, or if the Company carries out activity without formation of the Board of Directors of the general meeting of shareholders the powers of the executive body of the Company can be transferred under the agreement to the commercial organization (managing organization) or the individual businessman (manager). Conditions of the concluded agreement shall be approved by the Board of Directors of the Company, unless the charter of the Company stipulates otherwise. 

Persons elected to the executive organ of the company, in which the state owns more than 50 percent of the shares cannot be re-elected again in the event of deterioration in financial performance of the company for the period of their work and / or retention of the negative trend in terms of profitability. 

Officers of the Company, which led it to bankruptcy or removal from office for unsatisfactory work, faulty behavior or committing the offense at the place of work, cannot be elected to the management company with the state-owned block of shares. 

2. All issues of management of the current activity of the Company, except for the matters related to the exclusive competence of the general meeting of shareholders or the Board of Directors of the Company shall be referred to the competence of the executive body of the Company. The executive body of the Company shall organize performance of decisions of the general meeting of shareholders and the Board of Directors of the Company. 

3. Rights and duties of an individual executive body of the Company, members of the joint executive body of the Company, the managing organization or manager on realization of the current activity of the Company shall be established by this Law, other normative legal acts of the Kyrgyz Republic, the charter of the Company, the agreement concluded with the Company, legal documents of the Company. The agreement on behalf of the Company shall be signed by the Chairman of the Board of Directors of the Company or the person authorized by Board of Directors of the Company. 

4. Annually, not later than 20 days before the date of the meeting of shareholders the executive body of the Company should prepare the annual report, balance report, the account of profit and losses, and the annual budget and provide availability of these materials to shareholders for familiarization. 

The executive body should submit the annual report, the balance report, the account of the profit and losses and the annual budget to the general meeting of shareholders. 

5. Executive body shall regularly, but at least once a quarter, report to the Board of Directors of financial and economic activities of the company and meeting the objectives and policies of society. 

(As amended by the Laws of the Kyrgyz Republic of August 13, 2004 #128, October 5, 2011 #163) 

 

See:  

Standard provisions on the Management of joint stock company (approved by the Decree of the State Committee of the Kyrgyz Republic with the Securities of July 31, 2003 #57) 

 

 

 

 

Article 59. The individual executive body of the Company (Director, Director General) 

 

1. The individual executive body of the Company shall operate on behalf of the Company without power of attorney, and also it shall represent its interests, make transactions on behalf of the Company, approve list of members of staff, issue orders and instructions, obligatory for execution by all employees of the Company. 

2. Overlapping of positions in management bodies of other organizations by the person who is carrying out functions of an individual executive body shall be allowed with the consent of the Board of Directors of the Company and with the consent of the general meeting shareholders (if the company is engaged in the activity without formation of Board of Directors). 

3. According to the current legislation of the Kyrgyz Republic, the charter of the Company, concluded agreements of the Board of Directors shall have a right to terminate the agreement with an individual executive body of the Company at any time. 

 

Article 60. Joint executive body of the Company (Management board, Board of Directors) 

 

1. Joint executive body of the Company shall operate on the basis of the charter of the Company, and also of the internal document of the Company (position, the rules or other document) approved by the general meeting of shareholders of the Company in which terms and order of calling and carrying out of its meetings, and also the order of making decisions are established. 

2. At meeting of the joint executive body of the Company the minutes shall be kept. The minutes of the meeting of the joint executive body of the Company shall be submitted to members of the Board of Directors of the Company, the audit committee (an auditor) of the Company, the auditor of the Company at their request. 

The meeting of the joint executive body of the Company shall be organized by its Head who signs all documents and minutes of meetings of the joint executive body of the Company. Head of the joint executive body shall operate without power of attorney on behalf of the Company according to the charter of the Company, decisions of the Board of Directors and the joint executive body of the Company. 

