Comparative forms of doing business in Russia and New York State – proprietorships, partnerships, and limited partnerships
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Comparative forms of doing business in Russia and New York State
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Since 1991, the former USSR has undergone two revolutionary events: it has opened its doors to capitalism, and it has been divided into several independent countries. (1) Russians are increasingly interested in business and the international marketplace
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This paper will look at three business forms: proprietorships, partnerships (including Russian simple partnerships), and limited partnerships. These were selected because many businesses begin as proprietorships or partnerships. Also, this discussion will give the reader an opportunity to become familiar with Russian terminology and the Russian legal system before reading about the more complicated forms of organizations (corporations, joint stock companies, etc.). Discussion of other forms is planned for a future paper.
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A review of a core sample of several law textbooks, (2) as well as discussions with several academicians, have enabled the authors to identify a number of areas of interest regarding the formation, basic operation and termination of, and transferability of interests in, business forms–these areas together comprise the focus of this paper. No effort has been made herein to discuss, in detail, the operation of these forms
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Each section of the paper (proprietorships, partnerships, and limited partnerships) will begin with a discussion of the more interesting similarities and differences in the laws regarding that form, and will end with a table summarizing the characteristics of the form under both sets of laws. The first eight items in each table deal with the creation of the form
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In writing this paper from the Russian perspective, the authors have chosen to focus on one sub-unit: the Krasnoyarsk territory. Because Russian business law is primarily governed by the Civil Code, the differences from one sub-unit to another are minimal. The Krasnoyarsk territory was selected because its practice is most familiar to the authors. Also, the Krasnoyarsk territory is the second largest sub-unit in the Russian Federation. In writing this paper from the American perspective, the focus was much more difficult to select. Discussing the laws of each of the states would be inordinately unwieldy. In light of this, the authors decided to use the laws of the state of New York because it is generally viewed as a commercial state, and because its laws are most familiar to them. While there are many similarities between New York laws and those of other states, there are important differences as well, which require solid theoretical and practical extrapolation dependent on more in-depth analysis.
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Russia is a single country. It is comprised of 89 “sub-units”: twenty-one republics, (3) six territories, (4) forty-eight regions,a one relation, (6) two federal cities, (7) one autonomous region,a and ten autonomous areas. (9) Within each of these sub-units (except the federal cities) there may be a number of cities
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Under Russian practice, many things (such as traffic fines, filing fees, etc.) are determined with reference to the “official minimum monthly salary.” (11) This is determined at the federal level, applies throughout the country, and for most purposes, is equal to 450 rubles. (12) The official minimum monthly salary is a minimum wage that applies to private firms. In practice, however, it is extremely difficult to obtain employees at this rate. It is also used for compensating workers who are injured while on the job.
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For purposes of registration fees, the official minimum monthly salary is set at 100 rubles. (13) This rate applies to many of the examples used in this paper, and also to fines (criminal and administrative). In the remainder of the paper, the rate of 100 rubles will be used. As of June 2002, there were approximately 31.5 rubles to the US dollar
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Law can be seen to come from three sources: common law (precedent), civil law (statutes), or Ecclesiastical law (religious and/or ideological). Russian law is largely based on statute. American law is largely based on precedent as well as statutes. There is a clear hierarchy of authority in Russian law. The first and most important level is statutory: the constitution and others. The constitution has supreme legal force and is applicable throughout the Russian Federation. (14) Neither the federal government, nor the governments of the subjects, may adopt laws that contradict the constitution. (15) The current constitution (adopted by nationwide vote on December 12th, 1993) is the fifth in Russian history (there having been four during the Communist era), and is the first to be enforceable in Russian courts. (16) Thus, a Russian could argue his/her legal position in court based only on the authority of the constitution, without any additional legislation.
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There are two types of federal statutes: federal constitutional statutes and federal statutes. (17) Federal constitutional statutes have more power than federal statutes. They are adopted on the most important matters (for example, individual restrictions of rights and freedoms, procedure for the admission of a new sub-unit to the Russian Federation, the formation of a new sub-unit within the Russian Federation, etc). (18) The most important federal statutes are codes. In the regulation of business relations, the Civil Code is extremely important. Other codes, such as the Taxation Code or the Criminal Code, also regulate business relationships. (19) Usually if other federal statutes contradict a code, the code is applied. (20) If there is a conflict between statutes of equal importance, the most recent legislation usually applies. (21)
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Decrees of the President are the second level of authority. While these are theoretically of lesser importance than the federal statutes, and cannot contradict them, in practice a Decree of the President would have comparable weight to a federal statute in areas where there are no such statutes. (22) Orders of the Government (acts promulgated by executive agencies) constitute the third level of authority
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Officially, judicial precedent is not a source of law in Russia. (25) But, in the authors’ opinions, it is a source in fact. For example, the courts of general jurisdiction use opinions and authoritative explanations of the Supreme Court of the Russian Federation in reaching their decisions. Furthermore, the arbitration courts use opinions and authoritative explanations of the Supreme Arbitration Court of the Russian Federation to help resolve problems that are not regulated by statutes.
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Because Russia is a federation, jurisdiction is divided into federal, sub-unit, and joint jurisdiction. In areas that are not within the exclusive jurisdiction of the Russian Federation, or the joint jurisdiction of the Russian Federation and its sub-units, the sub-units have the right to establish their own legal regimes, including the adoption of legislation. (26) Areas of Federal jurisdiction include: adoption and amendment of the constitution, regulation and protection of the rights of national minorities, civil law and procedure, criminal law and procedure, etc. (27) Areas of joint jurisdiction include: regulation and protection of the rights and liberties of individuals, issues of possession, use and management of land, mineral resources, water, and other natural resources, protection of the environment and ecological safety, labor law, family law, etc. (28) Laws regarding forms of doing business are generally part of the Civil Law.
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The general rule with the respect to the laws of the Soviet Union is embodied in the Decision of the Supreme Soviet of the Russian Federation of December 12, 1991, N 2014-1. Legal acts of the Soviet Union have legal force and are applied throughout the territory of Russia to the extent that they do not contradict the Russian Constitution, Russian legislation, or the Agreement on the Formation of the Commonwealth of Independent States. (29) This provision is very vague and requires a careful analysis of policy issues. Pre-soviet legislation no longer applies anywhere in Russia.
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There are two types of business capacity under Russian law: general capability, and special capability. Forms with general capability–all commercial entities except unitary enterprises–may engage in any legal activity. (30) Forms with special capability may only engage in those activities specifically enumerated in their charter. (31) Proprietorships and simple partnerships, because they are not legal entities and therefore also not commercial entities under Russian law, would not have general capability. Because citizens have general commercial capabilities, (32) however, the individual proprietor and the partner of a simple partnership may engage in any legal activity.
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II. TERMINOLOGY AND BASIC PRINCIPLES
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Examination of Russian business organizations and statutes reveals that Russian terminology regarding forms is sometimes different from that used in New York. Russian law, for example, refers to two basic groups: citizens and legal persons. Within the category of legal persons, there is reference to “companies”–a term which has no formal meaning in New York. (33) Figure 2 is a graphic of Russian forms and their places in Russian law.
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In Russian law, the term entity has a specific and important meaning. Russian law in the business area applies to all entities. A legal provision that applies to an entity is not repeated in the part of the Civil Code dealing with each particular form. Thus, for example, if the Civil Code states that an entity shall have a perpetual life, this provision would not be repeated in the parts of the Civil Code dealing with partnerships, limited partnerships, joint stock companies, etc. Those parts would merely define the form being dealt with as an entity, and all entity-related provisions would apply to that form. (34)
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According to Article 48 of the Russian Civil Code, a legal entity is an organization that owns, exercises jurisdiction over, or manages property and is liable for that property
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Under Russian concepts, the proprietorship fails all these tests, but particularly number two. The simple partnership fails tests number three & four. The partnership and limited partnership meet all four tests. (35)
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In U.S. law, there are two distinct theories: the entity theory and the aggregate theory. The entity theory is based on civil law, and applies in several states. It holds that a partnership is an entity apart from the participants. In this view, the partnership would be the primary actor, and partners would be agents for the partnership. Actions would be undertaken in the name of the partnership. The aggregate theory is more typically found in the common law states, and holds that a partnership is merely a combination of the individual partners. The principal actors are the individual partners, and actions would be taken by one or more partners on behalf of themselves and the others. (36)
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New York law in this area is not entirely clear. One author suggests that, in addition to there being no clear statutory guidance, “the courts have further muddied the waters by either ignoring the statutory language and creating new definitions, or applying common law elements of profit sharing, joint control, and intent.” (37) Furthermore, the Internal Revenue Service may take a position that contradicts state law. (38) Other references state that while partnerships are generally not treated as entities under New York law, they may be for some purposes. (39) The revised Uniform Partnership Act, on the other hand, treats partnerships as entities. (40)
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The importance of this distinction (entity or not) may lie in whether a creditor would have to sue the partnership (entity) or the individual partners (aggregate). It might also be important in determining the effect of a change in the composition of the partners (e.g. if a partner retires or a new partner is admitted). It seems logical that if the partnership is an entity, the change in composition has no effect on the entity. If, however, the partnership is an aggregate, a change in composition results in a new group to be aggregated.
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Another factor that would seem relevant is the need for government action to create the form. It seems logical that if a government action is necessary to create a form, it is more likely to be considered an entity than if no such action is required. Partnerships can be created without government action
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Prior to 1991, during the communist era, Russia allowed virtually no private business activities for approximately seventy-five years (more than a generation). Therefore, one might assume that Russia has no experience in the business area. However, as is often the case with assumptions, this is not correct.
