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MAIN FORMS OF PROPERTY RIGHTS OF BUSINESS ENTITIES AND
THEIR GUARANTEES
Tleumuratov Mambetbay
Candidate of Legal Sciences, Associate Professor, Faculty of Law,
Karakalpak State University,
Tursinbaeva Diana
2nd year Master's student of
Karakalpak State University,
Law and Business
https://doi.org/10.5281/zenodo.15496771
Annotation
This topic covers the main forms of property rights of business entities -
private property, state property, cooperative and mixed forms of property. The
economic and legal characteristics of each form, their role in the activities of
economic entities, are analyzed. Guarantees of property rights within the
framework of legislation, state protection, rights to possess, use, and dispose of
property, as well as measures to prevent violations of these rights, will also be
considered. The topic reveals the importance of property rights and their
guarantees in ensuring the stability of the business environment.
Keywords:
Private property, State property, Cooperative property, Mixed
property, Business entities, Legal guarantees, Use of property, Legal protection,
Right of possession, use, disposal, Business environment, Violation of
property rights
The economic sources of entrepreneurship consist of private and state
forms of ownership. Article 167 of the Civil Code stipulates that private and
public forms of ownership form the basis of Uzbekistan's economy. Private
property is enshrined in Article 16 and Articles 207-211 of the Civil Code of the
Republic of Uzbekistan. The subjects of private property rights are citizens,
business partnerships and companies, cooperatives, public associations, public
funds and other non-state legal entities.
Objects of private property rights
Any property may be private
property, except for certain items prohibited by law. Although citizens' property
is said to consist of a "private" form of ownership, this property should be
organized at the expense of income received as a result of work in state
enterprises and public organizations, have a consumer character, and be aimed
at ensuring the personal material and cultural needs of the citizen. Although it
was economically sufficient to carry out entrepreneurial activity on the basis of
private property, it was legally impossible. The fact that the main means of
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production belong only to the state, and although they are considered the
property of the entire population, the fact that it is not clear who is the owner of
the property and who is responsible for it, led to the emergence of neglect,
indifference, general laziness, and indifference in society. This situation did not
allow for fostering in citizens an interest in work and the sense of initiative
necessary for entrepreneurial activity. The forms of ownership are also defined
in the Law of the Republic of Uzbekistan "On Property." In it, it is established
that private property, joint property, partnership (community) property, and
property of legal entities and individuals of other states and international
organizations consist of property.
Property Law
- The legal concept of property law is defined in Article 164
of the Civil Code of the Republic of Uzbekistan, according to which property law
consists of the right of a person to possess, use, and manage property belonging
to them at their own discretion and in their own interests, as well as the right to
demand the elimination of any violation of their property right, regardless of
who it is. Victorious property consists of state property, which is represented in
two forms: property of the Republic of Uzbekistan and municipal property.
Entrepreneurial activity can also be carried out on the basis of common
property, that is, property belonging to several citizens and legal entities.
Common property can consist of joint and shared ownership. The object of
property rights is land, mineral resources, inland waters, the air basin, flora and
fauna, buildings and structures, products, residential buildings and apartments,
trademarks, industrial designs, inventions, utility models, industrial designs,
topology of integrated circuits, breeding achievements, trademarks and service
marks, equipment, items of material and spiritual culture, money, securities and
other property located on the territory of the Republic of Uzbekistan; a person's
ability to work. If the shares (stakes) of each of the owners of property rights in
the common property belonging to them are clearly defined, such property is
called shared property. In shared ownership, if their shares are not clearly
defined by law or by agreement of the participants, the shares are considered
equal.
According to the general rule, joint property is jointly owned and used by
its owners. However, they may have agreed among themselves and established a
different order. Ownership of such property requires the consent of its owners.