3. Overlapping of positions in management bodies of other organizations by the persons who are carrying out functions of members of the joint executive body of the Company shall be allowed only with the consent of the Board of Directors of the Company and with the consent of the general meeting shareholders (if the company is engaged in the activity without formation of the Board of Directors). 

4. According to the current legislation of the Kyrgyz Republic, the charter of the Company, concluded agreements of the Board of Directors shall have the right to terminate the agreement with members of the joint executive body of the Company, managing organization or the manager 

 

Article 61. The secretary of the Company 

 

1. In an open company with more than fifty shareholders the post of the secretary of the Company should be stipulated. The secretary of the Company is the official of the Company elected by the Board of Directors or the general meeting (if the Company carries out activity without formation of the Board of Directors) who is responsible for the following issues: 

- communication with shareholders of the Company on issues of realization of rights by them; 

- control over maintenance and deposit of the register of shareholders of the Company; 

- formation of proposals of shareholders on the agenda of the general meeting of shareholders; 

- provision of shareholders of the Company with materials on general meetings of shareholders; 

- maintenance of deposit of materials of general meetings of shareholders, sessions of the Board of Directors according to the legislation of the Kyrgyz Republic. 

2. The charter of the Company can stipulate other duties of the secretary of the Company. The charter of the Company with fifty and less number of shareholders should contain an indication on a certain person or body of the Company that is competent on the above mentioned issues. 

 

See: 

Standard provisions on the Secretary of joint stock companies (approved by the Decree of the State Commission of the Kyrgyz Republic on securities of July 31, 2003 # 57) 

 

Article 62. Audit Committee (an auditor) of the Company 

 

1. For control over the financial and economic activity of the Company by the general meeting of shareholders the audit committee (an auditor) of the Company shall be elected. Members of the audit committee (an auditor) shall be elected from shareholders of the Company if the charter of the Company does not establish otherwise. 

Persons elected to the audit committee (an auditor) of the company in which the state owns more than 50 percent of the shares cannot be re-elected more than three times in sequence. 

2. The competence of the audit committee (an auditor) of the Company on the issues, which have been not stipulated by this Law, shall be established by the charter of the Company. 

The order of activity of the audit committee (an auditor) of the Company shall be established by the internal document of the Company, approved by the general meeting of shareholders. 

3. Check (audit of the financial and economic activity of the Company shall be carried out on results of the activity of the Company for a year, and also at any time under the initiative of the audit committee (an auditor) of the Company, the decision of the general meeting of shareholders, the Board of Directors of the Company or at the request of a shareholder (shareholders) of the Company owning in total no less than 10 percent of voting shares of the Company. 

The audit committee regularly, but not less frequently than quarterly informs the Board of Directors on the work. 

The results of the audit committee shall be communicated to shareholders at the annual general meeting of shareholders. 

4. At the request of the audit committee (an auditor) of the Company the persons occupying positions in the management board of the Company shall be obliged to provide documents on the financial and economic activity of the Company. 

5. The audit committee of the Company shall have the right to: 

- require the convening of the extraordinary general meeting of shareholders; 

- involve in independent experts and auditors at the expense of the company; 

- require the participation of members of the executive meetings of the audit committee in cases where the subject matter requires their explanations; 

- require the officers of the company to provide the necessary documents for its work; 

- make recommendations on the election of the auditor and to initiate the issue of termination of agreement; 

- get clarification from the company's auditor. 

6. Members of the audit committee (an auditor) of the Company cannot simultaneously be members of the Board of Directors of the Company, and also occupy other positions in the management body of the Company. 

The members of the audit committee may not be employees of the company. 

7. Meetings of the audit committee are held as required, but not less than once per quarter. The procedure of convening and holding the meeting of the audit commission is set by its internal documents. 