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Partnership, for example, is a form of business that has a long history in Russia. The first mention of partnership in Russian legislation was made in the Decree of the Church Council of 1649. Indisputably, partnerships existed before this decree, but only moral principles and custom regulated their activities. At the end of the nineteenth century, K. Pobedonoscev wrote: “The partnership’s contract is a very usual one for Russian people.” (42) One of the main characteristics of partnerships before the revolution of 1917 was that the partnership was not a legal entity. The authors who wrote about this peculiarity considered it a unique result of the collective nature of Russian society. For example, K. Pobedonoscev wrote that the relationship between members of this unit (partnership) was very close, and there was no contrast between a person and the collective. As a result, one could treat the unit as a legal entity, even though, in fact, it was not one. (43) So, in Russian legislation of the nineteenth century, there was no difference between the partnership as a legal entity and the partnership as a contractual relationship. Today, Russian legislation recognizes this difference. (44)
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In the nineteenth century, persons desiring to do business created limited partnerships if they wished to attract investments. At that time, there were no limited liability companies in Russian legislation. Shortly before the beginning of the twentieth century, share partnerships had become a popular form of doing business. Those share partnerships were prototypes of future stock companies, such as corporations,joint stock companies, etc. At that time, when a person began a business, the choice was in favor of share partnerships. (45) In the late nineteenth and early twentieth centuries, business activity continued, and Russian law and experience were shaped partly by the influence of and interaction with European countries. (46)
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Business also has a long history in the United States. (47) Eichner and Ross, (48) in discussing competition in the colonial United States, refer to the use of partnerships for both ongoing business relationships and single enterprises (what we would refer to today as joint ventures). (49) Partnerships began as a means of dealing with the general difficulties of doing business.
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Wherever one looks at seventeenth- and eighteenth-century merchant behavior, one finds the pervasive preference for the family as a basis for commercial partnerships, in order to minimize the risks of extending credit, of trading in diverse commodities and ports, and of large-scale shipping ventures. Where no family or other personal ties could be crafted, merchants resorted to other techniques. The partnership was widely used, both as a long-term basis for carrying on commercial activity and, as was more often the case, as a one-time arrangement for a particular voyage. (50)
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Today, partnership relationships are largely statutory, based mostly on the Uniform Partnership Act or the Revised Uniform Partnership Act. (51)
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Clearly, any discussion of the intricacies of tax law is beyond the scope of this paper. A few simple principles, however, may be helpful and interesting. There are three levels of income taxation in Russia: the federal level, the subject level, and the local level. The subjects and local authorities may set taxes at any level they choose, within the limitations established by the federal government. Individual entrepreneurs pay 13% in federal taxes on their business income. They pay no income taxes at the subject or local level. (52) (Russian federal law does not authorize the subjects and local authorities to impose taxes on individual entrepreneurs.) (53)
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Partnerships, both full and limited, pay taxes at the entity level, at a maximum of 24%: 7.5% at the federal level, not more than 14.5% and not less than 10.5% at the subject level, (54) and 2% at the local level. (55)
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When a full or limited partnership distributes profits to its partners, the tax on the partner depends on the nature of the recipient. Citizens who are general partners (including individual entrepreneurs and regular persons) must pay 6% at the federal level, and pay no income taxes at the subject or local level. (56) Organizations (whether commercial or not) that are general partners, must pay 15% at the federal level, and pay no income taxes at the subject or local level. (57) Limited partners pay taxes on distributed profits at the same rates as general partners (but not all persons or entities that may, under the statute, be limited partners, may be General partners). (58)
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Simple partnerships pay no taxes. (59) Partners of simple partnerships who are individuals pay 13% in federal taxes and pay no income taxes at the subject or local level. (60) Partners of simple partnerships which are entities pay up to 24% in taxes: 7.5% at the federal level, not more than 14.5% and not less than 10.5% at the subject level, and not more than 2% at the local level. (61)
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There are also three levels of income taxation in the United States: the federal level, the state level, and the local level. The state and local authorities may set taxes at any level they choose
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Individual entrepreneurs pay varying rates of federal and state taxes on their business incomes. There are a number of variables affecting the rates at which individual entrepreneurs pay their federal and state income taxes: income level, marital status, number of dependents, amounts of applicable deductions, and the location (state) of both the business and the individual entrepreneur. Individuals pay from 15% to 39.6% in federal taxes, (63) and from 4% to 6.85% at the New York State level. (64)
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U.S. partnerships pay no taxes at the entity level (65) (unlike their Russian counterparts). (66) U.S. partnerships, whether general or limited, must file annual income tax returns, reporting total income and its allocation to general and limited partners (as appropriate). (67) Partners pay taxes on partnership income based on the allocated profits, whether or not distributed. (68) The partners are taxed based on their nature (e.g., individual, corporation).
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Partners pay different rates of tax, depending on several factors: the nature of the partner (e.g., individual, corporation), the amounts of profits earned, marital status (if the partner is an individual), types of deductions available,–and at the state level, the state in which they live and/or where the profits were earned. Partners who are individuals pay at the rates cited above for individual entrepreneurs. Partners that are corporations pay from 15% to 35% in federal taxes, (69) and pay from 5% to 8.5% at the New York state level. (70) There is a minimum annual New York State tax imposed on corporations of $325. (71) Partners which are other forms, (e.g. limited liability company, or trust) may be subject to other rates.
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In both the United States and Russia, the proprietorship is a very common form of doing business. It is limited to a single individual and is simple and inexpensive to create. In the United States, for example, there were 15,848,000 non-farm proprietorships, 1,468,000 partnerships, and 3,965,000 corporations in 1993. (72) Unfortunately the authors have not been able to obtain comparable statistics for Russia.
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Individual Russian businesspersons are not entities, but merely extensions of the individual. (73) To avoid confusion, and to maintain consistency in the discussion, this paper shall refer to the Russian individual businessperson as a “proprietor” and to his or her business as a “proprietorship.” The Russian Civil Code refers to “citizens’ business activities,” and the “individual businessman,” that the right to begin business occurs at the moment of registration, and that it does not require the creation of a legal entity. (74) The Russian “proprietorship,” because it is considered an extension of the individual, can only be created by a natural person (75) and must be established in his or her name, not in an assumed name. (76) In some cases, Russian proprietorships may be using assumed names, but such use is not sanctioned by the statutes. To begin a proprietorship in Russia, it is necessary to register it in the district of the city where the owner lives. (77) In New York, both the name of the owner and assumed names may be used. (There are certain restrictions in usage, based on the possibilities of fraud or misleading the public. (78)) In New York, only businesses conducted under assumed names must be registered
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The cost of establishing a proprietorship in Russia is one “official minimum monthly salary” unit. (81) This is currently equal to about $3.17. Considering an average Russian’s income of $100 per month (3,150 rubles per month), (82) the cost to form a proprietorship is approximately 3% of a month’s income. The cost of establishing a proprietorship in New York is $25 (assuming it is registered). (83) Assuming an average American’s income to be $2,000 per month, (84) the cost to form a proprietorship is 1.25% of an American’s monthly income. The average per capita income in New York state for the year 1999 was approximately $2,600 per month. (85) Thus, the cost of forming a proprietorship in New York is less than 1% of a New Yorker’s monthly income. Even though the absolute cost is significantly lower in Russia, it is relatively more expensive to start a business there than in New York. This is even more evident when one considers that it is always mandatory to pay the fee in Russia, but only mandatory in New York when using an assumed name.
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There are many similarities in the basic operation of proprietorships in Russia and New York. There are no required founding documents
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There are also many similarities in the transferability of interests and termination of proprietorships in Russia and New York. New owners cannot be admitted, (95) the death of the owner terminates the business, (96) ownership is generally not transferable, (97) etc.
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New York law refers to the form simply as a “partnership.” (159) Russian law, however, recognizes two different kinds of partnerships: the “full” partnership and the “simple” partnership. (160) This paper will compare the Russian full partnership and the New York partnership, and then will discuss the simple partnership.
