Tashkent, Uzbekistan (UzDaily.com) — The Legislative Chamber of the Oliy Majlis reviewed a draft law in its first reading aimed at improving the operations of limited liability companies (LLCs).

In recent years, Uzbekistan has undertaken consistent reforms to promote entrepreneurship. However, an analysis of the current legislation has highlighted the need for further improvements to the Law “On Limited Liability Companies” and the introduction of modern corporate governance principles.

Currently, the legislation lacks clear regulations on the rights of company participants to conclude corporate agreements, the procedures for establishing branches and representative offices, and mechanisms for alternative dispute resolution, such as mediation or arbitration.

Additionally, legal gaps have been identified in the election and functioning of supervisory boards, their decision-making processes, and the regulation of executive management responsibilities.

The draft law proposes provisions to address these shortcomings and incorporate best international corporate governance practices. It introduces the possibility of operating not only under a license but also based on other types of permits, including a notification-based system. The bill also establishes a clear procedure for creating branches and representative offices.

Special attention is given to expanding the rights of company participants, allowing them to conclude corporate agreements to exercise their corporate rights and resolve disputes through mediation or arbitration.

Parliamentarians noted that the provisions enabling supervisory board decisions to be made remotely upon request and allowing the transfer of shares in the company’s charter capital through a simple written agreement would enhance the efficiency of LLC operations.

The adoption of this law is expected to strengthen the rights and legal interests of company participants and introduce a modern corporate governance system in LLCs.

The draft law received the approval of deputies.