RESOLUTION OF THE PLENUM OF THE SUPREME COURT OF THE REPUBLIC OF UZBEKISTAN

of December 11, 2013 No. 20

About some questions of court practice on the cases connected with business activity

Due to the questions which arose in court practice by hearing of cases, connected with business activity, being guided by article 17 of the Law "About Courts", the Plenum of the Supreme Court of the Republic of Uzbekistan decides:

1. Explain to courts that according to article 65 of the Constitution of the Republic of Uzbekistan, the state creates conditions for development of the market relations and fair competition, guarantees freedom of economic activity, entrepreneurship and work taking into account priority of the rights of consumers.

Proceeding from sense of this constitutional regulation, everyone has the right to free use of the capabilities and property for entrepreneurial and other, not prohibited by the law economic, activities.

The individual entrepreneurship under the law is understood as implementation of business activity by physical person independently, without formation of legal entity.

3. Courts should mean that for recognition of any activities of person entrepreneurial availability of two circumstances - systemacity of the made actions directed to profit earning, and implementation of such activities as the main, i.e. professional is obligatory.

Owing to this fact it is impossible to recognize as entrepreneurs and to require state registration in such quality of persons concluding one-time bargains of civil nature even if several facts of making of such transactions are determined (for example, delivery of premises or real estate in lease (employment), sale of personal belongings, production occasionally of various jobbing according to the works agreement or orders for a fee, etc.). Accomplishment of obligations according to the employment contract (contract) is not business activity.

According to the legislation also some types of professional activity (private practice) are not considered as entrepreneurship. So, lawyers are not recognized entrepreneurs.

The list of types of activity in which individual entrepreneurs can be engaged is determined by the Cabinet of Ministers of the Republic of Uzbekistan.

perform any activities which are not forbidden by the legislation;

own, use and dispose of the property belonging to them on the property right;

to independently choose the directions of the activities, suppliers and consumers of the goods (works, services);

gain income (profit) on entrepreneurship in the unrestricted size, except for the subjects of business activity holding dominant position on commodity market (works, services);

realize the goods (works, services), production wastes at the prices and rates established independently proceeding from market situation or on contractual basis, except as specified, stipulated by the legislation;

it is free to dispose of the income (profit) remaining after covering of all production costs, tax payments and charges, except as specified recovery by enforcement judicially;

be founders (participants) of other subjects of entrepreneurship who are the legal entity;

perform foreign economic activity;

obtain the credits, raise on contractual conditions money and other property of other legal entities and physical persons, including acquire and receive gratuitously, in lease (leasing) of the building, construction, the equipment and other property and to direct them to implementation of business activity.

Subjects of business activity can have and other rights according to the legislation.

In particular, Chapter XVI1 of the Code of the Republic of Uzbekistan about the administrative responsibility (further in the text - KOAO) for hindrance, illegal intervention in business activity establishes the administrative responsibility. At the same time it is necessary to understand as hindrance of legal business activity:

illegal restriction and (or) deprivation of the property right, infringement of private property, imposing to the owner of obviously unacceptable conditions (article 241-1 KOAO);

forced involvement of subjects of entrepreneurship to charity and other actions connected with derivation of money and other material values (article 241-4 KOAO);

violation of established procedure and terms of licensing and other documents of allowing nature (article 241-5 KOAO);

illegal refusal, non-use or hindrance in application of privileges and preferences (article 241-6 KOAO);

illegal refusal in rendering the state service or evasion of its provision (article 241-9 KOAO);

demolition of the buildings, other structures, constructions or plantings on the withdrawn parcel of land belonging to subjects of entrepreneurship without preliminary and full recovery of losses on market value of the specified property (article 241-11 KOAO).

Persons which allowed illegal intervention in activities of business entities are subject to responsibility under the relevant articles of Chapter XVII of KOAO (intentional initiation and (or) conducting checks, suspension of operations of business entities and (or) transactions according to bank accounts; reclamation of information on availability of money on accounts of business entities in cases, not stipulated by the legislation etc.).

The officials who made the similar actions directed to hindrance, illegal intervention in business activity after application of administrative punishment are subject to criminal prosecution (Article 192-1 - 192-8 UK);

See the previous edition.

7. Illegal business activity can be expressed, as a rule, in the form of implementation of business activity:

without registration;

without license, document of allowing nature, without notice authorized body;

receipts of the document of allowing nature with use of false documents;

provisions in authorized body of false or unreliable information about fulfillment of requirements and the conditions established for implementation of activities (actions) in notifying procedure;

with violation of conditions of licensing.

Illegal business activity without registration is understood as implementation of business activity in cases when in the state register of legal entities and the state register of individual entrepreneurs there is no record about creation of such legal entity or acquisition of the status of the individual entrepreneur by physical person or record about liquidation of the legal entity or the termination of activities of physical person as the individual entrepreneur contains.

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