UZBEKISTAN Law and Practice Contributed by: Nodir Yuldashev, GRATA International law firm
9. Exit Strategies and Termination 9.1 Termination of a JV Voluntary liquidation of the JV can be initiated by the shareholders at any time. Liquidation can also be initi - ated by following internal corporate agreements and arrangements, for example, if the JV has been estab - lished for a specific reason, such as a PPP project, or the JV has been established for a specific period of time. In order to initiate voluntary liquidation of the JV, the shareholders should make a decision on liquidation and appoint a liquidator. As a rule, the liquidator conducts an audit and inven - tory of the company to prepare the company for liqui - dation and approves a liquidation plan that describes liquidation stages, which usually include: • filing for liquidation to the Public Service Centre (taxes stop being accrued); • inventory of contracts with customers; • inventory of contracts with suppliers; • termination of employment agreements; • termination of contracts with customers and sup - pliers; • settling accounts payable and receivable; • organising a tax audit; • settlement of disputes and debts with tax authori - ties; • collection of confirmation of absence of debt from tax authorities, customs authorities and the bureau for enforcement of judicial decisions; • distributing all documents, remaining property and money among shareholders; • submission of all mandatory documents to the state archive; • closing bank accounts; and • submission of final documents to the Public Ser - vice Centre and receipt of confirmation of liquida - tion.
Uzbek law prescribes the entire liquidation procedure to be finished no later than within six calendar months, however, this term is hardly ever complied with due to difficulties in organising a tax audit on time. 9.2 Asset Redistribution and Transfers In accordance with the laws regulating the activities of LLCs and JSCs, all property remaining in the course of liquidation after all debts of the JV have been paid should be distributed among shareholders proportion - ately to their shares in the share capital. In specific situations, shareholders may agree on special terms of distribution of any remaining property in corporate agreements. 9.3 Exit Strategy Article 8 of the Law on LLCs establishes a guaran - teed right of every shareholder to exit a JV at any time regardless of other shareholders’ consent. The Law also indicates that the exit shall be made in a manner as established by the Law on LLCs and by internal corporate arrangements – ie, provisions of corporate agreements and constituent documents. The general rule for exit from an LLC if no internal procedure is approved is that any shareholder may file for exit and receive the actual cost of their share/s within one cal - endar year from the date of exit.
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