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LAW OF THE AZERBAIJAN REPUBLIC

of April 23, 1996 No. 69-IG

About financial and industrial groups

(as amended of the Laws ARES of April 23, 2002 No. 311-IIQD, 10 of June, 2005 No. 925-IIQD)

This Law establishes the legal basis of creation, activities and liquidation of financial and industrial groups in the Azerbaijan Republic.

The relations in financial and industrial groups which are not regulated by This Law are regulated by other regulatory legal acts of the Azerbaijan Republic, the agreement on creation of financial and industrial group and other agreements signed between participants of group.

Section I. General provisions

Article 1. Concept of financial and industrial group

Financial and industrial group - set of legal entities (the main and affiliated enterprises) which merged fully or partially the assets on the basis of the agreement on creation of financial and industrial group according to the rules and conditions provided by this Law.

Article 2. Purpose of financial and industrial group

The financial and industrial group is created for investment attraction and consolidation on the basis of the agreement of material and financial resources of participants of group for the purpose of increase in competitiveness and productivity of production, creation of favorable technological and cooperative communications, increase in the export potential, acceleration of scientific and technical progress, joint implementation of investment projects and programs.

Article 3. Participants of financial and industrial group

1. The legal groups and the leading company of financial and industrial group founded by them or the main and affiliated enterprises creating group which signed the agreement on creation of financial and industrial group are considered as participants of financial and industrial group.

2. Financial and industrial group can be included, except for the public and religious organizations, any legal entities, including foreign legal entities.

3. As a part of financial and industrial group along with acting in the sphere of production and services by the companies also financial credit institutions shall participate.

4. The state and municipal companies can participate in financial and industrial group on the rules and conditions established by owners of property.

5. State and municipalities of domicile cannot be participants of financial and industrial group.

6. Affiliated enterprises can be included financial and industrial group only together with the main companies which founded them.

7. The companies and the organizations, being participants of financial and industrial group, cannot enter into other financial and industrial group.

Article 4. Form of creation of financial and industrial groups

Financial and industrial groups can be created in the following forms:

based on the agreement signed between participants of group;

based on the resolution of relevant organ of the state executive authority of the Azerbaijan Republic;

based on intergovernmental agreements.

Article 5. Transnational financial and industrial groups

1. The financial and industrial group with participation in the list of foreign legal entities is considered transnational financial and industrial group according to the procedure, established by this Law.

2. The financial and industrial groups created based on the intergovernmental agreement have the status of interstate (international) financial and industrial group. Creation, activities and liquidation of interstate (international) transnational financial and industrial groups are determined by agreements with indication of their features.

3. For participants of transnational financial and industrial group the national treatment is set on mutual basis by the intergovernmental agreement.

Article 6. State support of activities of financial and industrial groups

For the purpose of support of activities of financial and industrial groups the state can apply to them various type of privilege.

Section II. State registration of financial and industrial groups

Article 7. Agreement on creation of financial and industrial group

1. The agreement on creation of financial and industrial group establishes following:

name of financial and industrial group;

procedure and conditions of organization of leading company of the group having the established legal form and authorized to run business of financial and industrial group as the legal entity;

procedure for carrying out changes in the list of participants of financial and industrial group;

procedure and conditions of consolidation of assets;

authorized capital and share in this fund of each participant of group;

purpose of consolidation of participants of group;

rules for apportionment arrived between participants of group;

obligations and responsibility of participants of group;

duration of the agreement.

2. Other terms of the contract about creation of financial and industrial group are determined by participants of group depending on the purpose and function of financial and industrial group according to the procedure, established by the legislation of the Azerbaijan Republic.

Article 8. Organizational project of financial and industrial group

1. The organizational project of financial and industrial group - the collection of documents represented by leading company of group to relevant organ of the state executive authority, uniting in itself information on the purpose and functions, investment projects and programs of financial and industrial group and necessary for adoption of the resolution on registration of financial and industrial group.

2. Other requirements to the organizational project of financial and industrial group, except specified in Item 1st this Article, are determined by relevant organ of the state executive authority of the Azerbaijan Republic.

Article 9. Rules of state registration of financial and industrial groups

1. State registration of financial and industrial groups is performed according to the Civil code of the Azerbaijan Republic, the Law of the Azerbaijan Republic "About state registration and the state register of legal entities".

2. Set of the legal entities who formed financial and industrial group receives the status of financial and industrial group after state registration of the state executive authority by relevant organ.

3. For passing of state registration the leading company of financial and industrial group submits to relevant organ of the state executive authority the following documents:

statement for creation of financial and industrial group;

agreement on creation of financial and industrial group;

organizational project;

the resolution of the state executive body performing the antimonopoly policy;

other documents provided by the Law of the Azerbaijan Republic "About state registration and the state register of legal entities".

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