Uzbekistan: Corporate Structure In LLC

Last Updated: 19 April 2017
Article by Kosta Law Firm

This brief summary outlines the key provisions of the Uzbek Law on Limited and Additional Liability Companies No. 310-II of 6 December 2001 (the 'Law') with respect to a corporate governance structure of limited and additional liability companies (the 'Company') and competencies of each of the corporate governing bodies.

Pursuant to Chapter IV of the Law, the Company may have the following corporate governing bodies:

General Meeting of Participants the supreme governing body consisting of participants or their representatives;
Supervisory Board may be established within the Company at the discretion of participants. Due to uncertainty in the Law, there is a presumption that the Supervisory Board must be established when the book value of Company's assets exceeds UZS 1 bln.
General Director or Board of Directors is an executive body responsible for day-to-day management of the Company. The Law does NOT permit attracting a third party – legal entity to undertake the management functions.
Internal Audit Service must be established under the Company's Supervisory Board when the book value of Company's assets exceeds UZS 1 bln for the implementation of internal control.


The Law provides for the following exclusive authorities of the General Meeting. These authorities cannot be vested to the Supervisory Board of the Company or its General Director.

Exclusive competences Number of votes necessary to make decisions
Unanimously 2/3 votes Simple majority
Approving monetary assessment of in-kind contributions to the Charter Fund by the Participants and/or third parties;
Inserting, amending or repealing provisions on shareholding limits or proportionality of shareholdings;
Increasing the charter capital by additional contributions of participants or acceptance of a third party;
Inserting, amending or repealing provisions on disproportional use of pre-emptive right in the case of a sale of share;
Selling shares of withdrawn participants held by the Company;
Taking decisions on establishing other legal entities, representative offices and branches.
Defining the main directions of Company's activities, as well as taking decisions on participation of the Company in other associations of commercial organizations;
Increasing of the charter capital in cases other that stated above.
Amending the foundation documents;
Appointment and dismissal of members of the revision commission (in case it is decided to form the revision commission of the Company);
Appointment and dismissal of members of the Supervisory Board;
Approval of annual reports and annual balance sheets;
Taking decisions on distribution of net profit of the Company among the Participants;
Approval of documents regulating the activity of the bodies of the Company;
Taking decisions on audit of the Company, selection of an auditor and setting limits of payment for its services;
Taking decisions on establishing other legal entities, representative offices and branches;
Taking decisions on reorganization and liquidation of the Company;
Appointment of a liquidator and approval of liquidation balance sheets;
Taking decisions on entering into large transactions the total cost of which exceeds 25% (or 50% if the Supervisory Board is established) of Company's assets;
Approval of transactions exceeding 5% (five percent) of Company's assets in which some Participants of the Company, members of Supervisory Board, and/or the members of the Executive Body are considered to be interested parties;
Limiting the maximum amount of shares that a Participant may own as well as making decision on changing the ratio of shares of Participants;
Making decisions on giving its consent to a Participant to pledge its share in the Charter Fund to third parties;
Making decision on the procedure for the use of preliminary right to purchase Shares proposed to third parties by the remaining Participants not pro rata their Shares in the Charter Fund;
Decision on paying out the real values of the Participant's Share to which the recourse is being taken to the creditors of the Participant, by the other Participants;
Taking decisions on other issues as provided by the Constitutional Documents and the Applicable Laws.


The Supervisory Board is established and members of the Supervisory Board are elected by the General Meeting. Provided that the Supervisory Board is established at the Company, its competences may embrace the following:

  1. appointment and dismissal of the Executive Body;
  2. establishment of Internal Audit Service and hearing of its reports;
  3. consideration of the issues to be proposed to the General Meeting;
  4. approval of transactions not exceeding 5% of the Company's assets in which some Participants of the Company, members of Supervisory Board, and/or the members of the Executive Body are considered to be interested parties;
  5. taking decisions on entering into a large transaction, the total cost of which exceeds 25% (twenty five percent), but not more than 50% (fifty percent) of Company's assets at the date of the proposed large transaction.

If the Supervisory Board is established, the manner of taking decision shall be provided for in the Company's Charter.


The Executive Body (whether it be the General Director or the Board of Directors) is responsible for day-to-day management of the Company. The following decisions are usually made by the Executive Body:

  1. carry out the day-to-day management of the Company; represent it in any contacts with other legal entities and individuals as well as with state authorities of the Republic of Uzbekistan within the country as well as abroad;
  2. act without special power-of-attorney on behalf of the Company and execute contracts and other transactions and assure their fulfillment;
  3. administer the property of the Company including cash funds, within the scope of authority, defined by this Charter, issue power-of-attorney for representing the Company;
  4. prepare annual budget and business plan to present for consideration to the Supervisory Board;
  5. develop the staff rules and staff roll;
  6. hire and dismiss employees of the Company, take measures in relation to incentives and penalties;
  7. issue orders and instructions;
  8. open bank accounts for the Company;
  9. prepare annual balance sheets, profit and loss reports for the approval by the General Meeting;
  10. prepare and make mid-year reports on the results of the activities of the Company for consideration of the Supervisory Board.

If the Board of Directors is established as the Executive Body, the manner of taking decision shall be provided for in the Company's Charter.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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