Corporate Law at Azerbaijan
Here’s an overview of Corporate Law in Azerbaijan:
🇦🇿 Corporate Law in Azerbaijan
1. Legal Framework
The primary legislation is the Civil Code of the Republic of Azerbaijan, which includes detailed provisions on business entities and corporate governance.
Other relevant laws include:
Law on Joint Stock Companies (1995, amended)
Law on State Registration and State Register of Legal Entities
Tax Code
Sector-specific regulations (e.g. banking, insurance)
2. Types of Business Entities
Azerbaijan recognizes several forms of legal entities. The most common corporate forms include:
a. Limited Liability Company (LLC) – Məhdud Məsuliyyətli Cəmiyyət (MMC)
Most common corporate form, especially for small and medium-sized enterprises.
Liability of members is limited to their contributions.
Minimum capital requirements: No statutory minimum.
May be established by one or more persons.
b. Joint Stock Company (JSC) – Səhmdar Cəmiyyət
Used for larger enterprises or when public offering of shares is expected.
Two types:
Open JSC (OJSC): Shares are publicly tradable.
Closed JSC (CJSC): Shares are privately held.
Minimum charter capital for an OJSC: AZN 4,000; CJSC: AZN 2,000.
c. General and Limited Partnerships
Less common; partners have unlimited or mixed liability depending on structure.
3. Company Formation
Companies must register with the Ministry of Economy (through the Tax Service).
Registration can now be done electronically (including e-signature verification).
Documents include charter, founder's decision, and application forms.
4. Corporate Governance
LLC: Managed by an executive body (director or board). Major decisions are made by the general meeting of participants.
JSC: Governed by a General Meeting of Shareholders, a Supervisory Board (optional in smaller JSCs), and an Executive Body (Board or CEO).
Corporate governance requirements for public JSCs are stricter, especially if listed.
5. Shareholder Rights and Duties
Shareholders have rights to:
Vote on key matters
Receive dividends
Access company records
Minority shareholder protections exist, though practical enforcement can be inconsistent.
6. Mergers, Acquisitions, and Insolvency
Regulated by the Civil Code and the Law on Antimonopoly Activity.
M&A deals that could restrict competition require notification to the State Service for Antimonopoly and Consumer Market Control.
Insolvency is governed by the Law on Insolvency and Bankruptcy.
7. Recent Developments
Ongoing reforms to modernize the business environment and align laws with international standards.
E-government services have streamlined registration and compliance.
New rules introduced to improve corporate transparency and audit obligations, especially for large and public-interest companies.
Summary Table
| Feature | Description |
|---|---|
| Main Law | Civil Code, Law on JSCs |
| Regulator | Ministry of Economy |
| Popular Forms | LLC (MMC), JSC (OJSC/CJSC) |
| Min Capital (LLC) | No minimum |
| Min Capital (OJSC) | AZN 4,000 |
| Registration | State Tax Service (online possible) |
| Gov. Focus | Digitalization, corporate governance reform |
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