Economic partnership-a new legal form

From July 1, 2012 in the Russian Federation there will be another legal form relating to commercial organizations-economic partnerships

A business partnership is a commercial organization established by two or more persons (individuals or legal entities).

The founders of a business partnership can be both individuals and legal entities, both Russian and foreign persons. However, the Federal law may prohibit or limit the participation of certain categories of citizens or legal entities in partnerships in the future.

The most interesting provision in the law is that the participants have the right to determine independently how the legal entity will be managed, unlike other legal entities, such as LLC or JSC, for which the legislation imperatively establishes the process of decision-making and formation of management bodies. Moreover, the law provides for economic partnerships on an equal basis with the Charter of the partnership management agreement, which is confidential and is not subject to state registration and disclosure to third parties, unlike the Charter.

The form of economic partnership was created primarily for the implementation of innovative projects, however, it is expected that this form, due to its flexibility, will also be of interest to other people. Some experts even suggested that economic partnerships will soon replace limited liability companies, which were the most popular legal form in Russia until that time.

A partnership may not be a founder or a member of other legal entities, except for unions and associations.

The partnership shall be liable for its obligations with all property belonging to it; the partnership members shall not be liable for its obligations and bear the risk of losses within the amount of their deposits. The government of the Russian Federation may establish standards for the adequacy of own funds of partnerships engaged in certain activities.

The partnership is not entitled to issue bonds and other securities. It also does not have the right to advertise their activities.

The management bodies of the partnership are the sole Executive body (General Director, President, etc.), elected from among the participants of the partnership in the manner and for the period determined by the Charter or by unanimous decision of all participants for the entire period of the partnership. Other bodies are formed as convenient for the founders of the partnership.

Nikishenko, Andrey
East-European Consulting LLC"