Charter of LLC — Requirements Under the New Law

The new Law of the Republic of Uzbekistan “On Limited Liability Companies” dated April 21, 2026, No. ZRU-1137, is aimed at regulating the establishment, activities, reorganization, and liquidation of limited liability companies, as well as issues of company management and relations between participants.

In the system of corporate law, the charter of a limited liability company has central importance. It determines the legal status of the company, the structure of its bodies, the scope of rights and obligations of participants, the decision-making procedure, rules for the circulation of shares, and other key elements of corporate organization. In essence, the charter performs the function of the “corporate constitution” of an LLC, since it is through the charter that the law allows the management model of a specific company to be individualized.

Under the new law, a limited liability company is recognized as a business company established by one or several persons, whose charter fund is divided into shares in the amounts established by the constituent documents. The company acquires the status of a legal entity from the moment of state registration.

The charter is part of the system of constituent documents of the company. If an LLC is established by several persons, the constituent documents are the foundation agreement and the charter. If the company is established by one person, the constituent document is only the charter approved by that person. If the number of participants increases to two or more, a foundation agreement must be concluded between them.

The rule on the priority of the charter is of particular importance: in case of inconsistency between the provisions of the foundation agreement and the charter of the company, the provisions of the charter have prevailing force for third parties and participants of the company. This means that the charter is the main publicly significant corporate document relied upon not only by participants but also by third parties.

Approval of the Charter Upon Establishment of the Company

An LLC is established by decision of the founder or founders. If the company is established by several founders, the decision is adopted at a meeting of founders; if by one founder, it is adopted individually. The decision on establishment of the company may reflect issues relating to the company name, location, amount of the charter fund, approval of the charter, and other matters connected with the establishment of the company.

The decision to approve the company’s charter is adopted unanimously by the founders. This rule emphasizes the founding nature of the charter: it cannot be imposed by individual founders on other participants at the stage of establishing the company, since it determines the future scope of corporate rights, obligations, and management mechanisms.

Mandatory Content of the Charter

Article 14 of the new law directly defines the list of information that must be included in the company’s charter. This includes:

No.	Mandatory provision of the charter	Legal significance
1	Full and abbreviated company name	Individualizes the company in civil circulation
2	Subject of the company’s activities	Defines the main areas of activity
3	Postal address of the company	Ensures official communication with the company
4	Composition and powers of the company’s bodies	Establishes the corporate governance system
5	Exclusive powers of the general meeting	Delimits the competence of bodies
6	Powers of the supervisory board, if established	Establishes the control and supervision model
7	Procedure for decision-making by company bodies	Defines quorum, majority, unanimity
8	Amount of the charter fund / charter capital	Fixes the property basis of the company
9	Size and nominal value of each participant’s share	Defines the corporate participation of each person
10	Rights and obligations of participants	Establishes the corporate status of participants
11	Procedure and consequences of withdrawal of a participant	Regulates termination of participation in the company
12	Procedure for transfer of a share or part of a share	Regulates alienation and transfer of corporate rights
13	Procedure for storing documents and providing information	Ensures transparency of the company’s activities
14	Information on branches and representative offices	Reflects the territorial structure of the company
15	Information on subsidiaries and dependent companies	Fixes the corporate group
16	Other information not contrary to legislation	Allows the charter to be individualized for a specific business

This list shows that the charter of a new LLC should not be a formal document, but a comprehensive regulator of the company’s internal structure, property relations, and corporate procedures.

Charter and Subject of the Company’s Activities

The new law requires the subject of the company’s activities to be included in the charter. At the same time, the company has the right to carry out any types of activities not prohibited by legislation and may also engage in activities not specified in its constituent documents. However, certain types of activities may be carried out only on the basis of a license, permit documents, or through a notification procedure.

Accordingly, indication of the subject of activities in the charter should not be interpreted as an absolute limitation of the company’s legal capacity. In practice, it is advisable to formulate the subject of activities broadly enough, while also taking into account special requirements for licensed, permitted, or notifiable types of activities.

