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Article 108. Consumer Co-Operatives

as amended (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. A consumer co-operative shall be recognised as a voluntary association of citizens on the basis of the membership, for the satisfaction of their financial and or any other needs, which is implemented by way of its members uniting their property (share) contributions.

2. Members of a consumer co-operative shall be obliged within three months after the approval of the annual balance-sheet to cover the losses which form, by way of additional contributions. In the case of a failure to execute this obligation, the co-operative may be liquidated in a judicial procedure upon n demand of the creditors.

Members of a consumer co-operative shall jointly bear a subsidiary liability with regard to its obligations, within the limits of the unpaid amount of the additional contribution of the co-operative members.

3. The charter of the consumer co-operative must contain, aside from the information indicated in the paragraph 5 of Article 41 of this Code, the conditions with regard to the size of the co-operative member shares; the composition and procedure for contribution of shares by the co-operative members and their responsibility for the violation the obligations associated with the contribution of the shares; concerning the composition and the authority of the governing bodies the co-operative and the procedure for adopting by them of the resolutions, including on the issues, the resolutions on which are to be adopted unanimously or by a qualified majority of votes; concerning the procedure for the compensation by the members of the losses incurred by the co-operative.

4. Income received by a consumer co-operative may not be distributed amongst its members and it shall be used on the charter purposes.

5. In the case of the liquidation of a consumer co-operative, or in the case of departure from it of a co-operative member, he shall have the right to appropriate his share in the assets of the consumer co-operative in proportion to his share. In the case of demise of a co-operative member, his legatees shall have the priority right to be accepted as members of the co-operative, unless otherwise stipulated in the co-operative charter. If the latter is the case, the co-operative shall pay to the legatees the share in the property of the consumer co-operative, in proportion to his share.

6. The legal status of the consumer co-operative, and also the rights and obligations of its members, shall be determined by legislative acts in accordance with this Code.

7. Rural consumer co-operatives may be created for the satisfaction of financial and any other needs of not only their members, but other citizens as well, who reside in rural areas. Special considerations in the rural consumer co-operation shall be determined by special-purpose legislation in compliance with this Article.

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