Reorganizing Legal Entities in Uzbekistan: A Comprehensive Guide

Accession occurs when one or more legal entities terminate their activities by transferring all their rights and obligations to an existing legal entity based on a transfer act. The joining companies are liquidated. The transfer act is critical in this process; it must clearly define the succession for all obligations, including disputed ones, as failure to submit a proper transfer act will lead to refusal of state registration. For LLCs, the general meeting of participants of both the joining company and the acquiring company decide on the accession and approve the accession agreement. The joint general meeting then amends the constituent documents of the acquiring company to reflect changes in participants and shares. Similarly, for JSCs, the joining company and the acquiring JSC conclude an accession agreement detailing the process and share conversion. Their respective supervisory boards and general meetings decide on the accession and approve the transfer act and amendments to the charter of the acquiring JSC.

Separation involves the liquidation of a company and the transfer of all its rights and obligations to two or more newly created companies. All rights and obligations are distributed among the newly created entities according to a separation balance sheet. If the balance sheet doesn't clearly define the successor, the newly created entities are jointly and severally liable for the obligations of the original company. For LLCs, the general meeting of the original company decides on the division, its terms, the creation of new companies, and approves the dividing balance sheet. Participants of each new company sign founding agreements, approve charters, and elect bodies. For JSCs, the supervisory board of the original JSC submits the reorganization proposal to the general meeting of shareholders, which decides on the division, the creation of new legal entities, and the conversion of shares into shares of the newly created entities.

Allocation involves the creation of one or more new companies to which a part of the rights and obligations of the reorganized company is transferred, without the liquidation of the original company. This is the key distinction from separation, where the original legal entity ceases to exist. In allocation, a portion of rights and obligations is transferred via a separation balance sheet. If this balance sheet is unclear, entities created through allocation are jointly and severally liable for the original company's obligations. For LLCs, the general meeting of the original LLC decides on the allocation, its terms, the creation of new companies, and approves the dividing balance sheet, making necessary changes to the original company's constituent documents. For JSCs, the supervisory board of the original JSC proposes the allocation, its terms, the creation of new entities, and the possibility of converting shares, all subject to approval by the general meeting of shareholders.

Conversion signifies a change in the organizational and legal form of an existing legal entity (e.g., from an LLC to a JSC, or vice versa). The rights and obligations of the reorganized entity are transferred to the newly formed entity according to a transfer act. The company's legal form changes, but its fundamental rights and obligations are preserved and transferred to the new form. For LLCs, the general meeting decides on the transformation, the exchange procedure for participants' shares, approves new constituent documents, and the transfer act. For JSCs, the supervisory board proposes the transformation to the general meeting of shareholders, which decides on the transformation and its conditions. Specific requirements may apply for certain activities, mandating them only as JSCs.