Civil forms of protection of the rights and legitimate interests of entrepreneurs
CIVIL FORMS OF PROTECTION OF THE RIGHTS AND LEGITIMATE INTERESTS OF ENTERPRENEURS
A private enterprise is an object of civil (civil-law) regulations. Norms of civil law regulate not only relations based on right issues that appear in businesses sphere they also contain a number of the norms directed on the protection of businessmen’s rights and legitimate interests. The Civil Code of the Republic of Kazakhstan (the General part is adopted on December 27, 1994 which was enforced on March 1, 1995, the Special part was adopted on July 1, 1999) is a codified system-creating law which is also a legal basis of regulation of all issues concerning property and individual non-property relations developing in the environment of the market economy.
In relation sphere regulated by the civil legislation businessmen have rights to do any activities, except the activities forbidden by the law.
Protection of the rights and legitimate interests of businessmen is a system of measures directed on provision of inviolability of rights, its implementation, and its liquidation in case of infringement. Article 9 of the Civil Code of RK defines the bodies that provide protection of rights, ways and orders of protection are a court or arbitration courts.
It is necessary for a businessman to be familiarised with Article 2 of the Civil Code where one of the main principles of the civil law is fixed, i.e. an intervention of someone in private affairs of other ones is inadmissable. One of the meanings of the given principle is an interdiction to governing bodies to influence how businessmen dispose their property, divide the profit and how they use incomes. According to the given principle it does not require receptions of someone's permissions, consents, or information deliver if these kinds of requirements are not directly established by the law. Firstly, it is necessary to understand the meaning of the concept of the word “an enterprise”. Article 10 of the Civil Code of RK gives the following definition: "An enterprise is an initiative activity of citizens and legal bodies, independently of a form of ownership directed to take net profit by satisfying demands for the goods (works, services) based on a private property (a private enterprise) or on the right of conducting of an economy of a public/state enterprise (a public/state business). An enterprise activity is carried out on behalf of a name of a businessman, risks and responsibilities belong to the businessman". From the definition it is clear that economic activities are characterised by the following necessary signs. So, an entrepreneurship:
a) might be directed on getting benefits through manufacture and doing free sale in the market (presenting their productions, services, works);
b) might be an initiative of a businessman to carry out this or that type of business activity and this is usually must be done only according to the businessman’s interests and only under his/her discretion. To realize other activities by the order or instruction of any executive bodies or persons can not be called (named) an entrepreneurship;
c) carried out on the basis of full property independence of the businessman. As a rule, a businessman is the proprietor of his property base and this is he/she who takes full risk of possible property losses and expenses during his/her business;
d) a businessman acts in a civil circulation on his/her own behalf.
Secondly, a businessman should know point 3, article 10 of the Civil Code of RK where protection and support ways of businessmen are considered:
1) possibility of undertaking any type of enterprise activity without reception of someone's permissions except licensed types of activities.
Article 10 of the Constitution confirms the right of each citizen of the Republic of Kazakhstan to undertake any type of entrepreneurship without some ones restrictions and permissions. Some licence-required types of business activities are excluded in this case. The primary goal of licensing enterprise activities is to keep away businessmen or their activity from inadequate conditions which can bring to break the state interests or interests of citizens. The legal basis for licensing the business is the Act "about Licensing" which was adopted on the 17th of April, 1995. In case of a breach of the licensing terms the license could be declared invalid. All reasons for terminations, revocation, suspension before the fixed time or declaration of license invalidity are defined in legislative acts in detail and must be strictly comply with them in order to avoid corruptive activities;
2) The simplest registration procedure of all types of businesses in all sectors of the economy must be done in a single registration authority.