(As amended by the Laws of the Kyrgyz Republic of August 13, 2004 #128, October 5, 2011 #163) 

 

See: 

Standard Provisions on the audit committee of a joint stock company (approved by the decision of the State Commission on Securities of the Kyrgyz Republic of July 31, 2003 #57) 

 

 

Article 63. Audit of the Company 

 

An auditor of the Company on the basis of the executed agreement performs an independent audit of financial statements of the company in order to determine whether it satisfies the requirements of the legislation of the Kyrgyz Republic, gives preliminary opinion on transactions in which there is an interest of the persons referred to in article 75 of this Law. 

The Company shall, in accordance with the legislation of the Kyrgyz Republic to conduct an annual audit of financial statements should engage an independent auditor. 

The audit may be conducted at any time by resolution of the general meeting of shareholders, the Board of Directors, the audit committee or at the request of the shareholder (s) holding in the aggregate not less than 10 percent of the voting shares. 

A shareholder (s) to test and verify the accuracy of financial reporting has the right to involve the company's auditor or other independent auditor. In the latter case, the payment of the auditor is at the expense of the person who initiated the audit. 

(As amended by the Laws of the Kyrgyz Republic of August 13, 2004 #128, June 2, 2008 #110) 

 

Article 64. The opinion of the audit committee (an auditor) of the Company and an auditor of the Company 

 

On results of check of the financial and economic activity of the Company the opinions shall be made by: 

- the audit committee (an auditor) of the Company; 

- the auditor of the Company. 

The opinion should contain the following: 

- confirmation of reliability of the data contained in reports and other financial documents of the Company; 

- information on the facts of infringement of the order of accounting and submission of financial reporting, established by normative legal acts of the Kyrgyz Republic, and also normative legal acts of the Kyrgyz Republic at implementation of financial and economic activity. 

 

Article 65. The responsibility of officials of the Company 

 

1. Officials of a joint-stock company shall be: 

- members of the Board of Directors; 

- members of the executive body; 

- members of the audit committee; 

- the secretary of the Company. 

2. Shareholders and members of the Board of Directors shall not allowed to interfere in the current management of the Company by issuing direct instructions, orders or other sort of instructions in the form of requests or the recommendation to members of the executive body. 

3. Officials of the Company bear the responsibility before the Company for the damage caused to the Company by their guilty actions (inactivity), according to the legislation of the Kyrgyz Republic. 

Members of the Board of Directors, the executive body, the audit committee of the Company having voted against the decision that has entailed causing damage to the Company, or having not participated in voting, shall not have the responsibility for causing damage to the Company. 

4. In a case if according to provisions of this article some persons bear responsibility, their responsibility before the Company shall be joint. 

5. If the report on the financial and economic activity essentially distorts reflection of the financial status of the Company, the officials of the Company who have signed the specified documents, shall have subsidiary responsibility before third parties whom, as a result, the material damage has been harmed to. 

(As amended by the Laws of the Kyrgyz Republic of June 2, 2008 #110, July 28, 2008 #181) 

 

Chapter VII 

Purchase and repayment of the placed shares by the Company 

 

Article 66. Purchase of the placed shares by the Company 

 

1. The Company, except for the Company engaged in the banking activity, can purchase the shares placed by it for the subsequent resale, distribution among the shareholders or cancellation. Such shares should be realized no later than one year from the date of their purchase, otherwise the general meeting of shareholders shall be obliged in three-month term to make the decision on reduction of the number of paid shares by cancellation of the specified shares. 

The shares purchased by the Company shall not provide a right to vote, they shall be not taken into account at calculation of votes, no dividends shall be charged on them. 

No transactions with the shares of own release purchased by the Company shall be allowed after a year from the moment of their purchase. 

The total numbers of shares of own issue purchased by a joint-stock company should not exceed 10 percent from total number the shares that have been issued by the Company. 

2. The shares purchased by the Company on the basis of the decision adopted by the general meeting of shareholders on reduction of number of outstanding shares of the Company, shall repaid at their purchase. 

