President of the Republic of Uzbekistan Shavkat Mirziyoyev has signed a new version of the Law on Limited Liability Companies (LLCs). Prepared by the Ministry of Justice, this document aims to implement modern standards of corporate governance in the country, eliminate legal loopholes in the regulation of LLC activities, and further strengthen the rights of company participants. Uzdaily.uz reports on this development.
Consisting of 71 articles, the new law will enter into force three months after its official publication. The development of the document took into account proposals from local and foreign experts, the public, and international best practices.
The law clearly defines the powers of the company's supervisory board and the procedure for electing its members, which will serve to prevent corporate disputes. Additionally, the possibility for the supervisory board to make decisions remotely, without physical meetings, has been established.
For the first time, the law affirms the fiduciary duties of members of the supervisory board and executive bodies, aligning with international corporate governance practices. Furthermore, the legal foundations for company operations have been expanded, including the ability to operate not only on the basis of licenses but also within the framework of other permitting and notification procedures.
Matters regarding the establishment of branches, representative offices, and subsidiary and dependent enterprises have been separately regulated. The law provides mechanisms for the expulsion of participants who have failed to contribute to the authorized capital or who obstruct the company's activities. It also allows for restrictions on changing the authorized capital during periods of court disputes between participants regarding shares.
Provisions are made for accounting for shares through the Central Securities Depository, the formation of a minority participants' committee, and the improvement of norms regarding audits and transactions with interested parties. The new version of the law is aimed at strengthening the protection of participants' rights, preventing the illegal appropriation of shares, improving the investment climate, attracting foreign investment, and forming a more transparent and stable corporate environment in the country.
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