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LAW OF THE REPUBLIC OF TAJIKISTAN

of March 5, 2007 No. 237

About joint-stock companies

(as amended on 14-11-2016)

CHAPTER 1. GENERAL PROVISIONS

Article 1. Purposes of this Law

This Law determines legal status, procedure for creation, reorganization and liquidation of joint-stock companies, the rights, obligations, protection of the rights and interests of shareholders and the third parties, powers and responsibility of bodies and officials of joint-stock companies.

Article 2. Legislation of the Republic of Tajikistan on joint-stock companies

The legislation of the Republic of Tajikistan on joint-stock companies is based on the Constitution of the Republic of Tajikistan and consists of the Civil code of the Republic of Tajikistan, this Law and other regulatory legal acts of the Republic of Tajikistan, and also the international legal acts recognized by Tajikistan.

Article 3. Basic concepts

In this Law the following basic concepts are used:

- joint-stock company - the commercial organization which authorized capital is divided into certain number of shares their participants (shareholders) do not bear responsibility according to obligations of joint-stock company and bear probability of losses from its activities within cost of the stocks owned by them;

- the convertible bond - the security issued by joint-stock company which is subject to exchange for the share of this joint-stock company on the conditions established in case of release of the convertible bond;

- registry holder - the professional participant of the security market or the responsible person of joint-stock company performing activities for maintaining and storage of the register of shareholders;

- the nominee holder of the share - person, the professional participant of the security market who is not the owner of the share, representing the interests of the shareholder concerning its shares and enabling the realization of the rights on them on its own behalf and at the request of the owner based on the agreement;

- authorized body - the state body performing state regulation of the relations developing in the security market;

- the dividend - the part of net profit of joint-stock company distributed among shareholders it is pro rata to number of shares;

- the placed share - the share which is in circulation in the security market. The number of these shares is determined by difference of total quantity of the shares and shares which are on balance of the most joint-stock company;

- the preferred cumulative share - the share which dividends remained not paid for the lack of profit of joint-stock company, but are subject to payment in the years ahead;

- the bearer share - the share which name and surname of the holder are not specified in the shareholder register of joint-stock company and is recognized from the legal point of view the full-fledged shareholder of joint-stock company. Dividends by this type of shares are paid on presentation of shares;

- the nominal share - the share issued addressed to certain person and registered in the shareholder register of joint-stock company. Sale or transfer of nominal shares is performed under the transfer act (endorsement);

- the voting share - the share granting to the holder the right to vote at General shareholder meeting personally or through the authorized representative;

- public placement of the shares and bonds of joint-stock company converted into shares - share placing and the bonds of joint-stock company converted into shares among wide range of persons whose list and quantity cannot be in advance determined, by means of the public announcement, carrying out promotion company, the biddings;

- cumulative vote - method of vote in case of which on each share participating in vote, the number of votes equal to total number of members of collegiate governing body of joint-stock company is necessary;

- affiliates - the physical persons or legal entities capable to exert impact on activities of business entities. Affiliates of joint-stock company his officials (board members (Supervisory board), members of collegiate executive body) and the shareholder owning 20 and more percent of its voting shares are recognized;

- the authorized capital - the minimum capital of joint-stock company, at the time of its organization which size is established by this Law;

- the beneficial owner (beneficiary) - one or several physical persons which finally directly or indirectly has property (has more than 25 percent of the prevailing equity participation of the client or from total number of shares of the client with voting power) or really control the client and/or person in whose interests transaction/transaction, also persons controlling the legal entity is made.

Article 4. Legal status of joint-stock company

1. The joint-stock company is legal entity and performs duties, for implementation of activities, not prohibited by the legislation of the Republic of Tajikistan.

2. The joint-stock company can be engaged in separate types of activity which list is determined by the Law of the Republic of Tajikistan "About licensing of separate types of activity" only based on the license.

3. The joint-stock company is considered created as the legal entity from the moment of its state registration in the procedure established by the legislation. The joint-stock company is created without restriction of term if other procedure is not established by its charter. The joint-stock company has the right to open in accordance with the established procedure bank accounts for the territories of the Republic of Tajikistan and beyond its limits.

4. The joint-stock company is legal entity and has the isolated property considered on its separate balance, can acquire and perform on its own behalf the property and personal non-property rights, perform duties, to be claimant and the defendant in court.

5. The joint-stock company shall have the round stamp containing its full trade name in state language. In seal the trade name of joint-stock company in any other language can be also specified.