The Company shall have no right to make a decision on reduction of the number of paid shares of the Company by purchase of part of the placed shares with a view of reduction of their total number if the capital of the Company becomes below the minimal size of the charter capital stipulated by this Law. 

3. By the decision on purchase of shares categories of purchased shares, number of shares of each category purchased by the Company, the price of purchase, the form and term of payment, and also term during which shares are purchased should be established. 

The purchase price of shares shall be established by the Company according to article 71 of this Law. 

Each shareholder - the owner of shares of certain categories, the decision on purchase of which has been accepted, shall have the right to sell the specified shares, and the Company shall be obliged to purchase them. In case if the total number of shares stated for sale, exceeds the number of shares which can be purchased by the Company in view of the restrictions established by this article, shares shall be purchased from shareholders in proportion with the declared requirements. 

4. No later than 30 days prior to the beginning of term during which shares are purchased, the Company shall be obliged to notify shareholders - owners of shares of the certain categories, the decision on purchase of which has been adopted. The notice should contain the data specified in the first paragraph of point 3 of this article. 

5. Preference shares shall be purchased at a price stipulated by the charter of the company or at the market price of shares. 

 

Article 67. Restrictions on purchase of the placed shares by the Company 

 

1. The Company shall have no right to purchase of the shares placed by it: 

- before registration of results of the shares issued by the Company; 

- if at the moment of their purchase the Company meets attributes of bankruptcy (inconsistency) according to normative legal acts of the Kyrgyz Republic on bankruptcy (inconsistency) of the enterprises or the specified attributes appear as a result of purchase of these shares. 

2. The Company shall have no right to purchase the placed shares up to the repayment of all shares, requirements on repayment of which are stated according to Article 70 of this Law. 

 

Article 68. Consolidation and breaking of shares of the Company 

 

1. Under the decision of the general meeting of shareholders the Company shall have the right to consolidate the placed shares as a result of which two or more shares of the Company are converted in one new share of the same category. Thus respective alterations are made in the charter of the Company concerning the number of the declared shares of the Company. 

In case of formation of fractional shares at consolidation they are subject to the repayment by the Company at the market price, established according to article 71 of this Law. 

2. Under the decision of the general meeting of shareholders the Company shall have the right to break the placed shares of the Company as a result of which one share of the Company is converted in two or more shares of the Company of the same category. Thus respective alterations shall be made in the charter of the Company concerning the number of declared shares of the Company. 

3. Registration of change of the number of shares shall be made by the Company in the order established by the legislation of the Kyrgyz Republic. 

 

Article 69. Redemption of shares by the Company at the demand of shareholders 

 

1. Shareholders - owners of voting shares have the right to demand redemption by the Company of all or parts of shares belonging to them in cases: 

- reorganization of the Company or fulfillment of the large transaction, the decision on which is adopted by the general meeting of shareholders if they voted against the decision on its reorganization or fulfillment of the specified transaction; 

- modification and additions in the charter of the Company or approval of the charter of the Company in a new wording, limiting their rights if they voted against acceptance of the corresponding decision. 

Shareholders of the Company that are engaged in banking activity shall have no right to demand redemption of shares by the Company. 

2. The list of the shareholders having the right to demand redemption by the Company of shares belonging to them, shall be made on the basis of the data of the register of shareholders of the Company at the date of drawing up of the list of shareholders of the Company having the right to participation in the general meeting of shareholders agenda of which includes issues, voting on which according to this Law can entail occurrence of the right to demand the redemption of shares. 

3. Redemption of shares shall be carried out by the Company at the price not below the average price of purchase of shares of the Company for last six months previous to the date of adoption of the decision by the general meeting, the right, which have entailed occurrence of the demand of estimation and redemption of shares. 

 

Article 70. The procedure of realization of the right of shareholders to demand redemption by the Company of shares owned by them 

 

1. The company shall be obliged to inform shareholders on their rights to demand redemption by the Company of shares belonging to them, the price and the procedure of the redemption. 

