UZBEKISTAN Law and Practice Contributed by: Nodir Yuldashev, GRATA International law firm
• receipt of financing or settling financial obligations by any of the shareholders or the target company; and • any other contractual arrangement which may be requested by partners depending on the situation. Uzbekistan corporate law and contract law are quite liberal in terms of negotiation and approval of con - tractual agreements. Article 354 of the Civil Code, for example, approves the principle of freedom of con - tract, which is also reaffirmed by the Law on Guaran - tees of Freedom of Entrepreneurial Activity. Therefore, negotiating parties frequently employ various legal instruments, including material adverse change and force majeure not only in business and commercial contracts, but also in corporate agreements. 5.4 Legal Formation and Capital Requirements As a general rule, no minimum capital contribution requirements exist to establish an LLC or a JSC in Uzbekistan. Although, specific documents regulat - ing issuance of particular licences may require mini - mal amounts of share capital or minimal amounts of capital contributions to be made by shareholders, for example, shareholders of private universities must form a share capital equal to USD2 million. Uzbekistan law introduces the concept of an enter - prise with foreign investments. This kind of enterprise has additional fiscal and administrative benefits. In order to acquire the status of an enterprise with for - eign investments, a JV should have at least 15% of shares owned by a foreign legal entity or an individ - ual and have share capital in the amount exceeding UZS400 million (roughly USD30,000). 6. Core Terms of a JV Agreement 6.1 Drafting and Structure of the Agreement As mentioned, Article 354 of the Civil Code and the Law on Guarantees of Freedom of Entrepreneurial Activities provide quite a wide range for freedom of contract which is also applicable to joint-venture agreements (JVAs). With the introduction of Article 358-1 of the Civil Code, the legislator has allowed shareholders to execute corporate agreements and
approve the establishment of JVs, including manage - ment and operation rules. Regardless of its legal form, any typical JVA would usually be expected to cover the following issues: • list of shareholders; • CP for entry into force; • procedure for change of shareholders (exit, entry, and unilateral withdrawal); • amount of share capital and forms of contribution;
• additional financing; • audit of an enterprise; • option arrangements and agreements; • approval of business plans; • approval of transactions; • appointment of managers; • resolving deadlock situations;
• reorganisation of the JV; • liquidation of the JV; and • dispute resolution.
Depending on the project, JVAs may also contain any other provisions which the shareholders consider nec - essary to agree upon. 6.2 Governance and Decision-Making Assuming that the form of LLC is the most popular form for JVs in Uzbekistan, below is a list of three statutory regimes for making decisions by sharehold - ers in an LLC, which can be made stricter in the arti - cles of association, but not less-strict. Decisions Unanimously Adopted by the General Meeting of Shareholders • Decision to approve the charter of the company, as well as the monetary assessment of the contribu - tions made by the shareholders of the company (Article 10). • Decision to limit the maximum size of shares of a shareholder of the company, as well as to change the ration of shares of shareholders in the company (Article 14). • Decision to approve the monetary valuation of non-monetary contributions to the charter capital of the company made by the shareholders of the company and accepted by the third parties into the company (Article 15).
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