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New York law defines a partnership as “an association of two or more persons to carry on as co-owners a business for profit.” (161) Russian law defines a partnership as a commercial organization with capital broken down into shares (contributions) of the participants. (162) Full partnerships are ones whose participants are contractually engaged in entrepreneurial activities in the name of the partnership and are personally liable. (163) Russian law requires much greater specificity as to the name of the partnership. Russian partnerships must use the names of all the partners and the designation “full partnership” or the names of one or more partners and the words “and company.” (164) New York law does not require the use of the designation “partnership,” and allows the use of the words “and company” or its equivalent (provided there is at least one partner other than those named). (165) New York law also allows the use of an assumed name (other than the name of a person), (166) while Russian law does not. (167)
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Both Russian and New York law recognize that a partnership consists of two or more participants, (168) and that participants could be any of a number of forms. Russian law, however, specifies that partnerships may be created by “individual entrepreneurs and/or commercial organizations.” (169) “Individual entrepreneurs” are people who have registered as proprietorships. (170) Thus, in order for two or more people to form a partnership, it would appear they must each first form a separate proprietorship (a step which is not required under New York law). This seems to be an attempt to protect creditors. The theory is that proprietorships are more likely to have assets than mere individuals. Russian law permits an individual to be a general partner in only one partnership (whether full or limited). (171) Under New York law, one may be a general partner in any number of partnerships, as long as one meets one’s responsibilities for each. (172)
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In both New York and Russia the partnership is relatively easy and inexpensive to form. The procedure in New York is essentially the same as for a proprietorship (except that all partnerships must register), (173) and the cost is $25
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Partnership in New York is a consensual arrangement resulting from an agreement made by the participants. (183) Although the agreement is usually founded on a written or oral expression, it may also be determined from the conduct of the parties (such conduct could result in an implied partnership, (184) partnership by estoppel, (185) etc.). Russian partnerships, however, must be based on written contracts signed by all the participants, called “founding contracts.” (186) Russian law defines the minimum contents of such a founding contract as follows: the name of the partnership, the location of the business, the procedure by which the partnership will be managed, the purposes of the partnership, the process by which the partnership shall be created, the process by which property shall be transferred to it, the process by which the founders shall participate in its activities, the terms and procedures for the distribution of profits and losses, their withdrawal from the business, and any other information required by law. (187) In addition, Russian law also requires information concerning the following to be in the founding contract: the amount of partnership capital, the sources for such capital, how each partner’s share of capital can be changed, when and how each partner shall contribute his/her/its share of the capital, and what penalties shall inure if contributions are not made as required, (188) In New York, the only requirement for creating a partnership is the agreement of two persons and/or forms to be partners. (189) It is highly desirable to enter into a “partnership agreement” defining the relationship, but it is not mandatory. Such an agreement would, in many ways, parallel Russian legal mandates, including such items as: name of the business, the profit and loss sharing ratios of the partners (allocation), management procedure (particularly who has responsibility for which areas), rules for admission of new partners, conditions under which one or more partners may leave the partnership, and amounts to be paid (and terms) to partners who no longer will be partners (due to their desire to leave, disability, or death), (190)
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Russian law requires a minimum capital investment for creating a partnership: currently 100 official minimum monthly salary units, or 10,000 rubles. (191) At current rates, this amounts to approximately $317. New York has no minimum capital requirements. While it seems unlikely that such a small requirement would be a major bar to formation of a partnership in New York, the difference in income levels between the two countries makes this requirement highly significant. Assuming an average New Yorker’s income of $2,600 per month, compared to a Russian’s income of $100 per month, a New Yorker’s income is twenty-six times that of his/her Russian counterpart. Thus, an equivalent U.S. minimum capital requirement would be approximately $8,200. This could be a substantial capital barrier, particularly if one is forming a service business. Clearly, it is significantly more costly in relative terms to form a partnership in Russia than in New York. It should be noted that while there is no minimum capital requirement for New York partnerships, there may be difficulties in demonstrating that a party who has made no capital contributions is a partner. (192)
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The basic management of partnerships is similar in Russia and New York. Decisions are usually made by majority vote, (193) partners have rights and responsibilities to participate in managing the business, (194) and the specific procedures (equality of votes, percentage of affirmative votes necessary for any particular action, etc.) can be defined by the founding contract (Russia) or the partnership agreement (New York). (195) Russian partnerships allocate profits and losses according to contributed capital
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In both Russia and the U.S., partnerships are income-reporting forms. (202) The Russian partnership is a tax-paying form (20-24%), (203) while its New York counterpart is not. (204) In the United States, the allocated income of the partnership (whether distributed or not) (205) for the partnership’s fiscal or calendar year must be included in the partner’s income tax return for the year in which the partnership year ends. (206) For example, if the partnership year ends on December 31, 2001, the partners must include the allocated income in their tax returns for whatever period includes December 31, 2001. If the partnership year ends on September 30, 2001, the partners must include the allocated income in their tax returns for whatever period includes September 30, 2001. In Russia, partners are subject to income tax on profits that are distributed during the year. (207) If a proprietor receives a distribution of profits from a partnership in any calendar year, (s)he must pay taxes on that distribution in that calendar year (Russians are subject to annual income taxation on calendar years), If a partner is a commercial organization (another partnership, a joint stock company, etc.), it is subject to income taxation quarterly, and must include in its quarterly tax base any profit distributions it receives from a partnership. Therefore it is necessary for the partnership to prepare quarterly reports. (208)
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Russian partnerships are considered to be legal entities. (209) New York generally does not recognize partnerships as legal entities, although it may for certain purposes. (210) For example, New York partnerships may own property in the partnership name, (211) and may sue or be sued in the partnership name. (212) Once formed, there are no additional costs in maintaining a partnership, either in Russia or New York. (213) A Russian partnership may do business throughout the Russian Federation, (214) and must register administratively in the district where its principal office is located. (215) It must also register with tax authorities anywhere else it does business. (2160 A New York partnership may do business throughout the State, but must register in any county where it does business. (217)
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Russian partnerships have unlimited life, conceptually close to the corporate form of doing business. (218) In New York, a partnership’s life may be limited to a particular term, (219) the achievement of an objective, (220) or be perpetual. (221) Even if unlimited, it will terminate upon a change in the identities of the partners. (222) Neither Russian nor New York law will allow a new partner into the partnership without the unanimous consent of the existing partners. (223) However, when a new partner is admitted, the Russian partnership continues without interruption
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When a partner leaves the partnership, the Russian receives his/her share of the fair market value of contributed capital, which includes undistributed profits. (226) This may be changed by the founding contract. (227) In New York a withdrawing partner will also usually receive his/her share of the liquidating market value of the partnership. (228) This may also be altered in the partnership agreement, and frequently is. (229)
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There is no true New York equivalent of the Russian simple partnership. Unlike the full partnership, a Russian simple partnership is not a legal entity, but merely a contractual relationship between two or more participants. (318) In the case of a commercial venture, the participants in a simple partnership could be individual entrepreneurs (proprietorships), and/or commercial organizations. (319) Russian simple partnerships can also be formed for non-commercial purposes, and, in such cases, all citizens and legal persons may be participants. (320) Interests in a simple partnership cannot be transferred. (321) When a new party wishes to join, it is necessary to form a new simple partnership by creating a new contract. (322) A simple partnership can survive the death of a partner if the contract allows for it
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Formation of the simple partnership is much easier and cheaper than formation of a full partnership. The contract must be in writing and signed by all the partners, (324) but need not conform to any special format, and need not be registered (thus no fees are required.) (325) There is also no minimal capital requirement. (326) Management of the simple partnership is like that of a full partnership–requiring the agreement of all the partners (327) (although this could be changed in the contract), (328) and recognizing that all partners have a right to participate in this process. (329) Allocation of profits is in proportion to their shares in the business (the same as for a full partnership), (330) and withdrawals are based on the contractual arrangements made. (331) A simple partnership may do business throughout the Russian Federation, (332) and the partners are jointly and severally liable for the debts of the partnership. (333) In the case of a non-commercial simple partnership, the liability of the partners is in proportion to their shares in the venture. (334)
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While a simple partnership must file a tax return, (335) it pays no income taxes. (336) The taxes are paid by the partners on their respective tax returns when the profits are distributed. (337) Individuals pay annually
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In comparing the full partnership, simple partnership, and New York partnership, it becomes clear that there are similarities and differences between each of the Russian forms and the New York form. Russian full and New York partnerships both require registration while the simple partnership does not
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Both Russian and New York law define limited partnerships as forms with at least one general partner, and at least one limited partner. (370) Under both Russian and New York law, the rules of partnerships apply to limited partnerships, as long as this does not violate any specific provision of the limited partnership statute. (371) General partners manage the business (372) and are subject to unlimited personal liability as they would be in a general or full partnership. (373) Limited partners have no liability beyond their investment, provided they remain as limited partners. (374) Limited partners may not participate in the management of the business. (375) Russian law specifically requires that limited partners be informed through an annual report and balance sheets. (376) The New York limited partnership is not required to publish its financial data
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Russian law allows individual entrepreneurs (proprietorships) and/or commercial organizations (other than simple partnerships) to be general partners, (379) and allows citizens and/or legal persons to be limited partners. (380) The term “citizens” means natural persons, including foreigners. (381) Legal persons include those that are noncommercial as well as those that are commercial. Thus, any business form listed in figure 2, except simple partnerships, may be a limited partner. (Any natural person or legal entity may be a limited partner
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Both Russian and New York law appear to be somewhat restrictive when it comes to naming limited partnerships, although in different ways. Russian law requires the names of the general partners to be a part of the name of the business, or, alternatively, requires the naming of one general partner and the notation “& Company.” (387) New York law does not require any such naming or notation. (388) Russian and New York law both require the use of the words “limited partnership” (both), “special partnership” (New York), or “LP” (New York). (389) New York law further prohibits the use of the following terms in the name of the business: board of trade, chamber of commerce, community renewal, state police, state trooper, tenant relocation, urban development or urban relocation. (390) The use of certain other terms is prohibited unless approval is first obtained from some governmental or quasi-governmental organization: acceptance, annuity, assurance, bank, benefit, blind, bond, casualty, doctor, endowment, exchange, fidelity, finance, guaranty, handicapped, indemnity, insurance, investment, lawyer, loan, mortgage, savings, surety, tide, trust, or underwriter. (391)
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The cost of forming a limited partnership in Russia is ten official minimum monthly salary units or about $31.70. (392) The cost of forming a limited partnership in New York is $200. (393) Using the average salary figures cited supra, in the discussion of proprietorships, (394) the filing cost in Russia is about 32 % of a month’s salary
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A Russian limited partnership must register in the district where the principal office of the business will be located, and will be allowed to do business in the entire country. (397) As in the case of a full partnership, the limited partnership must register with the tax authorities wherever it does business. (398) The documents required for registration are: a written application of the founders asking to register the newly created limited partnership, founding documents (six copies) signed by the founders, a copy of the decision of the founders to create an enterprise, a document stating that at least half of the charter capital has been paid, and a state customs receipt. (399) In practice, two other documents are required by local authorities (although there is no statutory authorization for doing so): a guaranty letter of location of the business from the owner of the building
|
|
Under Russian law, limited partnerships are based on a written “founding contract” signed by all participants. (402) The minimum contents of such a founding contract are as follows: the name of the limited partnership, the location of the business, the procedure by which the limited partnership will be managed, the purposes of the limited partnership, the process by which the limited partnership shall be created, the process by which property shall be transferred to it, the process by which the founders shall participate in its activities, the terms and procedures for the distribution &profits and losses, their withdrawal from the business, and any other information required by law. (403) In addition, Russian law also requires information concerning the following to be in the founding contract: the amount of limited partnership capital, the sources for such capital, how each general partner’s share of capital can be changed, when and how each general partner shall contribute his/her/its share of the capital, what penalties shall inure if contributions are not made as required, and the amount of contributed capital for the limited partners. (404)
|
|
In New York, limited partnerships are based on two documents: the “certificate of limited partnership” and the “limited partnership agreement.” (405) The certificate of limited partnership must contain the following: the name of the limited partnership, the county in which the office of the limited partnership will be located, a designation of the Secretary of State as agent for service of process and the address where (s)he shall mail any process (s)he receives for the limited partnership, the name and address of any registered agent and a statement that (s)he is also agent for service of process, the name and address of all general partners, the date on which the limited partnership is to dissolve, and any other items the general partners choose to include. (406) The contents of the certificate of limited partnership must also be published in two locations, at least weekly for six weeks. (407) (This requirement would also have the effect of increasing the cost of forming a limited partnership in New York.)