2. The notification of shareholders about the general meeting of shareholders the agenda of which includes issues, voting on which can entail occurrence of the right to demand the redemption the Company of shares according to this Law, should contain the data specified in paragraph 1 of this article. 

3. The written demand of the shareholder about redemption of shares belonging to him/her shall sent to the Company with indication of residence (location) of the shareholder and number of shares, redemption of which is demanded. 

The demand of shareholders of redemption of shares belonging to them should be filed with the Company no later than 45 days from the date of adoption of the corresponding decision by the general meeting of shareholders. The Company shall be obliged to redeem shares from the shareholders who have filed the demand of redemption in the established term, within 30 days from the moment of submission of such a demand. 

4. The shares shall be purchased by the Company at the price specified in the notification on the general meeting the agenda of which shall include issues, voting on which can entail occurrence of the right to demand redemption by the Company of shares according to this Law. The total number of shares of own issue purchased by the joint-stock company should not exceed 10 percent from total number of shares that have been issued by the Company. In case if the total of shares concerning which the demands of redemption are filed exceeds the number of shares which can be redeemed by the Company in view of the restriction established above, the shares shall be repaid from shareholders proportionally to the declared demands. 

 

Article 71. Definition of a market price of property 

 

1. A market price of property, including the price of shares or other securities of the Company, is the price at which the seller having the full information on cost of property and not obliged to sell it, would agree to sell it, and the buyer having the full information on cost of property and not obliged to purchase it, would agree to purchase. 

2. A market price of property shall be established by the decision of the Board of Directors of the Company on the basis of the recognized market quotations or the conclusions of independent appraisers of property unless otherwise is established by the charter of the Company. 

The Company shall be obliged to determine a market price of property in the cases stipulated by this Law and the charter of the Company. 

3. Attraction of the independent appraiser for determination of the market price of property shall be obligatory in case when the Company redeems shares of shareholders according to article 70 of this Law. 

 

Chapter VIII 

Large transactions 

 

Article 72. Large transactions connected to purchase or alienation of property by the Company 

 

1. Large transactions are transactions or a series of related transactions for 10 percent of the book value of assets of the company at the date of the decision to enter into such transactions. 

2. Estimation of the price of the property being a subject of the large transaction shall be carried out by the Board of Directors of the Company according to article 71 of this Law. 

3. Transactions made in violation of the requirements of Chapter VIII of this Law may be declared void by the court. 

(As amended by the Law of the Kyrgyz Republic of August 13, 2004 #128) 

 

Article 73. Fulfillment of the large transaction connected to purchase or alienation of property by the Company 

 

1. The decision on fulfillment of the large transaction the subject of which is the property costing from 20 to 50 percent of the balance cost of assets of the Company for the date of making decision on fulfillment of such transaction shall be adopted by the Board of Directors of the Company by the majority of votes. The charter of the Company shall stipulate the opportunity of the Board of Directors to make a decision on the transaction the subject of which is the property of the Company costing less than 20 percent of the balance cost of assets of the Company. 

2. The decision on fulfillment of the large transaction subject of which is the property costing 50 and more percent of the balance cost of assets of the Company as of the date of making decision on fulfillment of such transaction, shall be adopted by the general meeting of shareholders by the majority no less than two thirds of total of voting shares of the Company. 

The company's charter can be set to decide on the transaction value of less than 50 percent of the book value of the company's assets by the general meeting of shareholders. 

3. The company shall have the right to dispose its own social and cultural entities at its own discretion. 

(As amended by the Law of the Kyrgyz Republic of August 13, 2004 #128) 

 

Article 74. Purchase of 50 or more percent of simple shares of the Company 

 

1. The person having intention to independently or jointly with an affiliated person (persons) to purchase 50 or more percent of the placed ordinary shares of the Company in view of amount of shares belonging to it, shall be obliged no later than 30 days before the date of purchase of shares to send a written statement to the Company with the offer on purchase of the specified shares with indication of the price of their purchase. 