Under the influence of the development of entrepreneurial activity, each
participant in the joint property right is granted the right to conclude
agreements on this property with the consent of all of them. For example, when
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carrying out family entrepreneurship on the basis of property belonging to
spouses on the right of common joint ownership, one of them participates in
business transactions on behalf of the spouses with the consent of the husband
or wife, which must be confirmed during the registration of the individual
entrepreneur. Entrepreneurial activity can be carried out on the basis of and
with the participation of property rights in various forms. If entrepreneurship is
carried out on the basis of common property, a corresponding share of each
entrepreneur is established, according to which the income received as a result
of entrepreneurship is also distributed among the members depending on the
size of the shares. The subjects of property rights are citizens of the Republic of
Uzbekistan, communities, their associations, public organizations and religious
organizations, family and other associations of citizens, local self-government
bodies, Councils of People's Deputies of all levels and state administration
bodies authorized by them, legal entities and citizens of other states,
international organizations, other states, and stateless persons. Several legal
entities and citizens may be subjects of one property. According to Article 217
of the Civil Code, the shares of participants in shared ownership are considered
equal if they cannot be determined by law and have not been established by
agreement of all its participants. In the event of a dispute over shares arising in
the process of carrying out entrepreneurial activity, such a dispute is resolved by
the court on the claim of each of the common owners.
Conducting Entrepreneurial Activity Based on Private Property Article 207
of the Civil Code explains the right of a person to own, use, and manage property
acquired in accordance with the law. Commercial organizations carrying out
entrepreneurial activity on the basis of private property rights, i.e., legal entities
whose main goal of activity is to obtain profit, may be established in the form of
business partnerships and companies, production cooperatives, unitary
enterprises, and other forms stipulated by law (part two of Article 40 of the Civil
Code). Commercial organizations are considered one of the widespread
organizational and legal forms of collective entrepreneurship in property
relations. Associations similar to this form formed by entrepreneurs are called
companies or firms in continental law and corporations in Anglo-American law.
Specifics of Conducting Business Activities Based on the Right of Economic
Management and the Right of Operational Management The concept of the right
of economic management and the property capacity of a legal entity endowed
with this right are provided for in Articles 176, 177 of the Civil Code. According
to Article 176, a legal entity endowed with the right of economic management
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possesses, uses, and manages the property assigned to it as a subject of property
rights. An entrepreneur with this right, at their own discretion, carries out any
actions that do not contradict the law. The powers of enterprises that are not
subjects of property rights but have the right of operational management of
property are defined in Articles 72, 178 of the Civil Code. Rights of the owner of
property in economic management The owner of property in economic
management, in accordance with the law, decides on the establishment of the
enterprise, determining its sphere of activity and goals, its reorganization and
liquidation, appoints the director (head) of the enterprise, and monitors the use
and maintenance of the property belonging to the enterprise for its intended
purpose. The owner has the right to receive a portion of the profit from the use
of property under the economic management of the enterprise. A unitary
enterprise is not entitled to sell, lease, pledge, transfer as a contribution to the
authorized capital of business partnerships and companies, or otherwise
manage immovable property belonging to it on the basis of the right of economic
management without the consent of the owner. He freely manages other
property belonging to the enterprise. The owner of property assigned to a state
enterprise or institution has the right to seize excess, unused, or improperly
used property and manage it at his discretion. Ownership of the property of a
state enterprise A state enterprise has the right to alienate or otherwise manage
the property assigned to it only with the consent of its owner. A state enterprise
independently owns the products it produces, unless otherwise provided by law.