|
|
New York law requires a limited partnership to prepare a limited partnership agreement in writing, to be signed by all general partners. (408) New York law does not specify what the agreement must contain. (409) However, it does specify that certain elements of the limited partnership may not generally be changed without the consent of all general partners, notably: the obligation of any limited partner to make contributions, the allocations of profits and losses for tax purposes, the method of computing distributions, the voting rights of limited partners, and the procedures for amending the limited partnership agreement. (410) By implication, these are the minimum items that need to be covered in the limited partnership agreement. In addition, the statutes provide for many other items that may be included in the limited partnership agreement. (411) Finally, New York law also requires that a limited partnership maintain certain records: a current list of names and addresses of all partners showing their contributions and shares of profits and losses, a copy of the certificate of limited partnership as amended, a copy of the limited partnership agreement as amended and/or restated, and a copy of income tax returns for the latest three years. (412)
|
|
Russian law requires the distribution of profits to be addressed in the founding contract. (413) In the event no such discussion takes place, the default provisions that apply to full partnerships also apply to limited partnerships, and require profits and losses to be distributed in proportion to the partners’ shares in contributed capital. (414) Russian law does not address the allocation of profits and losses. (415)
|
|
New York law also allows the limited partnership agreement to define the distribution of profits, (416) and specifies a default method to be used when the limited partnership agreement is silent. (417) New York law allows the limited partnership agreement to allocate profits and losses, (418) but allocates and distributes profits and losses according to the partners’ capital contributions if the limited partnership agreement is silent. (419) It also makes clear that interim (during the life of the entity) distributions are expected. (420)
|
|
Limited partnerships file tax returns in both Russia and the U.S. (421) In the U.S., profits of limited partnerships are not taxed at the limited partnership level, (422) and are reported on the individual partners’ tax returns
|
|
Under Russian law, general partners of limited partnerships may only transfer their interests with the consent of all other general partners. (426) Limited partners may transfer their interests to other limited partners (who have priority) or to new investors. (427) Under New York law, all limited partnership interests are assignable, but such an assignment only transfers the right to receive distributions, and does not make the assignee a partner. (428) (New limited partners may be created by assignment from an existing limited or general partner if the limited partnership agreement so provides, or if all partners agree.) (429) After such an assignment, the existing limited partnership continues. (430) Under the limited partnership agreement in New York, limited partnership interests may be evidenced by certificates, and may be made transferable by transfer of such certificates. (431) Under Russian law, new general partners may be admitted only with the consent of the existing partners. (432) New limited partners may be admitted with the consent of the general partners. (433) Under New York law, new general partners may be admitted under the terms of the limited partnership agreement, or with the consent of all partners. (434) When a new general partner is admitted, the certificate of limited partnership must be amended. (435) New limited partnership interests may be issued by the limited partnership if provided for in the limited partnership agreement, or if all partners agree. (436)
|
|
Russian law identifies certain events as acts of dissolution (and their consequences) for general partners (of both full and limited partnerships): (437) if a partner seriously violates his or her obligation or cannot reasonably participate in the partnership, the other partners must unanimously agree to obtain a court decision removing the partner in question
|
|
Under New York law, the following are acts of withdrawal: withdrawal, assignment of an entire partnership interest, removal by remaining partners under the terms of the limited partnership agreement, certain events related to the financial weakness of the partner (such as filing bankruptcy), death, adjudicated incompetence, and in the case of certain entities, actions or events equivalent to the termination of such entities. (445) Any general partner may withdraw at any time, (446) but if (s)he leaves in violation of his or her limited partnership agreement (s)he may be liable to the limited partnership for damages. (447) Withdrawal of a general partner requires amendment of the certificate of limited partnership. (448) A limited partner may not withdraw at any time prior to the dissolution and winding up of the limited partnership, unless such action is specifically permitted in the limited partnership agreement. (449) Under Russian law, a withdrawing partner is entitled to the fair market value of his/her share of contributed capital, (450) but this may be changed by the founding contract. (451) Under New York law, the withdrawing partner is also entitled to the fair market value of his/her interest in the limited partnership, (452) unless the limited partnership agreement requires otherwise. (453)
|
|
Business forms in Russia today are not recent creations. They have a history that is hundreds of years old, which was interrupted during the communist era. Through their own traditions, and through many years of interaction with businesses in Europe, Russians have kept up with much of what has happened in the commercial world. Where they have fallen behind, they are rapidly catching up.
|
|
Russian LAW is in transition. One former student (now a businessman) commented that Russian business LAW is like a balance sheet: it tells you the status today, but you know that the next time you look at it, it will have changed. As Russians have a chance to see the operation of their systems, it seems logical that the pace of change will decrease, and there will be greater stability.
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|
There are many proprietorships in existence in Russia today. This is not surprising given the ease and relatively low cost of formation. The advantage of being one’s own boss, and the flexibility of not having to share the decision making process with others, also makes this form desirable. Finally, since there are not generally large amounts of available capital, most new businesses are small and the proprietorship is highly useful in this case. The proprietorship is probably the form of choice for an individual who wishes to start a business in Russia.
|
|
Given the relative ease and low cost of forming a partnership, the advantages of having a partner to help run a larger business, and that it has been approximately ten years since the fall of Communism, one would also expect to find a large number of partnerships in Russia. In researching the situation in the Krasnoyarsk territory, the authors found that in the year 9000, there were 18,059 partnerships and companies. (This does not include simple partnerships, as they are not registered.) (551) Based on information from Krasnoyarsk’s administrative officials, there are only six full partnerships (which were registered before 1994, when the first part of the Civil Code regulating legal entities was adopted) and only six limited partnerships, included in this total.
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|
There are several reasons that could account for this small number of full partnerships. If two or more persons wish to start a business, and they are not concerned about their personal liability, the form of choice would be the simple partnership. It offers most if not all of the advantages of a full partnership without the cost and formality, it need not be registered, and it offers participation to some who could not participate in a full partnership. In addition, the simple partnership pays no tax at the form level, while the full partnership does. Finally, Russian legislation provides for the use of cooperatives as a business form. (552) These provide some of the advantages of partnerships (for example, the right of participants to manage the business), but are devoid of some of its disadvantages (for example, the liability of the founders is limited).
|
|
If limited liability is of concern to the businesspersons involved, none of the forms discussed in this paper would be appropriate. The forms that offer this advantage will be discussed more fully in a subsequent paper. As to the small number of limited partnerships, it may be explained by the need for someone to act as a general partner (which is likely to be an unpopular position), and also by the fact that limited partnerships are subject to double taxation. Given this situation, a joint stock company or limited liability company would be preferable.
|
|
Another interesting finding is the fact that many Russian businesses (including all those forms discussed in this paper) must do business under the name(s) of the owner(s), and that the statutes do not sanction the use of assumed names. The American business may build up goodwill through its activities, which is associated with its name. Because the business can sell its name–together with a non-compete agreement (553)–to the next owner(s), the business can capitalize on goodwill. The Russian business, however, builds this goodwill in the name of the owner(s), which cannot be transferred. If Russian businesspersons cannot use assumed names, there is no simple way to realize the value of this generated goodwill. Accordingly, a Russian business owner may “create” an asset with considerable value that (s)he may never be able to realize. In practice, however, many Russian businesses are using assumed names for non-official purposes (such as storefronts, signage, etc.). It is the opinion of the authors that despite the fact that such usage is not authorized by statute, such a name (i.e., business identity) could be sold to another owner. Thus, the realization of goodwill appears to be possible by a Russian business.
|
|
Russian partnerships and limited partnerships, must, as part of the process of creating the form, file a document stating that at least half of their charter capital has been paid. (554) Where such payment is in the form of money, this document is issued by the bank that has received the money. In New York, banks will not open an account in the name of a partnership unless they see the certificate of doing business as a partnership that has been fried with the appropriate government officials. New York banks also require a copy of the written partnership agreement. (555) When asked what they would do if there were no written agreement, one bank official replied that in such case, the account would have to be in the name of the partners, not the name of the partnership (in such case it would not be a business account, but a personal joint account. (556) This is an interesting application of entity vs. aggregate theory. It seems that in New York, if one has a written partnership agreement, the partnership is treated as an entity
|
|
An interesting question arises as to the effect of a contract made by a Russian business that is not registered. A Russian citizen who does business without registration may nonetheless conclude deals (contracts). Russian LAW empowers the citizen to begin business from the moment of his registration. (557) with the State. Citizens who engage in business without registration are subject to the same sanctions as legal entities that have not registered. (558) A deal (contract) which is made on behalf of an entity by an unauthorized representative shall be treated as a deal made by the representative as an individual, (559) unless the entity subsequently ratifies it. Assuming this applies to the proprietorship (even though it is not a legal entity), a contract made on behalf of an unregistered proprietorship would be treated as a contract made by its owner. The net effect is null. However, the Civil Code estops the citizen (as opposed to the proprietor) from denying his(her) status as a businessperson with respect to contracts (s)he has made. (560) In addition, there are fines imposed by other statutes on such activities. (561)
|
|
A New York proprietor who fails to comply with the registration provisions of the statute is guilty of a misdemeanor, and shall be prohibited from maintaining a court action or proceeding until a proper certificate has been filed. (562) Failure to comply with the registration provisions of the statute shall not, however, affect the rights of third persons. (563)
|
|
Russian full partnerships are legal entities. (564) Legal entities are empowered from the moment of their registration, (565) and shall not be registered unless they comply with the statutory requirements. (566) Thus an unregistered entity (full partnership) does not exist. Deals (contracts) may be entered into by citizens or legal entities. (567) A contract, which is made on behalf of an entity by an unauthorized representative, shall be treated as a contract made by the representative, (568) unless the entity subsequently ratifies it. Since the unregistered full partnership is not able to act as an entity, it could neither have agents (representatives), nor ratify others’ actions. Thus a contract entered into by a partner of a non-registered full partnership is a contract entered into by the individual partner, who would have personal liability for its terms. Only those partners who have signed the contract would be liable. There are provisions in other statutes imposing fines on citizens who perform such acts, however, not on entrepreneurs or commercial entities. There are also provisions that impose fines on non-registered entities. (569) These fines are large enough to discourage non-filing of such entities. (570)
|
|
New York general partnerships are not considered legal entities. (571) If parties operate as a partnership without filing the required papers, it will be considered a misdemeanor, and they shall be prohibited from maintaining a court action or proceeding until a proper certificate has been filed. (572) Failure to comply with the registration provisions of the statute shall not, however, affect the rights of third persons. (573)
|
|
Russian simple partnerships (which have no parallel in New York), like proprietorships, are not entities, but merely written contractual relationships between the partners. (574) They need not be registered, and are formed when the contract is signed or otherwise concluded. (575) Assuming the rules applicable to unauthorized representatives of entities apply to simple partnerships, (even though they are not legal entities), a contract made on behalf of a simple partnership would be treated as a contract made by the parties who entered the contract as individuals. In addition, the Civil Code provides that in the event of the non-writing of a contract which requires a writing (the formation of the simple partnership), the parties may not offer “testimony” regarding the contract in the case of a dispute concerning the contract. (576)
|
|
Russian limited partnerships are legal entities. (577) The rules which apply to unregistered full partnerships also apply to unregistered limited partnerships. New York limited partnerships are required to register with the Secretary of State. (578) If parties operate as a limited partnership without filing the required papers, it will be considered a misdemeanor, and they shall be prohibited from maintaining a court action or proceeding until a proper certificate has been filed. (579) Failure to comply with the registration provisions of the statute shall not, however, affect the rights of third persons. (580)
|
|
In several cases, it appears that there is a difference between theoretical legal requirements and practice. The authors have tried to present a comparison of what is required by theory, and have not tried to identify all the differences in practice. Such an investigation could be the subject of another paper. While there is great similarity between Russian and New York forms, there are also many differences. Therefore, knowledge of the theoretical and/or practical implications in one venue does not necessarily lead to understanding in another. In some cases, the available information, even to an “expert,” may be incomplete or even incorrect. The authors hope that as more contact occurs between Russian and American legal scholars and businesspersons, each will acquire greater understanding of the others’ laws and procedures.