2. The offer of the person specified in paragraph 1 of this article, on purchase of ordinary shares shall be forwarded to all shareholders to owners of ordinary shares of the Company in writing no later than 30 days after reception of the offer. 

3. A shareholder shall have the right to accept the offer on purchase of shares in terms no more than 30 days from the moment of reception of the offer, and the person who has made such offer, shall be obliged to redeem them. 

4. The offer to shareholders on purchase of shares shall contain the data on the person, who purchases 50 or more percent of ordinary shares of the Company (name, address or location), number and the price of purchase of shares offered to shareholders, term of purchase of shares. 

5. Specifics of purchase of the shareholding of the bank, giving the right to directly or indirectly control, shall be regulated by a special Law. 

 

Chapter IX 

Interest in fulfillment of the transaction by the Company 

 

Article 75. Interest of officials and their affiliated persons in fulfillment of the transaction by the Company 

 

The persons interested in fulfillment of the transaction by the Company, shall be officials of the Company, a shareholder (shareholders) owning together with affiliated person (persons) 20 or more percent of voting shares of the Company, and also members of their families in case if they: 

- are the party of such transaction or participate in it as the representative or the intermediary; 

- own 20 or more percent of voting shares (shares, parts) the legal entity being the party of the transaction or participating in it as the representative or the intermediary; 

- are officials of the legal entity being the party of the transaction or participating in it as the representative or the intermediary. 

(As amended by the Laws of the Kyrgyz Republic of June 2, 2008 #110) 

 

Article 76. The information on interest in fulfillment by the Company of the transaction 

 

The persons specified in article 75 of this Law, shall be obliged to provide the following information to the Board of Directors of the Company, the audit committee (an auditor) of the Company and the auditor of the Company: 

- about legal entities in which they own independently or together with the affiliated person (persons) have 20 or more percent of voting shares (share, part); 

- about legal entities in which they occupy positions in the Management board; 

- about prospective transactions with the Company in which they can be recognized as interested persons. 

Open company is obliged to disclose information of the beneficiary of the transaction, which is an interested persons specified in article 75 of this Law, within 5 days from the date of such transaction by publishing in the mass media about the transaction, and send a notice with information about the transaction (on the terms and nature of the transaction, all material facts relating to the nature and extent of the existing interest) to the authorized state authority to regulate the securities market. 

Information about the conditions and the nature of the transaction, which is an interested persons specified in article 75 of this Law, including disclosure of all material facts relating to the nature and extent of this interest should be included in the quarterly, annual report, drawn up by the company in accordance with the legislation of the Kyrgyz Republic. 

A company upon the request of any shareholder to provide detailed information about transactions in which there is an interest of the persons referred to in article 75 of this Law.  

(As amended by the Law of the Kyrgyz Republic of June 2, 2008 #110) 

 

Article 77. Requirements to the order of the conclusion of the transaction of interest 

 

1. The decision on the conclusion of a transaction in which there is an interest of persons referred to in article 75 of this Law shall be adopted by the Board of Directors by a majority vote of the directors who are not interested in the transaction. 

2. The decision on the conclusion of a transaction in which there is interest, divided by the present Law to the general meeting of shareholders, the general meeting of shareholders is not less than two-thirds of the total number of voting shares. In this case, the shares held by concerned shareholders do not participate in the counting of the votes, and do not vote on the matter. 

3. The transaction, which is an interested persons specified in article 75 of this Law may be effected only if: 

- the value of that company receives for the alienated property or services provided, not less than the market price of the property or services, as determined in accordance with article 71 of this Law, or the cost of acquisition of property or services does not exceed the market price of the property or services, as determined in accordance article 71 of this Law; 

- the presence of the auditor's Company for the transaction. 

