LAW OF THE REPUBLIC OF KAZAKHSTAN

of July 21, 1999 No. 450-I

About rural consumer cooperation in the Republic of Kazakhstan

This Law determines legal status and governs the public relations between unitholders and rural consumer cooperatives and their associations (unions); determines procedure for creation, reorganization and liquidation of rural consumer cooperatives and their associations (unions); rights, obligations, conditions of protection of the rights and interests of unitholders and the third parties; powers and responsibility of bodies of rural consumer cooperatives and their associations (unions).

Chapter 1. General provisions

Article 1. Legislation on rural consumer cooperation

The legislation of the Republic of Kazakhstan on rural consumer cooperation is based on the Constitution of the Republic of Kazakhstan, the Civil code and consists of this Law and other regulatory legal acts.

Article 2. The basic concepts used in this Law

In this Law the following concepts are used:

rural consumer cooperative - the voluntary consolidation of citizens and (or) legal entities on the basis of membership for satisfaction of material and other needs of the members performed by consolidation by his members of property (share) fees;

the cooperative site - the site in which certain number of unitholders is integrated and which can be created on the territorial or other sign determined by the charter of rural consumer cooperative;

the representative of rural consumer cooperative - the unitholder elected at meeting of unitholders of the cooperative site and given authority to resolve issues on general meeting of representatives of rural consumer cooperative;

general meeting (meeting of representatives) - the supreme body of management of rural consumer cooperative;

association (union) of rural consumer cooperatives - voluntary merging of rural consumer cooperatives on the basis of decisions of general meetings of rural consumer cooperatives for ensuring protection of their common property and other laws, coordination of activities, representation of their interests in state bodies, local government bodies and the international organizations, and also rendering legal, information and other services to the members;

system of rural consumer cooperation - rural consumer cooperatives and their associations (unions);

the unitholder - the citizen (legal entity) who brought property (share) fee and accepted by the member of consumer rural cooperative in the procedure provided by the charter;

property (share) fee - fee of the unitholder in share fund of rural consumer cooperative;

share fund - the fund consisting of the property (share) fees brought by unitholders during creation of rural consumer cooperative or the introduction in it and being one of sources of forming of property of rural consumer cooperative;

the reserve fund - fund which is intended for covering of the losses caused as a result of force majeure procedure for forming and which use is determined by the charter of rural consumer cooperative or association (union);

the indivisible fund - the fund created at the expense of part of net income, rural consumer cooperative procedure for forming and which use is determined by the charter of rural consumer cooperative;

representatives of members of association (union) of rural consumer cooperatives - the authorized persons on behalf of rural consumer cooperatives chosen on general meeting for participation in work of general meeting of representatives of members of association (union) which includes this rural consumer cooperative.

Article 3. Basic principles of creation and activities of rural consumer cooperatives and their associations (unions)

Rural consumer cooperatives and their associations (unions) function on the basis of the following principles:

voluntariness of the introduction and exit from membership;

obligation of payment of the property (share) and membership fee;

democratic character of management;

mutual assistance and protection of interests of rural population;

availability of information on activities of cooperative, association (union) to all his members.

Article 4. Rural consumer cooperative

1. Rural consumer cooperative the voluntary consolidation of citizens on the basis of membership for satisfaction of material and other needs of members (unitholders) performed by consolidation by his members of property (share) fees is recognized.

Legal entities can be members of rural consumer cooperative also.

2. Rural consumer cooperatives are non-profit organizations and can be engaged in business activity only so far as it answers their authorized purpose.

3. Rural consumer cooperatives are created at the expense of property (share) fees for implementation of the trading, procurement, sales, overworking, servicing, supplying and other activity which is not prohibited by the legislation.

4. Rural consumer cooperatives can be created for satisfaction of material and other requirements not only the members, but also other citizens living in the rural zone.

5. The rural consumer cooperative is considered created sine die if constituent documents do not provide that it is created for certain term or for achievement of particular purpose.

Article 5. Name of rural consumer cooperative

The rural consumer cooperative has the name which shall contain the name of cooperative, and also the words "rural consumer cooperative". Under such name the cooperative is subject to state registration. The cooperative has the right to use also reduced name form.

Article 6. Location and address of rural consumer cooperative

1. The location of rural consumer cooperative the location of its permanent executive body is recognized.

2. In case of change of the location the rural consumer cooperative shall inform on it the body performing state registration of legal entities to the actual address of rural consumer cooperative for entering of necessary changes into the National register of business and identification numbers.

Article 7. Legal capacity of rural consumer cooperative

1. The rural consumer cooperative is legal entity and has the following competences:

be engaged in the activities directed to requirements satisfaction of unitholders;

perform business activity so far as it serves goal achievement for the sake of which it is created;

have the branches and representations according to the procedure, established by the legislation of the Republic of Kazakhstan and provided in the charter of cooperative;

attract additional shares from unitholders and borrowed funds from other citizens and legal entities;

perform foreign economic activity according to the procedure, established by the legislation of the Republic of Kazakhstan;

appeal judicially acts of state bodies, acts of municipalities of domicile, the actions of their officials violating the rights of consumer cooperative;

perform other rights of the legal entity necessary for goal achievement, provided by the charter of rural consumer cooperative.