Shareholder’s Meetings VS Board of Director’s Meetings



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The Company Code of Mongolia allows the companies to decide on the organization and management of the BoD upon the approval of their Company Charter, and unless otherwise provided in a company’ s charter, the chairperson of the Board of Directors shall convene and preside at its meetings and supervise the preparation and retention of minutes of such meeting.  

Moreover, the same Company code does not provide any explicit procedure on the convocation of the BoD’s meeting, in other words does not specify what type of communication / eg tele- and/or online conference/ shall be used for the such meetings. This ‘open’ regulation might be of interest to the foreign investors or businessman who live and work abroad and have company operations in Mongolia.

The subjects to be discussed at the BoD meeting and the Shareholder’s meeting also differ The Article 76 of the Company Code of Mongolia provides the list of subjects, which belong to the full authority of the Board of Directors, including but not limited to the ones listed below:

  • The holding of regular and special shareholders meetings;
  • Election and modification of the company’s executive body and determining its authority;
  • Selection of the company’s auditor and establishment of the terms of the contract to be concluded with such auditor;
  • Conclusion of the company’ s annual report of business operations and financial statements.

Such subject matters stated above shall be decided at the BoD meetings, and the Shareholders Meeting shall make a decision regarding the decision and/or conclusion made by the BoD.  In other words, the Shareholders meeting shall approve the decisions made by the BoD.  In particular, the Authority of the Shareholders’ Meeting includes:

  • Consideration and approval of reports prepared by the Board of Directors with respect to the company’ s annual operations and financial statements;
  • Other proposals submitted to the meeting by the decision of the Board of Directors and others. For such reasons, the companies shall know the different legal provision concerning these two authorities in order to avoid any adverse legal consequences that might occur.

Patent Maintenance Fees



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A patent owner shall pay the following fees to Intellectual property office of Mongolia (IPOM) in order to maintain the validity of their patents:

  • 10000 MNT /~ 3.77 USD/ for the 1st three years;
  • 20000 MNT /~ 7.54 USD/ for the 4th-6th years;
  • 30000 MNT /~ 11.31 USD/ for the 7-10th years;
  • 40000 MNT /~ 15.09 USD/ for the 11th-15th years;
  • 50000 MNT /~ 18.86 USD/ for the 16th-20th years.

The payment for the patent validity of 1st three years shall be paid within 6 months after the decision on the issuance of patent, and the payment of further fees are to be paid 6 months prior to the commencement of the preceding fee payment. In case the patent owner failed to make the payment on time, the IPOM may grant an additional 6 months and in such case the patent owner shall pay additional fees equivalent to the non-paid duration fee.

The IPOM is entitled to invalidate the patent in case of non-payment of fees within the additional 6 months. However, if the patent was invalidated on the grounds of failed payment, the patent may be renewed upon the request of patent owner within the general valid term of the patent (20-50 years).

Well Known Trademarks in Mongolia



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In case of a dispute in connection to the unfair competition and conflict of interests of your trademark, the trademark owner is entitled to apply a request for declaration of your mark as well-known in Mongolia him/herself or through representation of an authorized intellectual property agent to the Dispute Settlement Committee of the Intellectual Property Office of Mongolia.

For this purpose, the trademark owner shall file an application only in relation to one trademark and such request shall include, aside from providing basic personal and business information on the applicant and/or the authorized intellectual property agent, following information:

  • Description of the trademark for the declaration as well-known mark;
  • The name list of the well-known trademark product and services;                    
  • The date of the trademark declaration as well-known;
  • The status of the intellectual property rights of that particular trademark in Mongolia;
  • The justification/reasons for declaration of trademark as well-known mark along with their proofs and evidences.

Furthermore, the Intellectual property office of Mongolia is responsible for the public distribution of the well-known marks, yet unfortunately according to the unofficial statement, no such applications for declaration of trademark as well-known have been submitted and hence there is no list of the well-known marks in Mongolia as of today.

Well-Known Trademarks in Mongolia



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The Paris Convention for the Protection of Industrial Property, to which Mongolia joined in 1985, provides that the countries of the Union undertake, ex officio if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods.

These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well–known mark or an imitation liable to create confusion therewith. Accordingly, Article 3.1.3 of the Law on Trademark and geographical indication defines the well-known mark as “the well-known trademark in the respective sector of Mongolia and the one, which does not require any IP registration. Within its duty for drafting and adoption of the Regulation concerning the IP-related matters, the Intellectual property office of Mongolia adopted a “Regulation concerning the IP-related matters, on the determination of the trademark as being well-known” on 08th April 2014.