4. The conclusion of the transaction, in which there is an interest, does not require a resolution of the general meeting of shareholders, provided for in paragraph 3 of this article, in the following cases: 

- the transaction is made in the ordinary course of business between the Company and the other party, which took place prior to the point at which the person concerned is recognized as such in accordance with article 75 of this Law (the decision is not required prior to the next general meeting of shareholders). 

5. In case if by the date of the general meeting of shareholders it is impossible to establish the transactions made during the economic relations between the Company and other party of the transaction in fulfillment of which there can appear an interest in the future, requirements of paragraph 3 of this article shall be considered executed under condition of adoption by the general meeting of shareholders of the decision to establishment contract relations between the Company and other person with indication of character of transactions which can be accomplished, and their ceiling amounts. 

6. In case all members of the Board of Directors of the Company are interested persons, the transaction should be accomplished by the decision of the general meeting of shareholders according to paragraph 2 of this article. 

7. Additional requirements to the order of conclusion of the transaction in fulfillment of which there is an interest can be established by normative legal acts of the Kyrgyz Republic. 

(As amended by the Law of the Kyrgyz Republic of June 2, 2008 #110) 

 

 

Article 78. Consequences of non-observance of requirements to the transaction in fulfillment of which there is an interest 

 

1. The transaction in fulfillment of which there is an interest accomplished with infringement of requirements to the transaction, stipulated by article 76 and 77 of this Law can be recognized void in the order established by the legislation of the Kyrgyz Republic. 

2. The person concerned shall be liable to the company and the shareholders of liability in the amount of damages caused to the Company and the shareholders, and the obligation to make good the damage caused to the Company and the shareholders as a result of the transaction, which is an interest of the persons referred to in article 75 of this Law, in violation of the requirements of this Law and return to society all the income from such a transaction. If several persons are liable, their liability is joint and several to the community. 

3. Officers of the Company, made ​​the decision to conclude the transaction with interested persons in violation of this Law, shall be liable to the company and the shareholders in the amount of damage to the company and the shareholders of such a transaction. 

(As amended by the Law of th Kyrgyz Republic of June 2, 2008 #110) 

 

Chapter X 

The account and the reporting, documents of the Company. 

The information on the Company 

 

Article 79. Accounting and financial reporting of the Company 

 

1. The company shall be obliged to maintain accounting and to represent the financial reporting according to the legislation of the Kyrgyz Republic on the accounting and auditing. 

2. The responsibility for organization, status and reliability of accounting in the Company, duly submission of the financial reporting to the appropriate bodies, and also data on the activity of the Company, represented to shareholders, creditors and in mass media, shall be carried by the executive body of the Company according to this Law, other normative legal acts of the Kyrgyz Republic, the charter of the Company. 

3. The annual report of the Company shall be subject to the preliminary approval by Board of Directors of the Company no later than 30 days prior to the annual general meeting shareholders. 

 

Article 80. Storage of documents of the Company 

 

The Company shall be stored all its documents according to the legislation of the Kyrgyz Republic. 

 

Article 81. Providing of the information by the Company 

 

1. The information on the Company shall be provided according to requirements of this Law and other normative legal acts of the Kyrgyz Republic and the charter of the Company. 

2. The open company with more than 500 shareholders or which has publicly placed at least 1 issue of securities shall be obliged annually, within 2 months after annual meeting of shareholders, but no later than July, 1 of the year following for accounting one, to publish the annual report on financial and economic activity of the Company in mass media. 

