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of December 15, 1992 No. 405

About business activity

(as amended on 06-07-2023)

This Law determines the principles of entrepreneurship in the Azerbaijan Republic, establishes the rights and obligations of subjects of business activity, form and methods of its state protection and encouragement, relation of entrepreneurs with the state bodies and structures created by relevant organ of the executive authority (further - structures). The law is directed to creation of conditions for implementation of the principle of equality of all patterns of ownership, broad manifestation of economic initiative and efficiency on the basis of the independent choice of fields of activity and adoption of economic decisions.

Section I. General provisions

Article 1. Business activity

Business activity is the independent activities of person performed which main objective is generation of profit (concerning business owners - the income) from use of property, production and (or) sales of goods, performance of works or rendering services.

Article 2. Legislation on entrepreneurship

1. The relations connected with entrepreneurship irrespective of patterns of ownership, type and field of activity, are regulated by the Constitution of the Azerbaijan Republic, the Constitutional act "About the State Independence of the Azerbaijan Republic", the Constitutional law "About Economic Independence of the Azerbaijan Republic", the Civil code of the Azerbaijan Republic, the Law of the Azerbaijan Republic "On regulation performed in the field of entrepreneurships and protection of interests of entrepreneurs" and the Law of the Azerbaijan Republic "About development of micro, small and medium entrepreneurship, this Law and another, the accepted on their basis, legal acts.

2. The business activity performed by means of creation of the company is regulated also by the legislation of the Azerbaijan Republic on the companies.

3. Features of business activity of foreign legal entities and physical persons in the territory of the Azerbaijan Republic are regulated also, along with the legal acts specified in parts 1 and 2 of this Article, the Law of the Azerbaijan Republic "About protection of foreign investments" and the international obligations of the Azerbaijan Republic.

4. The relations in connection with entrepreneurship in the Alyatsky free economic zone, are regulated according to requirements of the Law of the Azerbaijan Republic "About the Alyatsky free economic zone".

Article 3. Subjects of entrepreneurship

1. Entrepreneurship, excepting the cases provided by legal acts of the Azerbaijan Republic can be engaged: each capable citizen of the Azerbaijan Republic; legal entities, irrespective of pattern of ownership; each foreign citizen or stateless person; foreign legal entities.

2. Occupation is forbidden by business activity to leading employees and specialists of the state bodies and structures performing the solution of the questions connected with business activity or control over these activities.

3. Business activity, depending on nature of business activity and the relations with the owner, can be engaged as the owner, and, in the limits set by it powers, the subject, the managing director as the head of economy, in property of the owner.

4. The relations of the managing director of the company of the subject and the owner of property are regulated by the agreement (contract) establishing cross liabilities, the rights and responsibility of the parties.

After the conclusion of the agreement with person, managing enterprise, his owner cannot interfere with activities of the company, except as specified, provided by the agreement, the charter of the company and the legislation of the Azerbaijan Republic.

Article 4. Entrepreneurship forms

1. In the Azerbaijan Republic all forms of entrepreneurship performed within the law are permitted. All forms of entrepreneurship are equal regardless of pattern of ownership and legal form.

2. The entrepreneurship performed individually and jointly can be organized in forms, stipulated by the legislation.

Article 4-1. Classification of subjects of business activity by criteria

1. According to the criteria provided by part 2 of article 4-1 of this Law, subjects of business activity are divided into subjects of micro, small, average and large business activity.

2. Criteria of classification of subjects of micro, small, average and large business activity are established by relevant organ of the executive authority.

3. The state support and privileges directed to subjects of micro, small and medium business activity within measures for regulation of entrepreneurship are performed based on the criteria provided by part 2 of article 4-1 of this Law.

Article 5. Legal regulation of limits of entrepreneurship

1. Restriction of business activity or prohibition of its separate types is allowed only in the cases provided by the law.

Public authorities and public administration are forbidden to issue the resolutions providing privileges to this or that type of entrepreneurship depending on its pattern of ownership and form of business.

2. Intervention of state bodies, trade-union organizations in business activity, except as specified, stipulated by the legislation the Azerbaijan Republic is forbidden. Intervention of political parties and public associations in business activity is not allowed.

Section II. Rights and obligations of the entrepreneur

Article 6. Rights of the entrepreneur

1. The entrepreneur for implementation of the activities with compliance with law of the Azerbaijan Republic has the right:

create any companies, hold positions in their managerial bodies and participate in work of these bodies;

acquire fully or partially property of the companies founded on the state form and other patterns of ownership, other property and property rights;

participate in activities of other companies the property which is at the disposal;

use by agreement of the parties property and intellectual property items of other physical persons and legal entities;

hire and dismiss workers;

install form and wages system of workers, the sizes of their property and other types of their income;

to independently perform financial and economic activities, to choose suppliers and consumers of the made products (works, services), to perform on contractual basis works and deliveries of products for the state needs;

establish the prices (rates) for the products (works, services);

open accounts in banks for storage of money, implementation of all types of settlement, credit and cash operations;


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