Chapter VI. Liabilities of the company and cessation of activity

Article 25
Liabilities of the company

1. The company assumes liability for its obligations and debts by all its property.
2. The shareholders incur liability for the company's obligations and debts only in the size of their shares. If the shares are not fully paid the shareholders incur liability for the unpaid value by their property.
3. Until the company is state registered the founders can undertake certain obligations on its behalf and assume full liability for these obligations. If the company would not undertake the said obligations the founders incur full liability for their non-fulfilment by all their property.

Article 26
Cessation of activity

1. The company cease its activity in compliance with the provisions of the Law of the Azerbaijan Republic ``About enterprise''.
2. In the course of liquidation of the company the liquidation commission makes payments with creditors according to the following succession and order:

   salary payment. If the company's property is not sufficient to fully redeem the salary debt, it is distributed among employees in proportion to their salaries;

   budget settlement;

   repayment of other creditor debts. If the remaining portion of the company's property is not sufficient to repay all creditor debts, it is distributed among the creditors in proportion to the sums payable to them;

   debentures redemption. If the remaining portion of the company's property is not sufficient to repay interest for all debentures, it is distributed in proportion to the debentures number;

   preference shares redemption. If the remaining portion of the company's property is not sufficient to repay all preference shares by their nominal value, it is distributed in proportion to the shareholders number;

   ordinary shares redemption. The remaining portion of the company's property is distributed among the ordinary shares in proportion to their number.

3. Claims made on expiry of the period of limitation are satisfied from the remaining sum of the property. Such claim payment period is fixed by the liquidation commission.
4. The company's property remaining after redemption of all creditors is used in accordance with a decision of the general meeting of the shareholders or founders.

   If a decision to sell the remaining part of the company's property is made, its collective body takes priority of buying this property.

President of the Azerbaijan Republic
Geydar ALIYEV
Baku, 12 July 1994,
No. 850

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