It is important to note that the Regulation applies only within the territory of Mongolia and covers the trademarks /it may be both national and international ones/ that are well-known to the general public of Mongolia. Those companies interested in settling the question whether their trademark may be considered to belong to this category, they shall file a request to the Dispute settlement committee of the Intellectual property office of Mongolia.

Domain Names and the Legal Framework: Part I



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Due to its singular and inimitable feature, the assigned website names constitute an “online” name card for business operators and serves as an essential tool aimed at building and maintaining their position in the market. Such assigned names of websites are extended by the so-called domain name extensions/ top-level domains/ such as .com, .de, edu.com or gov.mn, which illustrate the country of operation or the type of operation.

The legislations of very few countries including Singapore allow granting of the registration and usage rights of their country’s domain name extensions only to those companies, that have been duly registered in these respective countries. However, the laws and regulations of Mongolia do not provide such restriction or prohibitions. In other words, Mongolia’s official domain extension name “.mn“ may be registered not only by local companies, but as well as by any foreign entity, who wish to promote their operations to Mongolian consumers and/or perhaps to protect their world-wide known brand in Mongolian market.

In Mongolia, the relations concerning the establishment of communications network, the operations and protection thereof and the proper furnishing with the high-quality communications and information technology products and work services to citizens and legal entities is regulated by the Law on Communications. The Amendments to this Law dated 30th May 2019 provide that the Communications Regulatory Commission composed by the Government of Mongolia shall be in charge for the adoption of the Procedure related to the registration and usage of domain names and the execution monitoring thereof.

According to the unofficial statement from the Communications Regulatory Commission, the working group responsible for drafting of these Procedures has been established. As a whole, the state policy and the legal framework with regard to communications, in particular internet and domain names, are vague and unsophisticated. On 05th June 2019, the Provisional committee for digital policy at the Mongolian Parliament adopted a Resolution on the Directives to the Government of Mongolia /GoM/ and pursuant to Article 12 of the Resolution, the GoM shall establish the legal environment concerning domain names and define the state policy in relation to this matter.

Mining License Renewal



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Do the originals of the Mining Licences need to be taken physically to MRPAM for the annual registration?

The license-holder is obliged to pay license fees annually in order to keep the license valid.   When you pay the annual license fee the original mining license certificate is required to be taken physically to MRPAM  (Mineral Resources and Petroleum Authority of Mongolia) and make the appropriate record on the annex of the license certificate.

According to the internal rule of MRPAM, when MPRAM receives original documents such as mining license, request letter, license fee and MRPAM will provide the receipt confirmation. The receipt confirmation shall contain the documents received by the MRPAM and the date on which the license certificate was recorded the annual payment will be returned to the license holder or authorized person.  Practically speaking, the registration will take 3-7 days depending on the workload of MRPAM. Please note that if license holder is unable to do the annual payment and registration, an annual registration could be done with MRPAM if agent has a proper POA to act on behalf of the license holder. 

What’s the process for in case of the Mining Licences were lost or damaged and can the Mining Licences be reissued?

MRPAM will re-issue the mining license and following documents are required when apply for new license certificate:

–          Official request letter to reissue the license;

–          A receipt of the stamp duty fee of 250 000 MNT for mining license and 200 000 MNT for exploration license paid to MRPAM;

–          Announcement of invalidation of the lost license in the newspaper (piece of announced newspaper including the name, date, number of the newspaper);

–          A copy of Company certificate issues by the LERO;

–          Completed application form (reissuance of license) (available at MRPAM’s website to download)

Obtaining Lottery Permits



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With today’s blog we aim to provide you the information regarding the documents required for obtaining the special license of the lottery operations. In order to submit the request for obtaining the special license permit, you require following document listed below.

  1. Application for the special license
  2. The state registration certificate
  3. The state stamp duty fee payment /240 000-600 000/
  4. The lottery operation type, and the business project prospectus
  5. Audited financial report of the latest quarter
  6. The bank guaranty and information on the taxation loan
  7. The procedures and norms regarding the allocation of lottery profits
  8. Lottery tickets, or any other documents, templates and samples of lottery, its requirements, criteria, notes, drawings or signs, as well as the methods for the prevention from the production of counterfeit lottery products
  9. The procedures concerning the ticket checking during the lottery winning and its payment
  10. The feasibility study on the lottery operation, the financial funding of the lottery costs and the preliminary calculation of the lottery revenue
  11. Market analysis of lottery operation
  12. The technical requirements for the lottery equipment
  13. The Procedure on the registration of the distributed and non-distributed tickets
  14. The Procedure on the re-allocation and storage of non-distributed tickets
  15. The Procedure on the storage of the winning prize not claimed by the winner and the distribution of the winning prize after the termination of the lottery timeframe.
  16. In case, the lottery shall be operated via online, then the contract between the IT operators, companies and a detailed and understandable description of the project

With the next blog we will provide you a detailed information concerning the special permit for lottery operations, how and where you can get the permit and things to consider.