Charter Fund, Participants’ Shares, and Restrictions in the Charter

The charter fund of the company is determined by the charter and consists of the nominal value of the participants’ shares. The size of a participant’s share is determined as a percentage or as a fraction and must correspond to the ratio between the nominal value of his share and the charter fund of the company.

The new law allows the charter to include restrictions on the maximum size of a participant’s share, as well as restrictions on the possibility of changing the ratio of participants’ shares. However, such restrictions may not be established in relation to individual participants. Inclusion, amendment, or exclusion of such provisions requires a unanimous decision of all participants of the company.

This provision is important for protecting the balance of interests of participants. It allows excessive concentration of corporate control to be prevented, while at the same time prohibiting discriminatory restrictions directed against a specific participant.

Charter and Rights of Company Participants

Participants of the company have the right to participate in the management of the company’s affairs, receive information on the company’s activities, review financial statements, participate in the distribution of profits, dispose of their share, withdraw from the company, receive part of the property upon liquidation, and conclude a corporate agreement.

The law directly links the exercise of a number of these rights with the charter and constituent documents. For example, the sale or other assignment of a share is carried out in the manner provided by law and the company’s charter, while withdrawal of a participant from the company is carried out in the manner provided by law and the constituent documents.

Therefore, the charter must regulate in detail the procedure for transfer of shares, pre-emptive rights of participants, consequences of a participant’s withdrawal, settlement deadlines, the procedure for determining the actual value of a share, and other matters that may give rise to a corporate conflict.

Charter and Obligations of Participants

Participants of the company are obliged to make contributions in the manner, amounts, methods, and within the deadlines provided by law and the constituent documents, notify the company of changes in their data, and not disclose confidential information about the company’s activities. The law permits the establishment of other obligations of participants by legislation and constituent documents.

This means that the charter may establish additional corporate obligations: the obligation to provide up-to-date contact details, comply with confidentiality procedures, participate in the adoption of key decisions, refrain from actions causing harm to the company, and comply with the provisions of a corporate agreement, provided that this does not contradict the law.

Charter and Company Management Bodies

The highest management body of an LLC is the general meeting of participants. The charter may provide for the establishment of a supervisory board. The current activities of the company are managed by the executive body, which may be sole or collegial; the executive body is accountable to the general meeting and, if provided by the charter, to the supervisory board.

The powers of the general meeting are determined by the charter in accordance with the law. The exclusive powers of the general meeting include, in particular, changing the amount of the charter fund, amending and supplementing the constituent documents, formation of executive bodies, approval of financial statements, distribution of net profit, establishment of branches and representative offices, and adoption of a decision on reorganization or liquidation of the company.

Thus, the charter must clearly delimit the competence of the general meeting, supervisory board, and executive body. Unclear provisions increase the risk of challenging decisions of the company’s bodies and the emergence of a management deadlock.

Charter and Decision-Making Procedure

The law establishes the general rule that each participant has a number of votes proportional to his share in the charter fund. However, the charter may establish a different procedure for determining the number of votes either upon establishment of the company or by introducing amendments based on a unanimous decision of all participants.

Decisions of the general meeting are adopted by open voting unless another procedure is provided by the charter. In addition, the charter may provide for a higher voting threshold for the adoption of certain decisions compared with the general rule of the law.

These rules are important for contractual modeling of corporate governance. For example, the charter may provide for a qualified majority or unanimity on strategic matters: alienation of significant assets, attraction of major loans, change of types of activities, approval of the budget, appointment of the director, and approval of transactions with affiliated persons.

Charter and General Meeting of Participants

An ordinary general meeting is held within the time limits determined by the charter, but not less than once a year. The charter must determine the time for holding the annual meeting at which the annual results of the company’s activities are approved; such meeting is held no later than six months after the end of the financial year.