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|
Table 1–Comparison of Russian and N.Y. Proprietorships
|
|
CHARACTERISTIC RUSSIAN NEW YORK
|
|
1. Name a. Must use individual’s a. May use individual’s
|
|
b. May not use assumed b. May use assumed
|
|
2. Number of One. (102) One. (103)
|
|
3. Ease of a. Must be a. None, if using the
|
|
Formation– administratively proprietor’s name. (106)
|
|
Government registered with the b. Filing of a
|
|
Requirements government of the district Certificate of Doing
|
|
of the city where the Business under an Assumed
|
|
proprietor lives. (104) Name (d/b/a) with County
|
|
b. Must also register with Clerk of county of
|
|
the tax office in the business’ location, if
|
|
district where the using such a name. (107)
|
|
4. Ease of None required. None required.
|
|
5. Cost of a. One official minimum a. None, if d/b/a is not
|
|
Formation monthly salary unit. This filed.
|
|
equals 100 rubles or about b. $2.5 for filing
|
|
$3.17. This is the d/b/a. (110)
|
|
its own requirement. (109)
|
|
6. Nature of Limited to natural Includes individuals,
|
|
Participants persons. (111) (112) partnerships,
|
|
–(Other (113) corporations,
|
|
persons, associations. (115)
|
|
7. Contents None. (116) None (But see item 3.b.)
|
|
8. Minimal None. (117) None. (118)
|
|
9. Decision All by the All by the
|
|
making proprietor. (119) proprietor. (120)
|
|
10. Allocation All to the All to the
|
|
of Profits proprietor. (121) Proprietor. (122)
|
|
11. Personal Unlimited (123). Unlimited. (124)
|
|
12. Tax The proprietor of the Results of business are
|
|
reporting business reports results reported by the
|
|
requirements of business on his/her proprietor on his/her
|
|
personal tax return. (125) personal income tax
|
|
13. Income tax Income (loss) from Income (loss) from
|
|
payment business is combined with business is combined with
|
|
requirements proprietor’s other income proprietor’s other income
|
|
and taxed directly to and taxed directly to
|
|
proprietor. (127) proprietor. (128)
|
|
14. Cost of None. (129) None. (130)
|
|
15. Status as Not a legal entity. (131) Not a legal entity. (132)
|
|
16. Who Proprietor. (133) Proprietor. (134)
|
|
17. Where a. Anywhere within the a. A proprietor doing
|
|
business can Russian Federation. (135) business under her/his
|
|
be done b. Multiple locations are own name can do business
|
|
permitted. (136) anywhere in New York
|
|
business under an assumed
|
|
but must be registered in
|
|
18. Withdrawal At the discretion of the At the discretion of the
|
|
of profits proprietor. (139) proprietor. (140)
|
|
TRANSFERABILITY OF INTERESTS
|
|
19. Normal a. Ownership of a. Ownership is not
|
|
transferabi- proprietorship cannot be transferable. (143)
|
|
lity of transferable. (141) b. If a proprietor sells
|
|
interests b. A proprietor may sell his or her “business”
|
|
the assets of his/her (assets), including the
|
|
business to another. If assumed name, to another,
|
|
the new proprietor wishes the new proprietor is
|
|
to “continue” the deemed to have started a
|
|
business, he/she is deemed new business and must
|
|
to have started a new file a new d/b/a. (144)
|
|
business. (142) The former proprietor
|
|
20. Special Not applicable. Not applicable.
|
|
21. Effect of Not applicable. Old Not applicable. Old
|
|
transfer of proprietorship ends. (146) proprietorship ends. (147)
|
|
22. Admission Not applicable. Only 1 Not applicable. Only 1
|
|
of new owners owner possible. (148) owner possible. (149)
|
|
23. Withdrawal a. When a proprietor a. When a proprietor
|
|
of capital “leaves” or ends the “leaves” or ends the
|
|
when leaving business, the business business, the business
|
|
normally will be normally will be
|
|
liquidated, all the debts liquidated, all the debts
|
|
will be paid, and any will be paid, and any
|
|
excess will belong to the excess will belong to the
|
|
proprietor. (150) proprietor. (152)
|
|
b. Proprietor cannot sell b. If a proprietor “sells
|
|
the “business.” (151) This the business”, including
|
|
is the official result, the assumed name, he/she
|
|
although in practice, it receives the negotiated
|
|
appears to be done. selling price. (153)
|
|
24. Normal Life of the proprietor, or Life of the proprietor,
|
|
life span at the will of the or at the will of the
|
|
proprietor. (154) proprietor. (155)
|
|
25. Reorgani- Not applicable. May be combined with
|
|
zations Proprietorships can outer businesses. If so,
|
|
combine into the proprietorship will
|
|
partnerships, but this is cease to exist. (156)
|
|
26. Continuity Not possible. (157) But Not possible. (158) But
|
|
after death see item 23. see item 23.
|
|
Table 2A–Comparison of Russian and N.Y. Partnerships
|
|
CHARACTERISTIC RUSSIAN NEW YORK
|
|
1. Name a. Must contain the name a. Cannot use the
|
|
of all its participants name of someone who
|
|
and the words “full is not a partner. Also
|
|
partnership.” or cannot use the term
|
|
b. Must contain the name “and company” or similar
|
|
of one or more of its term, if there is
|
|
participants and the words (are) no other
|
|
“and company” and the partner(s). (22)
|
|
additional words “full b. May use the name
|
|
partnership.” (230) of another person if it is
|
|
c. May, not use assumed a continuation of a
|
|
names. (231) previously used name,
|
|
2. Number of Two or more. (235) Two or more. (236)
|
|
3. Ease of a. Must be Must file a Certificate
|
|
Formation– administratively of Doing Business under
|
|
Government registered with the an Assumed Name
|
|
Requirements government (237) in the (d/b/a) in the office of
|
|
district where the the County Clerk of
|
|
principal office of the each county where
|
|
business is located. (238) business is
|
|
b. Must also be registered transacted. (240)
|
|
4. Ease of Must be based on a a. No written contract
|
|
Formation– “founding contract” signed or agreement is
|
|
Owners’ by all the partners. (241) required. (242)
|
|
Agreements b. Partnership is a
|
|
5. Cost of a. 10 official minimum Filing of a d/b/a costs
|
|
Formation monthly salary units. This $25. (246)
|
|
about $31.70. This is the
|
|
its own requirement. (245)
|
|
6. Nature of a. Commercial Individuals and/or
|
|
Participants organizations. (247) and/ Partnerships and/or
|
|
(Other forms, or Corporations, and/or
|
|
foreign b. Individual Other associations. (249)
|
|
persons, et.) entrepreneurs
|
|
7. Contents of a. The name of the No founding
|
|
Founding partnership, the location documents are
|
|
Documents of the business, the required
|
|
procedure by which the item 3.
|
|
founders shall participate
|
|
profits and losses, their
|
|
sources for such capital,
|
|
of capital can be changed,
|
|
when and how each partner
|
|
shall contribute his/her/
|
|
its share of the capital,
|
|
inure if contributions are
|
|
8. Minimal a. Must be as required by None. (255)
|
|
Capital the “founding contract.”