Legal provisions regarding the inheritance succession



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Inheritance succession means the manner in which the property is distributed or transferred after the death a person either by his/her own will or by legal provisions.

Pursuant to the Mongolian legislation following persons are entitled to the devolution of the property and are deemed as rightful heirs:

  • Husband, wife /the marriage shall be duly registered/, child and adopted child, child born after the death of the person, parents and adopted parents.
  • If persons stated above are absent or such people denied the interitance succession, then grandparents, brothers, sisters and grandchildren.
  • If persons stated above are absent or such people denied the interitance succession, then great-grandchildren.

In case the rightful heirs mentioned above did not reside at the same address together with the deceased person, then he/she shall file the request on the receipt of the inheritance property to the notary within 1 year upon the date of the death of the decedent. If, however, both the decedent and the rightful lived at the same address such requests are not required.

Moreover, if they failed to file such requests, it shall be deemed as denial from the inheritance. Also, one shall register the request on the denial from the inheritance within 3 months after the death of the decedent.

In case there are several heirs, then the covenant and settlement regarding the allocation of the property to be inherited may be certified at the notary. If the related parties fail to do settle the dispute amicably, then such succession dispute is a subject of the court jurisdiction.

One shall also consider the fact that the succession is not restricted solely to the property and its associated rights, but the obligations and liabilities of the decedent shall be devoted to the heir in accordance to the inherited property.

The heir shall submit the “Request on the certificate of the inheritance succession” at the notary of the district where the decedent resided and the “Certificate of the inheritance succession” is granted 1 year after the death of decedent.

Benefits of Notarial Notice Deed in Mongolia



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A notarial notice deed is a legally enforceable document of a notary produced based on the payment proof during the notarization of contract with an aim to secure the return of money or property and secure the pledge.

If you have a notarial notice deed, you can easily settle the disputes related to the non-performance of the agreement because instead of undergoing three instances at court proceedings, the judge shall issue for you an order obliging the other party to perform the obligations under the Agreement.  Moreover, you can also save court costs ad there is no requirement to pay the State stamp duty as in the court litigations. Therefore, in case one of the Parties failed to satisfy the Agreement performance in good faith and on a voluntary basis, upon the submission of the judge order and the execution deed at the Executive agency of court decision within 7 days after the issuance of the execution deed an enforcement procedure for the performance of obligations under the Agreement shall be commenced.

And these are the requirements for the notarial notice deed that can save both time and money:

  • To have a provision in the Agreement stating that the Parties shall perform the obligations under the Agreement in “undisputable manner” ,
  • The Agreement and the documents shall be notarized,
  • Not more than 3 years shall have passed after the commencement of claim rights,
  • Parties shall have accepted /no dispute or conflict/ the payment under the Agreement,
  • There is no court decision regarding this same Agreement.

Contracts and the Role of Notaries



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In contract law relations, notaries have a main function to provide legal counseling and assistance to the contract parties before and upon the conclusion of the contract.

Upon the certification and authentication of the contract, notaries are obliged to explain to the parties the contract’s content, legal consequences and liabilities in case of its breach. Furthermore, notaries shall clarify if the parties are concluding or have concluded the contract on the basis of equal rights without any pressure or any other manipulative factors, and whether the contract fully expresses the clients’ will, purpose and interests, if all contract parties are completely aware of the potential and factual consequences. In case there is no violation of such circumstances, the notaries shall finally make a certification of the contracts.

The Civil code of Mongolia and other related legislation provide following contracts to be necessarily certified and authenticated by notaries:

  • Contract on the transaction of immovable properties
  • Contract in relation to the marital property
  • The settlement on the sole ownership of apartments
  • Contract on the transfer, limited property and usage of the present properties
  • Gift promises of certain properties
  • Contracts on support and care
  • Contracts and settlements on the duty performance
  • Contracts on the bank deposit of money and securities

Finally upon the request of the parties, notaries may also certify any contracts, which do not require any notarization, unless such contracts comply with legislation.