6. The joint-stock company can have stamps and forms with the name, and also the trademark and other means of visual identification registered in the procedure established by the law.

7. Features of creation and reorganization of joint-stock companies in spheres of banking, investing and insurance activity are determined by this Law and other laws of the Republic of Tajikistan.

8. Features of legal status of the joint-stock companies created in case of privatization of the state companies and concerning which the special participation right of the Republic of Tajikistan in management of the specified joint-stock companies ("golden share") is used are determined by the Law of the Republic of Tajikistan "About privatization of state-owned property.

Article 5. Name and location of joint-stock company

1. The joint-stock company has the trade name and shall have the words "Open Joint Stock Company (OJSC)" or "Private Company (PC)" in the name.

2. The location of joint-stock company is determined by its constituent documents.

3. The joint-stock company shall have the postal address to which with it communication is performed.

Article 6. Open and private companies

1. The joint-stock company can be open or closed that is reflected in its charter and trade name.

2. Shareholders of open joint stock company can alienate the stocks owned by them without the consent of other shareholders of this society. Such joint-stock company has the right to carry out open subscription to the shares issued by it and to perform their sale taking into account requirements of this Law and other regulatory legal acts.

The number of shareholders of open joint stock company is not limited.

The open joint stock company annually publishes the annual statement, the balance sheet and the report on profit and losses for general data.

3. The joint-stock company which shares are distributed only among his founders or other, in advance determined group of people is recognized private company. Such joint-stock company has no right to carry out open subscription to the shares issued by it or to otherwise offer them for acquisition to the unrestricted group of people.

The number of shareholders of private company shall not exceed fifty.

If the number of shareholders of private company will exceed the limit set by this part, the specified joint-stock company within one year shall be transformed to open. If the number of its shareholders does not decrease to the limit set by this part, society is subject to liquidation judicially.

Shareholders of private company have advantage on share acquisition, sold by other shareholders of this joint-stock company, at the price offered other person. By charter of joint-stock company the privilege of joint-stock company to share acquisition, sold by its shareholders can be provided if shareholders did not use the privilege of share acquisition.

4. The shareholder of private company, intended to sell the shares to the third party, shall notify in writing on it other shareholders of joint-stock company and joint-stock company with indication of the price and other sales terms of shares. The notification of shareholders of joint-stock company is performed through joint-stock company. If other is not provided by charter of joint-stock company, the notification of shareholders of joint-stock company is performed for the shareholder account, intended to sell the shares.

If shareholders of joint-stock company and (or) joint-stock company do not use the privilege of acquisition of all shares offered for sale within two months from the date of receipt of such notification by joint-stock company, shares can be sold to the third party at the price and on conditions which are reported to joint-stock company and its shareholders. The term of implementation of the privilege stops if before its expiration from all shareholders of joint-stock company, and also joint-stock company (if the joint-stock company has the right of preferential share purchase) written applications about use or refusal of use of the privilege are received.

5. The joint-stock company as which founder acts in the cases established by the laws, the Republic of Tajikistan (except for the societies formed in the course of privatization of the state companies) can be only open joint stock company.

Article 7. Branches and representative offices of joint-stock company

1. The joint-stock company can create branches and open representations in the territory of the Republic of Tajikistan with observance of requirements of this Law and other laws.

Creation of branches by joint-stock company and opening of representations outside the territory of the Republic of Tajikistan are performed according to the legislation of foreign state in the location of branches and representations if other procedure is not provided by the international treaty of the Republic of Tajikistan.

2. Branch of joint-stock company is its separate division located out of the location of joint-stock company and performing all its functions, including functions of representation, or their part.

3. Representative office of joint-stock company is its separate division located out of the location of joint-stock company, representing the interests of joint-stock company and performing their protection.

4. The branch and representation are not legal entities, act on the basis of the provision approved by joint-stock company. The branch and representation are allocated with the joint-stock company which created them property which is considered both on their separate balances, and on balance of joint-stock company. The head of branch and the head of representation are appointed by joint-stock company and act on the basis of the provision and the power of attorney issued by joint-stock company.

5. The branch and representation perform activities on behalf of the joint-stock company which created them. Responsibility for activities of branch and representation bears the joint-stock company which created them.

6. Joint-stock companies can create branches and open representations in the Republic of Tajikistan and beyond its limits after entering of information about them into charter of joint-stock company and into the Unified State Register of Legal Entities and individual entrepreneurs.

