• Как много дел считалось невозможными, пока они не были осуществлены.

    Плиний Старший

  • Чего не следует делать, того не делай даже в мыслях.

    Эпиктет

  • Если осталось еще что-нибудь доделать, считай, что ничего не сделано.

    Лукан

  • Измени отношение к вещам, которые тебя беспокоят, и ты будешь от них в безопасности.

    Марк Аврелий

  • Лучше думать перед тем, как действовать, чем после.

    Демокрит

  • Недостаточно обладать мудростью, нужно уметь пользоваться ею.

    Цицерон

How to Sell a Business How to Buy a Business LLP in KAZAKHSTAN

How to Sell a Business How to Buy a Business LLP in KAZAKHSTAN

The sale and purchase of a share (part of a share) in the share capital of a LLP can be conditionally divided into several stages.

The first stage is financial and legal audit (Due Diligence).

Before investing in any legal entity is considered rational to first examine the buyer (investor) certain documents relating to the activities of the legal entity. We assume that seller and buyer are affiliated companies and all documents provided are initially reliable.

The second stage-coordination with the participants of LLP sale of shares to third parties.

According to the current legislation of Kazakhstan, if the number of participants of LLP is two or more persons, with the intention to sell one of the participants of its share or part of the authorized capital of LLP to third parties, the participant must first offer the rest of the participants of the LLP to purchase its share (part of the share), as To do this, the participant-seller undertakes to notify in writing the Executive body (Director) of the partnership with an indication of the estimated sale price of the share (part of the share), which, in turn, within seven days from the date of receipt of the notification must notify the other participants of LLP. The participant (s) who wishes to exercise the pre-emptive right to purchase the share (part of the share) from the selling participant must notify the Executive body of the partnership within seven days, indicating the volume of acquisition of the share (part of the share), or report the unwillingness of such purchase.

If within one month from the date of sending to the Executive body of the partnership notice of the offer of the share (part of the share) for sale the share (part of the share) will not be redeemed by the participant of LLP in the exercise of the pre-emptive right, the participant-seller has the right to sell the share (part of the share) to third parties. In this case, the participant-seller shall not be entitled to sell its share (part of the share) to third parties at a price lower than that offered to other participants of this partnership. In case of violation of this rule, the participant within three months from the date of sale of the share (part of the share) has the right to demand in court to transfer to him (them) the rights and obligations of the buyer.

The third stage is to check the possibility of selling the share to third parties.

In some cases, when there are two or more persons participating in an LLP, the founding documents of the LLP may prohibit or limit the sale by the participant of the partnership of its share (part of the share) to third parties. In such cases, the sale of the share (part of the share) may be made only to the other participants of the LLP or to a limited number of third parties specified in the founding documents of the LLP.

If the sale by the participant of his share (part of the share) cannot be made due to the circumstances that do not depend on the will of the participant-seller, then this participant has the right to demand from the partnership itself to buy out the sold share (part of the share), or to allow the participant-seller to sell the share (part of the share) to third parties. In this case, the General meeting of participants of LLP undertakes to make a choice and make an appropriate decision on this issue.

Moreover, the buyer (investor) should pay attention to the founding documents of LLP, which may set a limit on the maximum size of the share that may belong to one participant LLP. In this regard, prior to the acquisition of a share (part of the share) in the authorized capital of LLP, the buyer (investor) is recommended to clarify the presence or absence of such a restriction, and if it exists - to find out the volume of restrictions.

The fourth stage-preparation of documents for the sale of shares.

Purchase and sale of the share (part of the share) in the authorized capital of LLP between the participant-seller of LLP and the third party is made out by signing of the contract of purchase and sale of the share (part of the share). 

If a legal entity acts as a buyer and/or seller of a share (part of a share) in the authorized capital of an LLP, the authorized body of the legal entity shall make a decision on the purchase and/or sale of the share (part of the share) before signing the contract of sale.

On the basis of the signed purchase and sale agreement, the participant-seller of LLP transfers to the buyer its share (part of the share) in the authorized capital of LLP, and the buyer, in turn, pays him the cost of the share (part of the share) by transferring funds to the Bank account of the participant-seller.

If before the purchase and sale of the share (part of the share) LLP consisted of several participants, and in the case of sale by one of the participants of its share (part of the share) to a third party, then between the Executive body of the LLP and the new participant signed an agreement on accession to the Memorandum of Association, which is subject to notarization.

Changes and additions to the Charter of LLP or its new edition in connection with change of structure of participants of LLP are also signed by the participant of LLP. 

After the above actions, with the participation of a new participant, the decision of the General meeting of participants of LLP approves the amendments and additions to the Charter of LLP or its new edition. 

The fifths stage is the state re-registration of LLP.

The change in the composition of LLP participants entails the mandatory passage of the state re-registration procedure carried out by the Ministry of justice of the Republic of Kazakhstan and its territorial divisions (hereinafter - the Registration authority). 

For the state re-registration to the Executive body (Director) of LLP it is necessary within a month from the moment of acceptance by the General meeting of participants or the only participant of LLP of the decision on the approval of changes and additions in the Charter or new edition of the Charter to provide to registering body (through the Center of service of the population) the list of documents.

LEGAL ISSUES

The presence of a third party represented by LLP is not needed. The contract is concluded between the seller and the buyer. An essential condition of this type of contract is the size of the acquired share and its value.
 

After the conclusion of the share and purchase agreement, it is necessary to undergo the procedure of state re-registration of a legal entity in the authorized state body (documents can be submitted to the body at the place of registration of LLP.

In order to pass the procedure of state re-registration of a legal entity in the authorized state body, it is necessary to prepare the following documents:

1.    Standard application;

2.    Share purchase and sale agreement (original with notarized copy);

3.    Minutes of the General meeting of participants of LLP on re-registration in connection with the change of the participants, in which it is necessary to specify the contract of sale and the new participant (original);

4.    Legalized extract from the trade register or other legalized document certifying that the Buyer-a foreign legal entity is a legal entity under the legislation of a foreign state, with a notarized translation into Kazakh and Russian languages;

5.    Legalized extract from the trade register or other legalized document certifying that the Seller (member of LLP - a foreign legal entity is a legal entity under the laws of a foreign state, with a notarized translation into Kazakh and Russian languages;

6.    Payment of the state fee (the size of the state fee depends on which business entity belongs to LLP  small, medium, large). The minimum amount of the state fee is 2 MCI;

7.    Power of attorney for the representative of LLP, which will carry out the procedure of state re-registration. Identity card of the Trustee;

8.    Charter of LLP (original);

9.    Certificate of state registration (re-registration) of LLP or certificate (original).

10.    Also, the authorized body has the right to request additional documents, which is very rare.

We have sufficient experience in support of such transactions, from the preparation of document including Decision, Protocol, etc. to proceed on state re-registration.