December 3, 2021
General meeting of LLP participants: features and procedure for making decisions
- Applicable law: regulatory legal acts
- General meeting of participants: types and competence of the GMP
- The procedure for making decisions by the general meeting of participants
1. Applicable law: regulatory legal acts
The general meeting of participants is the highest body in the structure of a limited liability partnership. The competence of the bodies of a limited liability partnership, the procedure for making a decision or speaking on behalf of a limited liability partnership are determined by the charter of the limited liability partnership and the following regulatory legal acts:
– Civil the code Of the Republic of Kazakhstan dated December 27, 1994.
– Law Of the Republic of Kazakhstan dated April 22, 1998 No. 220-I “On limited and additional liability partnerships”.
– Regulatory decree Of the Supreme Court of the Republic of Kazakhstan dated July 10, 2008 No. 2 “On some issues of the application of legislation on limited and additional liability partnerships.”
2. General meeting of participants: types and competence and rights of the GMP
There are two types of frequency of convening a general meeting of participants in a limited liability partnership (hereinafter referred to as the GMP):
- the next GMP → convened by the executive body, the term of convocation is set in the charter (! at least once a year);
- extraordinary GMP → convened by the executive body / supervisory board or the audit commission / participants of the partnership, who collectively own 10% or more of the total number of votes
Each LLP participant has the right to:
– attend the general meeting;
– take part in the discussion of issues on the agenda (you can through an attorney);
– vote when making decisions (number of votes = number of shares, unless otherwise provided by the charter).
The charter of the LLP determines the competence of the general meeting of participants.
GMP has the right:
– to take into consideration any issue related to the activities of the partnership, regardless of whether the issue falls within the competence of the GMP, according to the charter;
– cancel any decision of other LLP bodies on issues related to the internal activities of the partnership, unless otherwise specified by the charter.
However, the law establishes a number of issues that fall within the exclusive competence of the GMP:
1) changes in the charter of a partnership, including a change in the size of its charter capital, location and company name, or approval of the charter of the partnership in a new edition;
2) the formation of the executive body of the partnership and the early termination of his powers or the powers of a separate member of the executive body, as well as making a decision on transferring the limited liability partnership or its property into trust management and determining the conditions for such transfer;
3) election and early termination of the powers of the supervisory board and (or) the audit commission (auditor) of the partnership, as well as approval of reports and conclusions of the audit commission (auditor) of the partnership;
4) approval of financial statements and distribution of net income;
4-1) determination of an audit organization for auditing the annual financial statements of a partnership, for which an audit in accordance with Article 59 of this Law is mandatory;
5) approval of internal rules, procedures for their adoption and other documents regulating the internal activities of the partnership, except for documents, the approval of which by the charter of the partnership is attributed to the competence of other bodies of the partnership;
6) the decision on the participation of the partnership in other business partnerships, as well as in non-commercial organizations;
7) the decision on the reorganization or liquidation of the partnership;
8) appointment of a liquidation commission and approval of liquidation balance sheets;
9) the decision on the compulsory redemption of a share from a participant in the partnership in accordance with article 34 of this Law;
10) the decision on the pledge of the entire property of the partnership;
11) the decision to make additional contributions to the property of the partnership in accordance with article 39 of this Law;
12) approval of the procedure and terms for providing participants in the partnership and acquirers of shares of information on the activities of the partnership;
13) the decision on approval of the conclusion by the limited liability partnership of a transaction or a set of interrelated transactions, as a result of which (which) the partnership alienates (may be alienated) property, the value of which is fifty-one or more percent of the total book value of the assets of the limited partnership responsibility.
3. The procedure for making decisions by the general meeting of participants
At the general meeting of participants, decisions are made only on those issues that are included in the agenda and with due notification of the participants in the partnership.
The decision of the GMP is considered adopted if the participants with the required number of votes voted for it. It is important to remember that the number of votes is the number of participants, and the number of votes is directly proportional (=) to the size of the participant’s share.
A qualified majority of votes is sufficient to make a decision on the following issues:
- changes in the charter of a partnership, including a change in the size of its charter capital, location and company name, or approval of the charter of a partnership in a new edition;
- decision on the reorganization or liquidation of the partnership;
- a decision on the compulsory redemption of a share from a participant in the partnership that has caused significant damage to the partnership;
- decision on the pledge of all property of the partnership;
- other decisions for the adoption of which the charter provides for the presence of a qualified majority.
** Qualified majority of votes: 3/4 (75%) and more votes of those present or represented by the LLP participants.
When deciding on the compulsory redemption of a share, a participant who has caused damage to the partnership, whose share is redeemed forcibly, does not participate in the voting and the number of votes belonging to him is not taken into account in the count.
The rest of the decisions are taken by a simple majority of votes (more than 50%) of those present and represented at the general meeting of the participants of the partnership, if the charter of the partnership does not require a larger number of votes or unanimity for their adoption.
Decisions of the general meeting of participants in a limited liability partnership are adopted by open voting, unless the charter of the partnership or the rules and other documents regulating the internal activities of the partnership provide for secret voting.
The decisions of the general meeting must be taken by secret ballot also in cases when it is required by the participants in the partnership holding at least one fifth of the total number of votes.
In the case of a secret ballot, the voting procedure must ensure accurate counting of votes and the reliability of the voting results.