7. It is excluded

Article 8. Affiliated and dependent joint-stock companies

1. The joint-stock company can have affiliated and dependent joint-stock companies with the rights of the legal entity in the territory of the Republic of Tajikistan created according to this Law and other laws, and outside the territory of the Republic of Tajikistan - according to the legislation of foreign state in the location of affiliated or dependent joint-stock companies if other procedure is not provided by the international treaty of the Republic of Tajikistan.

2. The joint-stock company is recognized affiliated if other main joint-stock company owing to the prevailing participation in its authorized capital, or according to the agreement signed between them, or otherwise has opportunity to determine the decisions made by such joint-stock company.

The affiliated joint-stock company does not bear responsibility according to obligations of the main joint-stock company.

3. The main joint-stock company which has the right to give to affiliated joint-stock company obligatory for the last specifying, answers solidary with affiliated joint-stock company according to the bargains concluded by the last in pursuance of such instructions. The main joint-stock company is considered having right to give to affiliated joint-stock company obligatory for the last specifying only in case this right is provided in the contract with affiliated joint-stock company or the charter of affiliated joint-stock company.

In case of bankruptcy of affiliated joint-stock company because of the main joint-stock company the last bears subsidiary responsibility on its debts. Shareholders of affiliated joint-stock company have the right to require compensation by the main joint-stock company of the losses caused through his fault to affiliated joint-stock company.

4. The joint-stock company is recognized dependent if other (prevailing) joint-stock company has more than 20 percent of voting shares of the first joint-stock company. The joint-stock company which acquired more than 20 percent of voting shares of joint-stock company shall publish without delay data on it according to the procedure, determined by authorized body.

Article 9. Responsibility of joint-stock company

1. The joint-stock company bears responsibility according to the obligations all property belonging to it.

2. The joint-stock company does not answer for obligations the shareholders.

3. The shareholders who did not completely pay shares bear joint liability according to obligations of joint-stock company within unpaid part of cost of the stocks owned by them.

4. If bankruptcy of joint-stock company is caused by actions or failure to act of its shareholders or its affiliates, then the accessorial (subsidiary) liability according to its obligations can be conferred on the specified shareholders or other persons in case of insufficiency of property of joint-stock company.

CHAPTER 2. CREATION OF JOINT-STOCK COMPANY

Article 10. Creation of joint-stock company

1. The joint-stock company is established according to the decision of founders (founder). In case of establishment of a joint-stock company by one person, the decision on organization is made by this person.

2. The joint-stock company can be created also by reorganization of the existing legal entity (merge, separation, allocation or transformation).

3. Founders of joint-stock company among themselves sign the foundation agreement in which are determined procedure for joint activities for establishment of a joint-stock company, the size of the authorized capital, types of the shares placed among founders, the size and payment procedure of shares, and also the rights and obligations of founders on creation of joint-stock company.

Article 11. Transformation of the state unitary enterprise to joint-stock company

1. The state unitary enterprise can be transformed to joint-stock company by share issue on all property value of the company.

2. The decision on transformation of the state unitary enterprise relating to republican property in joint-stock company is accepted by bodies for management of state-owned property of the Republic of Tajikistan, and in relation to the companies of municipal property local Majlises of People's Deputies.

3. The joint-stock company created by transformation of the state unitary enterprise is legal successor of this company.

4. During creation of joint-stock company based on state-owned property the amount of the authorized capital of open joint stock company is constituted by the cost of the company (property) determined according to the procedure, established by the legislation of the Republic of Tajikistan.

Article 12. Founders of joint-stock company

1. Founders of joint-stock company are the physical and (or) legal entities who made the decision on its organization and approval of the charter.

State bodies cannot act as founders of joint-stock company if other is not established by the laws.

The state unitary enterprises can be founders of joint-stock company only with the consent of the state on behalf of authorized state body on management of state-owned property.

2. The joint-stock company cannot have other joint-stock economic company consisting of one person as the single founder (shareholder).

3. Founders of joint-stock company bear subsidiary responsibility according to the obligations connected with its creation and arising before state registration of this joint-stock company.

Article 13. Constituent assembly of joint-stock company

1. In case of establishment of a joint-stock company by one founder the decision on establishment of a joint-stock company is made by this founder and the constituent assembly is not held.

2. The constituent assembly is competent in case of presence of all founders or their plenipotentiaries.

3. The chairman of the meeting is elected attendees by a simple majority vote.

4. The constituent assembly approves charter of joint-stock company unanimously.

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