The procedure for holding the general meeting is determined by law, the charter, and the company’s internal documents. If certain matters are not regulated by law, the charter, or company documents, the procedure for holding the meeting is established by decision of the general meeting.

The new law also permits decisions to be adopted by absentee voting. Such voting may be carried out by postal, electronic, or other communication ensuring the authenticity of messages and their documentary confirmation. At the same time, the charter may play a key role in determining the possibility and procedure of absentee voting on matters falling within the exclusive competence of the general meeting.

Charter and Control Over the Company’s Activities

The charter may provide for the establishment of an audit commission or the election of an auditor. The audit commission is elected by the general meeting for a term determined by the charter, and the number of members of the audit commission is determined by the company’s charter.

The charter may also be relevant in regulating an audit. The law provides that unless otherwise established by the charter, by decision of the general meeting the company’s activities may be subjected to an external audit after the expiration of the term of office of the director or members of the collegial executive body, as well as after their application for release from office.

Thus, the charter may be used as an instrument of internal control and for reducing the risk of abuses by management bodies.

Charter, Document Storage, and Information Transparency

The charter must contain information on the procedure for storing company documents and the procedure for providing information by the company to participants and other persons. In addition, the company is obliged to keep documents for the period established by the charter, unless otherwise provided by legislation. Such documents include constituent documents, registered amendments, minutes of meetings, state registration documents, documents relating to property, regulations on branches and representative offices, minutes of company bodies, conclusions of the audit commission, and conclusions of the audit organization.

This shows that the charter must contain not only general declarations but also procedural rules: where documents are stored, who is responsible for their storage, within what period information is provided to a participant, in what form copies are sent, and who bears the costs of making copies.

State Registration of the Charter and Amendments

The company’s charter and amendments introduced into it are subject to state registration. The charter and amendments enter into force for third parties from the moment of their state registration. However, amendments related to the establishment of representative offices and branches, subsidiaries and dependent companies, as well as a change of postal address, enter into force for third parties from the moment of notification of the state registration authority for legal entities.

This rule has practical significance: until amendments to the charter are registered, they do not create full legal effect for third parties. Therefore, after adoption of a decision to amend the charter, it is necessary to ensure timely state registration or notification of the registration authority in cases expressly provided by law.