|
|
9. Decision a. General agreement of a. Partners have equal
|
|
making all the partners: however, rights to the
|
|
the “founding contract” management and
|
|
may provide for decisions conduct of the
|
|
to be made by majority business. (260)
|
|
vote. (256) b. Decisions are made
|
|
b. Each partner usually by majority vote. (261)
|
|
founding contract may unanimous vote of the
|
|
provide for a different partners to override the
|
|
voting procedure. (257) partnership
|
|
c. Each partner has the agreement. (262)
|
|
right to participate in d. These rules may be
|
|
the management of the changed by the
|
|
partnership. (258) partnership
|
|
d. Each partner is agreement. (263)
|
|
required to participate in
|
|
partnership, according to
|
|
10. Allocation a. Profits must be shared a. Profits and losses
|
|
of Profits and in proportion to the are allocated equally
|
|
Losses partners’ shares in the among the partners. (267)
|
|
contributed capital. (264) b. Thus may be
|
|
b. This may be changed by changed by the
|
|
founding contract or other partnership
|
|
agreement. (265) agreement. (268)
|
|
c. Losses must be c. Profits and losses
|
|
allocated in the same are assumed to lie
|
|
ratios as profits. (266) allocated in the same
|
|
ratios, although this can
|
|
his/her interest, profits
|
|
11. Personal Partners are jointly and a. Partners are jointly
|
|
Liability of severally liable for the and severally liable for
|
|
owners debts of the certain debts. (272)
|
|
partnership. (271) b. Partners are jointly
|
|
liable for other types of
|
|
12. Income Full partnerships must Partnerships must file
|
|
tax reporting file tax returns. (274) tax returns. (275)
|
|
13. Income tax a. Full partnerships pay a. Partnerships do not
|
|
payment income taxes. (276) pay income taxes. (278)
|
|
requirements b. Partners pay taxes b. Profits are allocated
|
|
personally on the to individual partners
|
|
allocated shares of (Schedule K), who
|
|
profits when they are report them on their
|
|
distributed. (277) returns (Schedule E)
|
|
14. Cost of None. (280) None. (281)
|
|
15. Status as Considered a legal Partnership is generally
|
|
a legal entity entity. (282) not a legal entity, (283)
|
|
16. Who Partnership is the Partnership, is the
|
|
employees work employer. (285) employer. (286)
|
|
17. Where In the entire Russian Throughout New York,
|
|
business can Federation. (287) but it must be
|
|
be done registered in each
|
|
18. Withdrawal a. Timing of withdrawals Partners may withdraw
|
|
of profits is by agreement in the profits as mutually
|
|
founding contract. (289) agreed. (291)
|
|
b. Cannot withdraw profits
|
|
if losses have caused the
|
|
value of the net assets to
|
|
TRANSFERABILITY OF INTERESTS
|
|
19. Normal Interests are transferable a. Interests are
|
|
transferabi- only with the consent of transferable only with
|
|
lity of the other partners. (292) the consent of the other
|
|
interests partners. (293)
|
|
20. Special None. (295) None. (296)
|
|
21. Effect on None. (297) The old partnership ends
|
|
form and a new partnership
|
|
22. Admission a. New partners may be a. New partner iliac
|
|
of new owners admitted if all existing be admitted if all
|
|
partners agree. (299) existing partners
|
|
b. This does not affect agree. (301)
|
|
status of old b. Old partnership
|
|
partnership. (300) ceases to exist and a
|
|
23. Withdrawal a. partner who leaves a. A partner who
|
|
of capital shall be paid the fair leaves, except if (s)he
|
|
when leaving market value of is expelled for cause, is
|
|
partnership property entitled to the
|
|
equal to his/her share of liquidating market
|
|
contributed capital. (303) value of her/his
|
|
b. May be changed by share. (305)
|
|
founding contract. (304) b. May be changed by
|
|
24. Normal Unlimited. (307) a. A fixed term, or a
|
|
life span particular objec-
|
|
25. Reorgani- May be converted into any a. Maybe combined
|
|
zations other commercial entity with another
|
|
except a unitary partnership into a new
|
|
enterprise. (311) partnership. (312)
|
|
26. Continuity a. Partnership will a. Death of a partner is
|
|
after death of continue if so provided an act of dissolution.
|
|
owner for in the founding (316)
|
|
contract, or by agreement b. Dissolution usually
|
|
of the remaining leads to the winding up
|
|
partners. (314) of the partnership. (317)
|
|
property equal to his/her
|
|
Table 2B–Attributes of Russian Simple Partnerships
|
|
CHARACTERISTIC RUSSIAN SIMPLE
|
|
1. Name Not an entity, but a contract.
|
|
That’s why simple partnerships
|
|
2. Number of Participants Two or more. (342)
|
|
3. Ease of Formation–Government No registration is required. Must
|
|
Requirements have written agreement. (343)
|
|
4. Ease of Formation–Owners’ Must be based on a joint contract
|
|
Agreements signed by all the partners. (344)
|
|
5. Cost of Formation None.
|
|
6. Nature of Participants–(Other a. Individual entrepreneurs and
|
|
forms, foreign persons, etc.) commercial organizations. (345)
|
|
b. Citizens and legal entities if
|
|
the purpose of the simple
|
|
7. Contents of Founding Documents a. The agreement must state the
|
|
b. It may also deal with a number
|
|
of other areas, for which the
|
|
statute provides default options.
|
|
8. Minimal Capital None required. (348)
|
|
9. Decision making a. Unanimous agreement of all the
|
|
partners. (349) This may be
|
|
changed in the agreement. (350)
|
|
b. Each partner has the right to
|
|
participate in the management of
|
|
the simple partnership. (351)
|
|
10. Allocation of Profits and a. In proportion to the partners’
|
|
Losses shares to the joint
|
|
b. May be changed by the contract
|
|
or some other agreement. (353)
|
|
11. Personal Liability of Owners a. Partners are jointly and
|
|
severally liable for the debts of
|
|
the simple partnership, if the
|
|
contract is connected with a
|
|
commercial activity. (354)
|
|
b. If the contract is not
|
|
connected with a commercial
|
|
activity, partners are liable
|
|
in proportion to their shares in
|
|
the joint business. (355)
|
|
c. If the obligation arises out
|
|
of noncontractual reasons (such
|
|
as negligence), the partners are
|
|
jointly and severally liable for
|
|
12. Income tax reporting a. Each partner must file a tax
|
|
requirements return. (357)
|
|
b. Simple partnerships must file
|
|
13. Income tax payment requirements Simple, partnerships do not pay
|
|
14. Cost of maintenance None.
|
|
15. Status as a legal entity Not considered a legal
|
|
16. Who employees work for Simple partnership is not the
|
|
employer, because it is not an
|
|
entity. Therefore the partners
|
|
17. Where business can be done In the entire Russian Federation
|
|
because the partners could do
|
|
business in the entire Russian
|
|
18. Withdrawal of profits Timing of withdrawals is by
|
|
agreement in the contract. (362)
|
|
TRANSFERABILITY OF INTERESTS
|
|
19. Normal transferability of Interests are not transferable
|
|
interests because simple partnerships are
|
|
based on contractual agreements,
|
|
20. Special agreements None.
|
|
21. Effect on form The old simple partnership ends
|
|
and a new simple partnership
|
|
begins when a new partner is
|
|
admitted. An exception is
|
|
heritage (inherited interests),
|
|
assuming the remaining partners
|
|
agree, either in the original
|
|
agreement, or at the current
|
|
22. Admission of new owners The following may be admitted as
|
|
new partners without the creation
|
|
of a new simple partnership:
|
|
– An entity that is the successor
|
|
to an entity that was a partner,
|
|
and has been reorganized.
|
|
– Persons who are the owners of
|
|
the property of an entity that
|
|
was a partner, after liquidation
|
|
– Those who inherit from an
|
|
existing partner (see item 21
|
|
These may be admitted if all
|
|
existing partners agree either in
|
|
the original agreement or at the
|
|
23. Withdrawal of capital when a. A partner who leaves shall
|
|
leaving have returned to him/her, the
|
|
property that was originally
|
|
contributed to the simple
|
|
b. A partner who leaves shall be
|
|
paid the fair market value of
|
|
simple partnership property equal
|
|
to his/her share of joint
|
|
24. Normal life span Unlimited. (368)
|
|
25. Reorganizations Because it is not an entity, a
|
|
simple partnership cannot be
|
|
reorganized. The partners could,
|
|
however, terminate the simple
|
|
partnership and create a new
|
|
business in some other form.
|
|
26. Continuity after death of owner Simple partnership will continue
|
|
if provided for in the contract,
|
|
or be agreement of the remaining
|
|
Table 3–Comparison of Russian and N.Y. Limited
|
|
CHARACTERISTIC RUSSIAN NEW YORK
|
|
1. Name a. Must contain the a. Must contain the
|
|
names of all general words “limited
|
|
partners and the words partnership” or the
|
|
“limited partnership” or designation “LP”. (456)
|
|
“special partnership” b. Must be
|
|
b. The name of at least other registered limited
|
|
one general partner and partnerships. (457)
|
|
the words “and company” c. Certain words may not
|
|
and the words “limited be used. (458)
|
|
partnership” or “special d. Certain words may not
|
|
partnership”. (454) be used without consent
|
|
c. A named limited of certain government
|
|
partner shall become a agencies. (459)
|
|
general partner. (455) e. Shall be the name
|
|
2. Number of At least one general At least one general
|
|
Participants partner (461) and at least partner (463) and at
|
|
one limited partner. (462) least one limited
|
|
3. Ease of a. Must be registered with a. Must have a
|
|
Formation– the government (465) in Certificate of Limited
|
|
Government the district where the Partnership, filed with
|
|
Requirements office of the business is the Department of State,
|
|
located. (466) naming the Secretary of
|
|
b. Must also be registered State as agent for
|
|
with the tax authorities service of process. (468)
|
|
in every district where b. It may also designate
|
|
the limited partnership is a natural person,
|
|
doing business. (467) domestic corporation, or
|
|
service of process. (469)
|
|
4. Ease of Must be based on a Must be based on a
|
|
Formation– “founding contract” limited partnership
|
|
Owners’ signed by all the general agreement, (472) signed
|
|
Agreements partners. (471) by all of the
|
|
5. Cost of a. Ten official minimum a. Filing fee for
|
|
Formation monthly salary units. This registering the
|
|
equals 1,000 rubles or Certificate of Limited
|
|
about $31.70. This is the Partnership is
|
|
maximum set forth in the $200. (476)
|
|
law. (474) b. Must also incur the
|
|
b. Each district may set costs of
|
|
its own requirement. (475) publication. (477)
|
|
6. Nature of GENERAL GENERAL AND
|
|
Participants– PARTNERS: LIMITED PARTNERS
|
|
(Other forms, a. Individual a. Natural person
|
|
foreign entrepreneurs. and/or (Individuals).
|
|
persons, etc.) b. Commercial b. Partnerships.
|
|
organizations. (478) c. Limited partnership.
|
|
LIMITED PARTNERS: companies.
|
|
a. Any citizen. (479) and/ e. Trusts.
|
|
b. Legal person. (480) g. Custodians.
|
|
7. Contents of a. The name of the Must be based on a
|
|
Founding limited partnership, the Certificate of Limited
|
|
Documents location of the business, Partnership and a limited
|
|
the procedure by which partnership
|
|
the limited partnership agreement. (484)
|
|
purposes of the limited The Certificate of
|
|
partnership, the process Limited Partnership must
|
|
by which the limited contain:
|
|
partnership shall be a. The name of the
|
|
created, the process by limited partnership.
