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Article 39. The Location of a Legal Entity

amended by (12) Law of No. 211 of 2nd March 1998 of the Republic of Kazakhstan. Concerning the Introduction of Amendments and Additions to the Civil Code of the Republic of Kazakhstan (General Part), and to the Decree of the Supreme Soviet of the Republic of Kazakhstan "Concerning the Implementation of the Civil Code of the Republic of Kazakhstan (General Part)".

1. The place where the permanently operating body of a legal entity is situated shall be recognised as the location of that legal entity.

2. The location of a legal entity shall be indicated in its foundation documents with the inscription of its full address.

3. In its relations with third parties a legal entity shall not have the right to refer to non-compliance of its actual address to the address entered into the state register. In this respect, third parties shall have the right to sent to a given legal entity postal and other correspondence both to the address entered into the state register, and to its actual address.

Article 40. The Foundation Parties of a Legal Entity

1. A legal entity may be founded by one or several foundation parties.

2. The owners of the property, or the bodies and persons authorised by them, and in the cases specifically provided for by legislative acts, any other legal entities may be foundation parties of a legal entity. In that respect, the legal entities who own the property under the right to business authority or operational management, may be foundation parties of other legal entities after the approval of their owner or the body authorised by their owner.

Article 41. Foundation Documents of a Legal Entity

[as amended by (4) Law No. 30 - I of the Republic of Kazakhstan. Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan. July 15, 1996; and

(8) Law of 19th June 1997 of the Republic of Kazakhstan. Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan]

(11) Law of 11th July 1997 of the Republic of Kazakhstan. Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan Concerning Issues of Banking Activity;

(12) Law of No. 211 of 2nd March 1998 of the Republic of Kazakhstan. Concerning the Introduction of Amendments and Additions to the Civil Code of the Republic of Kazakhstan (General Part), and to the Decree of the Supreme Soviet of the Republic of Kazakhstan "Concerning the Implementation of the Civil Code of the Republic of Kazakhstan (General Part)";

(13) Law No. 221 of 22nd April 1998 of the Republic of Kazakhstan. Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan; and

(15) Law No. 282 of 10th July 1998 of the Republic of Kazakhstan. Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan Concerning Issues of Joint-Stock Companies.

1. A legal entity shall carry out its activities on the basis of its Charter or the Foundation Agreement and the Charter, unless it is otherwise provided for by legislative acts. In the cases specified by legislative acts, a legal entity which is not a commercial organisation, may operate on the basis of general regulations concerning the organisations of that type.

A legal entity which is a small business may carry out its activities on the basis of the Model Articles the content of which is defined by the Government of the Republic of Kazakhstan.

2. The foundation agreement of a legal entity shall be entered into and its charter shall be approved by its foundation parties. No foundation agreement shall be entered into when a commercial organisation is established by one person.

3. The foundation documents of a non-commercial organisation and of a state-owned enterprise, must define the objects and aims of the activities of that legal entity.

Foundation documents of a business partnership, joint-stock company and a production co-operative may provide for the objects and purposes of their activity.

4. In the foundation agreement parties (foundation parties) undertake to create a legal entity, and they define the procedure for their joint activities to create it, the conditions for the vesting into its ownership (business authority, operational management) of their property and for their participation in its activities. The agreement shall also define the terms and procedure for the distribution of net income between the foundation parties, management of the business of the legal entity, exit of foundation parties from it, and the agreement shall approve its charter, unless it is otherwise provided for by this Code or legislative acts concerning specific types of legal entities.

Any other provisions may be included into a foundation agreement, based on the consensus of the foundation parties.

5. Name, location, procedure for the formation and the authority of its bodies, provisions concerning the reorganisation and termination of its activities shall be provided for by the charter of a legal entity.

When a legal entity is established by one person, then a procedure for the formation of the property and for the distribution of profits shall also be defined in its charter.

Other provisions may be specified in a charter, which do not contradict legislation.

6. In the case of contradictions between the foundation agreement and the charter of the same legal entity, their provisions must apply as follows:

1) those of the foundation agreement, when they are associated with internal relationship of foundation parties;

2) those of the charter, when their application may have significance for relations of the legal entity with third parties.

7. Any interested parties shall have the right to peruse the charter of a legal entity.

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