The procedure for distributing the income of a state enterprise is determined by
its owner. Ownership of the Institution's Property The Institution is not entitled
to alienate or otherwise own the property assigned to it and the property
purchased with the funds allocated to it according to the estimate. If, in
accordance with the constituent documents, the institution is granted the right
to engage in income-generating activities, the income received from such
activities and the property acquired at the expense of this income shall be
transferred to the independent disposal of the institution and recorded on a
separate balance sheet. If, in accordance with the constituent documents, the
institution is granted the right to engage in income-generating activities, the
income received from such activities and the property acquired at the expense of
this income shall be transferred to the independent disposal of the institution
and recorded on a separate balance sheet. Emergence and termination of the
right of economic management and operational management The right of
economic management or the right of operational management of property
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assigned to a unitary enterprise or institution by decision of the owner arises
from the moment the property is transferred to him at this enterprise or
institution. Products, products and income received from the use of property
under economic management or operational management, as well as property
arising under a contract or on other grounds of a unitary enterprise or
institution, also transfer to the economic management or operational
management of the enterprise or institution in the manner prescribed for the
emergence of property rights. The right of economic management and the right
of operational management of property are terminated by decision of the owner
and on other grounds provided for by law.
The rules on property rights apply to the right of economic management or
operational management, unless otherwise provided by the Civil Code and other
legislative acts.
Consequently, entrepreneurial activity can be carried out by both owners
and non-owners of property rights. Subjects of entrepreneurial activity, as a
general rule, are owners of property rights; if they do not have such a right, they
acquire the right of economic management or the right of operational
management in relation to the property assigned by the owner and carry out
entrepreneurial activity within the limits of the powers established by the
owner (Articles 71, 177 of the Civil Code). The main goal of carrying out
entrepreneurial activity is to obtain income (profit). To achieve this goal, the
entrepreneur plans their activities in accordance with market requirements,
strives to produce and purchase products that are necessary and necessary for
customers, and actively participates in competition.
An entrepreneur allocates a certain portion of the total income received as a
result of carrying out their activities for taxes and other payments. The income
remaining at the entrepreneur's disposal from payment of payments is fully
transferred to their disposal as net profit. The entrepreneur independently
decides for what purpose to use net profit.
Property objects of business entities: fixed assets, monetary funds,
securities, intangible objects The object of civil rights may be freely transferred
to other persons or passed from one person to another in the order of universal
legal succession (inheritance, reorganization of a legal entity) or in another way,
if they are not withdrawn from circulation or their circulation is not restricted.
The types of objects of civil rights, the circulation of which is not permitted
(objects withdrawn from circulation), must be directly specified in the law.
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In conclusion,
property rights are fundamental to the effective operation
and development of business entities. The various forms of property
ownership—private, state, cooperative, and mixed—play a crucial role in
shaping the legal and economic environment of entrepreneurship. Ensuring
clear and enforceable property rights not only strengthens business confidence
but also promotes investment, innovation, and fair competition. Legal
guarantees and protections of these rights are essential to prevent violations
and ensure that entities can freely own, use, and dispose of their assets. A stable
and transparent system of property rights is therefore a key pillar of a healthy
and sustainable business ecosystem.
References:
1.
De Soto, H. (2000). The Mystery of Capital: Why Capitalism Triumphs in
the West and Fails Everywhere Else. New York: Basic Books.
2.
– A classic work discussing how secure property rights influence economic
development.
3.
North, D. C. (1990). Institutions, Institutional Change and Economic
Performance. Cambridge University Press.
4.
– Explores the role of institutions, including property rights, in economic
growth.
5.
Williamson, O. E. (1985). The Economic Institutions of Capitalism. Free
Press.
6.
– Analyzes governance structures, including property rights, in business
organizations.
7.
Uzbek Civil Code (Part I and II). (Updated version, available through
Uzbekistan's Ministry of Justice).
8.
– Legal framework of property rights and ownership in the Republic of
Uzbekistan.
9.
UNCTAD (2021). Investment Policy Review: Uzbekistan. United Nations
Conference on Trade and Development.
10.
– Discusses investment climate and property protection for businesses in
Uzbekistan.
11.
World Bank (2020). Doing Business Report: Enforcing Contracts and
Protecting Property Rights.
12.
– Comparative global data on how countries protect property rights.
13.
OECD (2019). Enhancing the Legal Environment for Business in
Uzbekistan. Organisation for Economic Co-operation and Development.
14.
– Reviews reforms in Uzbekistan related to business law and property
ownership.