|
|
which property shall be b. The county in which
|
|
transferred to it, the the office of the limited
|
|
process by which the partnership will be
|
|
founders shall participate located.
|
|
in its activities, the c. A designation of the
|
|
terms and procedures for Secretary of State as
|
|
the distribution of pro- agent for service of
|
|
fits and losses, their process and the address
|
|
withdrawal from the where (s)he shall mail
|
|
business, and any other any process (s)he
|
|
information required by receives for the limited
|
|
b. The amount of d. The name and address
|
|
limited partnership of any registered agent
|
|
capital, the sources for and a statement that
|
|
such capital, how each (s)he is also agent for
|
|
general partner’s share of service of process.
|
|
capital can be changed, e. The name and address
|
|
when and how each of all general partners.
|
|
general partner shall f. The date on which
|
|
contribute his/her/its the limited partnership
|
|
share of the capital, what is to dissolve.
|
|
penalties shall inure if g. Any other items that
|
|
contributions are not the general partners
|
|
made as required, and choose to include. (485)
|
|
contributed capital for The contents of the
|
|
the limited limited partnership
|
|
partners. (483) agreement are not
|
|
specified in the statute.
|
|
8. Minimal a. Must be as required a. Must be as required
|
|
Capital by the founding by the partnership
|
|
contract. (487) agreement. (489)
|
|
b. The minimum b. No minimum
|
|
allowable amount is 100 requirements. (490)
|
|
9. Decision a. General partners shall a. General partners shall
|
|
making manage the limited manage the limited
|
|
partnership as they would partnership as they
|
|
a general would a general
|
|
partnership. (491) partnership. (493)
|
|
b. The limited partners b. The limited partners
|
|
may not participate in the may not participate in
|
|
management of the the management of the
|
|
business. (492) business. (494)
|
|
10. Allocation a. General partners have a. Profits and losses are
|
|
of Profits and the right to participate allocated to partners as
|
|
Losses in profits as described in provided for in the
|
|
the founding limited partnership
|
|
contract. (495) agreement. (497)
|
|
b. Limited partners have b. If not defined in the
|
|
the right to participate limited partnership
|
|
in profits as described in agreement, profits and
|
|
the founding losses must be allocated
|
|
contract. (496) according to partners’
|
|
partnership agreement. If
|
|
11. Personal a. The general partners a. The general partners
|
|
Liability of have unlimited liability have unlimited liability
|
|
Owners for the debts of the for the debts of the
|
|
limited partnership. (500) limited
|
|
b. The limited partners partnership. (502)
|
|
have no liability for the b. The limited partners
|
|
debts of the limited have no liability for the
|
|
partnership, beyond the debts of the limited
|
|
investment they originally partnership, beyond the
|
|
made. (501) investment they
|
|
12. Tax Limited partnerships A limited partnership
|
|
reporting must file tax files annual partnership
|
|
requirements returns. (504) income tax returns. (505)
|
|
13. Income tax a. Limited partnerships a. A limited partnership
|
|
payment must pay taxes. (506) pays no taxes. (508)
|
|
requirements b. General and limited b. The income from the
|
|
partners pay taxes limited partnership is
|
|
personally on their share allocated to each partner
|
|
of the profits when they (Schedule K), who
|
|
are distributed. (507) reports them on his/her
|
|
14. Cost of None. (510) None. (511)
|
|
15. Status as Considered a legal Probably an entity. (513)
|
|
a legal entity entity. (512)
|
|
16. Who Limited partnership is the Limited partnership is
|
|
employees work employer. (514) the employer. (515)
|
|
17. Where In the entire Russian In the entire state. A
|
|
business can Federation. (516) limited partnership can
|
|
be done engage in any business
|
|
18. Withdrawal Timing of withdrawals is a. Distributions are
|
|
of profits by founding governed by the limited
|
|
contract. (518) partnership agreement.
|
|
shall be according to the
|
|
TRANSFERABILITY OF INTERESTS
|
|
19. Normal a. General partners’ a. General partners’
|
|
transferabi- interests are transferable interests are
|
|
lity of only with the consent of transferable only with
|
|
interests the other general the consent of all
|
|
partners. (521) general partners. (523)
|
|
b. limited partners have b. limited partners have
|
|
the right to transfer the right to transfer
|
|
interests to other limited their limited partnership
|
|
partners (who have interests to anyone they
|
|
priority) or to new choose if allowed by the
|
|
investors. (522) limited partnership
|
|
20. Special None. (525) An amendment to the
|
|
agreements certificate of limited
|
|
partnership must be filed
|
|
21. Effect on None. (527) None. Must file
|
|
form amendment of certificate
|
|
22. Admission GENERAL GENERAL
|
|
of new owners PARTNERS: PARTNERS:
|
|
New general partners New general partners
|
|
may be admitted if all may be admitted
|
|
existing general partners according to the terms of
|
|
agree. Thus does not the limited partnership
|
|
affect the stains of the agreement, or with the
|
|
old limited written consent of all
|
|
partnership. (529) partners. (531)
|
|
LIMITED PARTNERS: LIMITED PARTNERS:
|
|
Additional limited New limited partners may
|
|
partners may be admitted be admitted according to
|
|
if all general partners the terms of the limited
|
|
agree. (530) partnership agreement, or
|
|
23. Withdrawal GENERAL GENERAL
|
|
of capital PARTNERS: PARTNERS:
|
|
when leaving a. Partner who leaves General partner who
|
|
shall be paid the fair withdraws shall be
|
|
market value of limited entitled to receive the
|
|
partnership property fair value of his/her
|
|
equal to his/her share of interest in the limited
|
|
contributed capital. (533) partnership, unless
|
|
b. May he changed by otherwise specified under
|
|
founding contract. (534) the limited partnership
|
|
LIMITED PARTNERS: agreement. (537)
|
|
a. Partner who leaves LIMITED PARTNERS:
|
|
shall be paid the fair Limited partner who
|
|
market value of limited withdraws shall be
|
|
partnership property entitled to receive the
|
|
equal to his/her share of fair value of his/her
|
|
contributed capital. (535) interest in the limited
|
|
b. May be changed by partnership, unless
|
|
founding contract. (536) otherwise specified under
|
|
24. Normal Perpetual. (539) Limited (540) or
|
|
life span perpetual. (541)
|
|
25. Reorgani- May be converted into a a. May be merged with
|
|
zations full partnership, or consolidated into
|
|
company, or another limited
|
|
cooperative. (542) partnership. (543)
|
|
consolidations with other
|
|
26. Continuity GENERAL GENERAL PARTNERS:
|
|
after death of PARTNERS: On the death of a general
|
|
owner a. Limited partnership partner, the limited
|
|
will continue if so partnership will continue
|
|
provided for in the provided:
|
|
founding contract, or by a. The limited
|
|
agreement of the partnership agreement
|
|
remaining partners. (545) does not prohibit this.
|
|
b. Deceased partner’s b. There is at least one
|
|
estate shall be paid the remaining general
|
|
value of limited partner.
|
|
partnership property c. And (s)he/they is
|
|
equal to his/her share of willing to continue to
|
|
contributed capital. (546) manage the limited
|
|
c. If the last remaining partnership. (550)
|
|
general partner dies, the LIMITED PARTNERS:
|
|
limited partnership must a. The statute contains
|
|
be reorganized or no explicit provisions
|
|
liquidated. (547) relating to the death of
|
|
LIMITED PARTNERS: a limited partner.
|
|
a. If there are two or b. It would be
|
|
more limited partners, appropriate for the
|
|
and one dies, his/her limited partnership
|
|
heirs may elect to agreement to provide for
|
|
continue as limited such event.
|
|
partners, or to receive c. Since limited partners
|
|
payment equal to the fair may not participate in
|
|
market value of the the management of the
|
|
deceased’s shares. (548) business, it would seem
|
|
b. If there is only one reasonable that their
|
|
limited partner left, his interests could be
|
|
or her heirs may elect to inherited and the heirs
|
|
continue as limited become limited partners
|
|
partners, or to force a in their stead.
|
|
liquidation of the limited
|
|
NUMBER of ENTERPRISES in RUSSIA
|
|
Number increase Number increase
|
|
Total quantity 1,946,000 N/A 2,250,000 15.62%
|
|
State entities 325,000 N/A 322,000 -0.92%
|
|
Municipal entities 171,000 N/A 198,000 15.79%
|
|
Civic organizations 53,000 N/A 95,000 79.25%
|
|
Private entities 1,216,000 N/A 1,426,000 17.27%
|
|
Other entities 181,000 N/A 209,000 15.47%
|
|
Added total 1,946,000 N/A 2,250,000 15.62%
|
|
Number increase Number increase
|
|
Total quantity 2,505,000 11.33% 2,727,000 8.86%
|
|
State entities 233,000 -27.64% 143,000 -38.63%
|
|
Municipal entities 184,000 -7.07% 178,000 -3.26%
|
|
Civic organizations 130,000 36.84% 158,000 21.54%
|
|
Private entities 1,731,000 21.39% 2,014,000 16.35%
|
|
Other entities 227,000 8.61% 235,000 3.52%
|
|
Added total 2,505,000 11.33% 2,728,000 8.90%
|
|
Small Enterprises: 841,737 N/A 861,063 2.30%
|
|
Number increase Number increase
|
|
Total quantity 2,901,000 6.38% 3,106,000 7.07%
|
|
State entities 148,000 3.50% 150,000 1.35%
|
|
Municipal entities 183,000 2.81% 198,000 8.20%
|
|
Civic organizations 183,000 15.82% 213,000 16.39%
|
|
Private entities 2,147,000 6.60% 2,312,000 7.69%
|
|
Other entities 240,000 2.13% 234,000 -2.50%
|
|
Added total 2,901,000 6.34% 3,107,000 7.10%
|
|
Small Enterprises: 868,008 0.81% 890,556 2.60%
|
|
Source: Russian Statistic Annual Publication–Official Edition of
|
|
Goskomstat of Russia (Statistic Committee of Russian Federation), 2000,
|
|
(1) The Russian Federation (Russia) is the largest of these “new countries,” covering 6,585,000 square miles and representing a landmass approximately twice the size of the United States (3,535,000 square miles). The population of Russia is 145,000,000, which is a little more than half that of the United States (278,000,000). WORLD ALMANAC AND BOOK OF FACTS 842, 862 (2002).