By the Law of the Republic of Kazakhstan dated to the 17th of April, 1995 "On the state registrations of legal entities and the registrations of their branches and representatives" a common procedure for registration of legal persons including people engaged in entrepreneurial activity is confirmed. During the registration the legality of business is checked out. It is prohibited by the law the denial of registration referencing to the inadvisability of this or that business in that time conditions (e.g. there is no demand for goods and services, a big competition, etc.). To register his/her business a business applicant must apply his/her application only to one registration office. If all documents of the legal person meet the requirements of the Law on state registration the registration office has no right to refuse to register or require the applicant to submit any additional visas, approvals, permits, etc. The Article 6 of the Law considers the order of the state registration of legal persons. To register a legal person it is necessary to fill application form confirmed by the Ministry of Justice of the Republic of Kazakhstan, to attach constituent documents in the state and Russian languages in triplicate. The application is signed by the founder or by the authorized person of the founder with the constituent documents submitted and certified in the order prescribed by the Law of the Republic of Kazakhstan. At the same time the document confirming the location of a legal entity as well as a receipt or a document confirming payment for the state registration collection of legal persons are submitted to the registration office. Small-scaled businesses do not have to provide a document certifying their whereabouts. The demand of any other documents and information that are not required by the Law and other Acts is prohibited.
The reason to do registrations is that it creates an atmosphere of transparency as well as through the registration office any other interested person has right to review all materials of a legal person, except of those which are confidential or have state or commercial confidentiality. Legislative providence for keeping confidentiality of the businesses is the important measure to protect the interests of enterprises (Article 42, the CC of RK). Commercial (business) secrets are protected by the Law. Determination of information that is confidential, methods of protection as well as a list of information that does not belong to confidentiality is established by the legislation. Those who have access to confidential information via their supervisory functions in public or state bodies, investigative or judicial authorities, using their position, etc. are under the obligation not to disclose it to other people.
3) Restriction to hold control on businesses carried out by public authorities.
A large number of laws and regulations governing business activities and those authorities that exercise control and monitoring functions are adopted in the Republic of Kazakhstan. They are the Act "about Private entrepreneurship", dated to the 31st of January, 2006, "about State legal statistics and special registration" from the 22nd of December in 2003, Instructions on registration of all types of control of activities of business/economic entities approved by the order of the Attorney General on 1 March, 2004. An entrepreneur can take instructions or follow them in case of issues related to inspections of his/her activities. On the basis of a single act on checking appointment only one inspection can be carried out. The inspection might be conducted only with the official (s) who is specified in the inspection appointment act;
4) Involuntary termination of business is carried out only according to the decision of the court, which is based on the regulation acts.
Entrepreneurship might be terminated at any base. Article 49 of the Civil Code of the Republic of Kazakhstan considers the elimination cases of legal person on the basis of the court:
1) on bankruptcy case;
2) if there is violation of laws during the registration of the legal person and it is irresistible to do corrections, business activity of the entrepreneurship is considered an invalid one;
3) systematic implementation of activities which contradicts to the Charter objectives of the legal person;
4) carry out activities without proper permissions (license) that are prohibited by legislation; and if there are repeated or flagrant violation of the law including absence of declaration;
5) other cases stipulated by law.
5) Legislative confirmation of the list of products and services that is prohibited or restricted to enterprises to export or import.
Paragraph 4 of the point 2, article 49 of the Civil Code of the Republic of Kazakhstan considers the elimination cases of legal person on the basis of the court. These acts may consider a list of jobs, goods and services that are prohibited to private enterprises, or might be limited, banned or restricted to export and import. Restrictions to public entities are listed within their Charter documents and regulation acts of their legal status as well as by the international agreements of Kazakhstan;
6) Involvement of public authorities, officials and other individuals and entities in responsibility for illegal obstructions entrepreneurs’ business activity.
Article 922 of the CC of RK establishes liability for harm caused by public authorities, local governments and their officials. The harm caused by the in the result of creating acts by public authorities and which do not comply with legislation acts are recoverable on the basis of the court decision, regardless of fault of authorities and officials who issues acts. The harm is reimbursed from the State Treasury. The harm caused by unlawful actions (inaction) of public officials in the administration sphere is recovered on the general basis of that organisation’s fund;
7) Prohibition to enter into contractual relations of the executive, control and supervisory authorities with business entities in order to perform functions that are done by these bodies.
To come into contractual relations with business entities which contradict the basic principles of anti-corruption activities of the Law of the Republic of Kazakhstan adopted on 2 July 1998 "about Anti-corruption" paragraph 9 of article 5 states the inadmissibility of the delegation of authorities for governmental regulations of business persons’ or entities’ activities and as well as to keep control over them.