(As amended by the Law of the Kyrgyz Republic of April 13, 2012 #39) 

 

Article 82. Providing of the information by the Company to shareholders 

 

1. The Company shall provide the shareholders with access to the following documents: 

- constituent documents of the Company, changes and the additions brought in constituent documents of the Company; 

- certificate on the state registration (re-registration) of the Company; 

- certificate on the state registration of releases of securities of the Company; 

- internal documents of the Company; 

- annual, quarterly and other reports submitted to the state bodies; 

- prospectuses of issues of securities of the Company; 

- minutes of general meetings of shareholders of the Company, sessions of the Board of Directors of the Company, the auditing committee (auditor) of the Company; 

- lists of affiliated persons of the Company with indication of the number and a category of shares belonging to them; 

- conclusions of the audit committee (an auditor) of the Company, the auditor of the Company, the state financial control; 

- other documents stipulated normative legal acts of the Kyrgyz Republic, the charter of the Company, internal documents of the Company, decisions of the general meeting of shareholders, the Board of Directors of the Company; 

- materials relating to the material facts in the financial and economic activities of company, including on major transactions and transactions in which there is an interest of persons referred to in article 75 of this Law. 

2. At the demand of the shareholder the Company shall be obliged to issue copies of documents stipulated by paragraph 1 this article of other documents of the Company, stipulated by normative legal acts of the Kyrgyz Republic. The amounts of payment shall be established by the Company and should not exceed the cost of charges on manufacturing copies of documents and the payment of expenses on sending by mail. 

(As amended by the Law of the Kyrgyz Republic of June 2, 2008 #110) 

 

Article 83. Obligatory publication of information by the Company 

 

1. The Company besides the data specified in paragraph 2 of article 81 of this Law shall be obliged to publish: 

- information on the order and place of acquaintance of potential investors with the prospectus of issue of shares of the Company in cases stipulated by normative legal acts of the Kyrgyz Republic; 

- notification on the general meeting of shareholders in the order stipulated by this Law; 

- other data established by authorized state body of the Kyrgyz Republic, regulating the securities market. 

2. The Company, including a closed company, in case of public placement of bonds or other securities by shall be obliged to publish the information in the volume and the order established by the legislation of the Kyrgyz Republic. 

(As amended by the Law of the Kyrgyz Republic of April 13, 2012 #39) 

 

Article 84. Information about affiliated persons of the Company 

 

1. Affiliated persons of the Company shall be obliged to notify in writing the Company and the authorized state body of the Kyrgyz Republic regulating the securities market on shares of the Company belonging to them with indication of their amount and categories no later than 10 days from the date of purchase of shares. 

2. If in result of failure to provide the specified information through the fault of affiliated persons or overdue submission the property damage is caused to the Company, the affiliated person shall bear responsibility before the Company in the amount of cost of the damage caused. 

 

Chapter XI 

Final provisions 

 

Article 85. The order of effectuation of this Law 

 

1. To effectuate this Law from the moment of publication. 

It is published in the newspaper “Erkintoo” of April 8, 2003 #25. 

 

For joint-stock companies within 1 year from the moment of publication of this Law to bring charters of the Company into compliance with this Law. 

2. In case of contradiction of the norms contained in this Law with other laws, provisions of this Law shall apply. 

3. To recognize the following invalid from the moment of introduction of this Law: 

- articles 52-79 of Chapter 4 of Section 2 of the Law of the Kyrgyz Republic “On economic companies and societies” of November 15, 1996, # 60; 

- paragraphs 6-11 of Article 2 of the Law of the Kyrgyz Republic “On Amendments and modifications to the Certain Acts of the Kyrgyz Republic” of December, 2, 1998, # 148; 

- paragraphs 2-6 of article 6 of the Law of the Kyrgyz Republic "On Amendments and Additions in Certain Acts of the Kyrgyz Republic" of November 27, 1999, # 131. 

4. For the Government of the Kyrgyz Republic: 

- to bring the resolutions into compliance with this Law; 

- to adopt necessary legal acts on the issues related by this Law to the competence of Government of the Kyrgyz Republic; 

- to submit proposals to the Jogorku Kenesh of the Kyrgyz Republic on bringing the legislation of the Kyrgyz Republic into conformity with this Law. 

 

President of the Kyrgyz Republic A.Akaev 

 

Adopted by the Legislative Assembly 

of the Jogorku Kenesh of Kyrgyz Republic January 28, 2003