Differences Between the Charter and the Foundation Agreement of an LLC

No.	Criterion	Charter of an LLC	Foundation agreement of an LLC	Practical significance
1	Legal nature	The main constituent document of the company, determining its legal status, management structure, rights and obligations of participants, procedure for transfer of shares, and other corporate rules.	An agreement between founders / participants on establishment of the company and the procedure for their joint actions when establishing the LLC.	The charter is the “corporate constitution” of the LLC; the foundation agreement is an agreement of the founders on establishment of the company.
2	Presence among constituent documents	The charter is a constituent document of the company.	The foundation agreement is also a constituent document of the company if there are two or more participants.	The law directly states that the constituent documents are the foundation agreement and the charter of the company.
3	Mandatory nature with one participant	Mandatory. If the company is established by one person, the constituent document is the charter approved by that person.	Not concluded when an LLC is established by one person.	For an LLC with one participant, the charter is sufficient.
4	Mandatory nature with two or more participants	Mandatory.	Mandatory. If the number of participants increases to two or more, a foundation agreement must be concluded between them.	For an LLC with two or more participants, both documents are required.
5	Who adopts / approves	The charter is approved by the founders. The decision to approve the charter is adopted unanimously.	The foundation agreement is concluded by the founders / participants.	The charter is approved by a decision, while the foundation agreement is signed as an agreement between the founders.
6	Main purpose	Regulates the company’s activities after its establishment: management bodies, competence, voting, participants’ rights, transfer of shares, document storage, etc.	Regulates the establishment of the company: obligation of the founders to establish the LLC, procedure for joint activities, contributions, and liability for making contributions.	The charter is more focused on the further life of the LLC, while the foundation agreement relates to the establishment stage and relations between founders.
7	Mandatory content	Must contain the company name, subject of activity, postal address, company bodies, decision-making procedure, amount of the charter fund, participants’ shares, rights and obligations, withdrawal of a participant, transfer of shares, document storage, information on branches, subsidiaries and dependent companies, etc.	Must define the composition of founders, amount of the charter fund, size of shares, procedure, amount, methods and deadlines for making contributions, liability for breach of the obligation to make contributions, distribution of profits and losses, composition of bodies, procedure for withdrawal and admission of third parties.	The content of the charter is broader and has a systemic corporate character; the foundation agreement mainly records the arrangements of the founders.
8	State registration	The charter and amendments to it are subject to state registration. For third parties, the charter and amendments enter into force from the moment of state registration, subject to certain exceptions.	The foundation agreement and amendments to it are not subject to state registration.	The charter has a more pronounced public significance for third parties.
9	Legal force in case of contradiction	Has prevailing force.	Yields to the charter in case of contradiction.	If the provisions of the foundation agreement and charter do not coincide, the provisions of the charter have prevailing force for third parties and participants.
10	Significance for third parties	Has significance not only for participants but also for third parties, since it is subject to registration and applies to third parties after registration.	To a greater extent regulates internal relations of founders / participants and is not registered.	Banks, counterparties, state authorities, and courts usually rely primarily on the charter.
11	Amendment of the document	Amendments to the charter are introduced by decision of the general meeting of participants and are subject to state registration.	Amendments are also introduced by decision of the general meeting of participants but are not subject to state registration.	Amendments to the charter require a registration procedure; amendments to the foundation agreement do not.
12	Subject of the company’s activities	Indicated in the charter as a mandatory condition.	The law does not include the subject of activity among the mandatory content of the foundation agreement.	The subject of activity is better fixed specifically in the charter.
13	Management bodies	The charter must contain information on the composition and powers of company bodies, exclusive powers of the general meeting, supervisory board, and decision-making procedure.	The foundation agreement contains the composition of company bodies but does not replace charter regulation of their competence and procedures.	A detailed management model should be set out in the charter.
14	Participants’ shares	The charter contains information on the size and nominal value of each participant’s share.	The foundation agreement contains the amount of the charter fund and the size of each founder’s / participant’s share.	Both documents reflect shares, but in case of discrepancy the charter has priority.
15	Participants’ contributions	The charter may contain provisions on the rights and obligations of participants, including the obligation to make contributions.	Specifically regulates the procedure, amount, methods, and deadlines for making contributions upon establishment, as well as liability for breach of this obligation.	Issues of initial contributions are better regulated in detail in the foundation agreement.
16	Distribution of profits and losses	May regulate participants’ rights to profit and other corporate matters.	Must directly contain the terms and procedure for distribution of profits and losses among founders / participants.	For two or more participants, the mechanism for profit distribution should preferably be agreed in both documents without contradictions.
17	Withdrawal of a participant	The charter must contain information on the procedure and consequences of withdrawal of a participant from the company.	The foundation agreement also contains the procedure for withdrawal of participants from the company.	The withdrawal procedure must be the same in both documents; in case of conflict, the charter applies.
18	Transfer of a share to another person	The charter must contain the procedure for transfer of a share or part of a share to another person.	The foundation agreement contains the procedure for admission of third parties to the company.	Sale, assignment, inheritance, or other transfer of a share must be regulated in detail in the charter.
19	Document storage and provision of information	The charter must contain the procedure for storing company documents and the procedure for providing information to participants and other persons.	The law does not include this issue among the mandatory content of the foundation agreement.	Participants’ information rights are better fixed in the charter.
20	Practical role after LLC registration	Remains the main operative document of the company throughout its entire activity.	Retains significance as a document recording arrangements of founders / participants, but is less significant for third parties.	In corporate disputes, transactions with shares, and management issues, the charter has key importance.