|
|
(2) RONALD A. ANDERSON ET AL., BUSINESS LAW & THE REGULATORY ENVIRONMENT (12th ed. 1995)
|
|
(3) Adygeya, Altai, Bashkortostan, Buryatia, Dagestan, Ingush, Kabardin-Balkar, Kalmykia-Khalmg Tangch, Karachayevo-Cherkess, Karelia, Komi, Mari-El, Mordovia, Sakha (Yakutia), North Ossetia, Tatarstan, Tuva, Udmurt, Khakasia, Chechen, and Chuvash-Chavash.
|
|
(4) Altai, Krasnodar, Krasnoyarsk, Maritime, Stavropol, and Khabarovsk.
|
|
(5) Amur, Arkhangelsk, Astrakhan, Belgorod, Bryansk, Vladimir, Volgograd, Vologda, Voronezh, Ivanovo, Irkutsk, Kaliningrad, Kaluga, Kamchatka, Kemerovo, Kirov, Kostroma, Kurgan, Kursk, Leningrad, Lipetsk, Magadan, Moscow, Murmansk, Nizhny-Novgorod, Novgorod, Novosibirsk, Omsk, Orenburg, Oryol, Penza, Perm, Pskov, Rostov, Ryazan, Samara, Saratov, Sakhalin, Sverdlovsk, Smolensk, Tambov, Tver, Tomsk, Tyumen, Ulyanovsk, Chelyabinsk, Chita, and Yaroslavl.
|
|
(7) Moscow and St. Petersburg.
|
|
(8) Jewish Autonomous Region.
|
|
(9) Aginsky Buryat, Komi-Permyak, Koryak, Nenets, Taimyr (Dolgan-Nenets), Ust-Ordynsky Buryat, Khanty-Mansi, Chukchi, Evenk, and Yamal-Nenets.
|
|
(10) The United States consists of fifty sovereign states. States are divided into counties (in Louisiana they are called parishes). Counties usually include cities, towns and villages. In the case of New York City, the single city consists of five counties (or, as they are also known, boroughs): New York (also known as Manhattan), the Bronx, Kings (also known as Brooklyn), Queens, and Richmond (also known as Staten Island). Under U.S. law, the primary lawmaker is the state, and the federal government may only regulate in areas where the Constitution has authorized it. Each state has its own rules regarding business and business organizations. While there are generally many similarities, there may be differences as well. There is also a body of federal law, but, except for the area of taxation, federal law generally does not deal with the topic of this paper. Counties, cities, towns and villages may also make laws, but not usually ones related to the subject of this paper.
|
|
(11) Kodeks RF “Ob administrativnih pravonarasheniyah”, chast 2 [Code on Administrative Misdemeanors, pt. two], Sobr. Zakond. RF (Dec. 30,2001), No. 1, pt. 1, art. 1 [hereinafter Administrative Misdemeanors].
|
|
(12) Federalnii Zakon RF “O minimalnom razmere oplati truda” [Statute on Minimum Monthly Salary Units], Sobr. Zakond. RF (June 19, 2000), No. 26, art. 2729
|
|
(13) Zakon RF “O minimalnom razmere oplati truda” [Statute on Minimum Monthly Salary Units], art. 5, Sobr. Zakonod. RF (June 19, 2000), No. 26, art. 2729 [hereinafter Minimum Salary Units].
|
|
(14) Konstitutsiia RF [Russian Constitution] (1993), art. 15.1 [hereinafter KONST. RF].
|
|
(15) KONST. RF, art. 15.1 (1993).
|
|
(17) Id. art. 76.1 (1993).
|
|
(18) Id. art. 76.3 (1993).
|
|
(19) Grazhdanskii Kodeks RF [Civil Code of the Russian Federation], ch. 1, art. 2.1 [hereinafter GK RF].
|
|
(20) GK RF, ch. 1, art. 3.2.
|
|
(22) KONST. RF, art. 90.1 (1993).
|
|
(23) See generally S. S. ALEKSEEV, THE THEORY OF STATE AND LAW 113 (1994) (discussing the levels of authority in Russian law).
|
|
(24) Federalnii Constitucionnii Zakon “O pravitelstve Rossiskoi Federacii”, art. 4 [Constitutional Statute on Government of Russian Federation], Sobr. Zakond. RF (Dec. 22, 1997), No. 51, art. 5712
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|
(25) S. S. ALEKSEEV, THE THEORY OF STATE AND LAW 85 (1994).
|
|
(26) KONST. RF, art. 73 (1993).
|
|
(29) Postanovlenie Verhovnogo Soveta RF “O ratifikacii soglasheniya o sozdanii sodruzestva nezavisimih gosudarstv,” art. 2 [On Ratification of the Agreement about Creation of Commonwealth of Independent States], Vedomosti Soveta Narodnih Deputatov I Verhovnogo Soveta RF (Dec. 19, 1991), No. 51, art. 1798 [hereinafter Creation of CIS].
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|
(30) GK RF, ch. 3, art. 49.1.
|
|
(33) ROBERT L. OSTERTAG & HON. JAMES D. BENSON, 1 GENERAL PRACTICE IN NEW YORK [section] 1.13 (1998).
|
|
(34) This follows from art. 61 of the Russian Civil Code.
|
|
(35) Grazdanskoe prave, Chast 1, (Civil Law, Part 1), (T. I. Illarionova et. al., eds., 1998).
|
|
(36) For a good general discussion of entity and aggregate theory, see 1 ALAN R. BROMBERG & LARRY E. RIBSTEIN, BROMBERG & RIBSTEIN (IN PARTNERSHIP [section] 103 (2002).
|
|
(37) William D. Harrington, Business Associations, 42 SYRACUSE L. REV. 299 (1991).
|
|
(38) Arthur Norman Field et al., New York and Delaware Business Entities: Choice, Formation. Operation. Financing and Acquisition. 17 WEST’S NEW YORK PRACTICE SERIES [section] 2.3(A)(1)(1997).
|
|
(39) Ruzicka v. Rager, 111 N.E.2d 878 (N.Y. 1953).
|
|
(40) UNIF. P’SHIP ACT [section] 201 (1997), Vol. 6, pt.1 U.L.A. 91 (West 2001).
|
|
(41) Exec. House Realty v. Hagen, 438 N.Y.S.2d 174 (Sup. Ct. 1981).
|
|
(42) K. POBEDONOSCEV, III THE COURSE OF CIVIL LAW 520 (1880)
|
|
(44) GK RF, ch. 4 deals with full partnerships (entity)
|
|
(45) See, e.g., Y. FUNK ET AL., SHARE-STOCK COMPANY: HISTORY AND THEORY (DIALECTIC OF FREEDOM (1999).
|
|
(47) For a discussion of the history of partnerships, see generally JUDSON ADAMS CRANE & ALAN R. BROMBERG, CRANE & BROMBERG ON PARTNERSHIP [subsection] 1-2 (1968)
|
|
(48) ALFRED E. EICHNER & DAVID R. B. Ross, Competition, in II ENCYCLOPEDIA OF AMERICAN ECONOMIC HISTORY 661 (1980).
|
|
(51) For a history of limited partnership, see generally Lucille Tyroler Freedberg, The Shield of the Limited Partnership, 28 N.Y.L. SCH. L. REV. 561 (1983).
|
|
(52) Nalogovyi Kodeks RF, chast 1 [Taxation Code, pt. one], art. 13, Sobr. Zakonod. RF (July 12, 1999), No. 28, art. 3487 (last rev. Aug. 7, 2000, No. 32, Art. 3341) [hereinafter Tax Code RF, pt. one]
|
|
(53) Tax Code RF, pt. one, art. 13.
|
|
(54) Until January 1, 2002, the Russian law imposed only maximum rates of taxation (11% federal, 19% subject, and 5% local (35% total maximum)). In 2001, the law was changed, reducing taxes generally but requiring a minimum tax at the subject level (effective January 1, 2002).
|
|
(55) Tax Code RF, pt. two, art. 284.1.
|
|
(56) Tax Code RF, pt. one, art. 13
|
|
(57) Tax Code RF, pt. two, arts. 284.3, 284.6.
|
|
(58) Tax Code RF, pt. one, art. 13
|
|
(59) See generally Tax Code RF, pt. two, art. 286 (providing that only organizations are subject to this tax).
|
|
(60) Tax Code RF, pt. one, art. 13
|
|
(61) Tax Code RF, pt. two, arts. 278.4, 284.1.
|
|
(62) For example, New York has 62 cities. See NELSON A. ROCKEFELLER INSTITUTE OF GOV’T, 2001 NEW YORK STATES STATISTICAL YEARBOOK [section] F (Local Government Finances and Employment), tbl. F-1 (26th ed. 2001). Only two of these (New York and Yonkers) impose city income taxes. See 3 STATE AND LOCAL TAXES, NEW YORK [paragraphs] 68000-70091 (R.I.A. 1995).
|
|
(63) 26 U.S.C. [section] 1 (2000).
|
|
(64) N.Y. TAX LAW [section] 601(a)(1) (Consol. 1990 & Supp. Feb. 2001).
|
|
(65) 26 U.S.C. [section] 701 (2000).
|
|
(66) Tax Code RF, pt. two, art. 246.
|
|
(67) 26 U.S.C. [section] 6031 (2000).
|
|
(68) Id. [section] 702(a) (2000).
|
|
(69) Id. [section] 11(b) (2000).
|
|
(70) N.Y. TAX LAW [section] 210(1)(a) (Consol. 1990 & Supp. Feb. 2001).
|
|
(71) Id. [section] 210(1)(d) (Consol. 1990 & Supp. Feb. 2001). In the case of certain larger corporations, the minimum is higher, with a maximum of $1,500.00.
|
|
(72) U.S. BUREAU OF THE CENSUS, STATISTICAL ABSTRACTS OF THE UNITED STATES [section] 17 (Business Enterprises), tbl. 828 (116th ed. 1996).
|
|
(73) GK RF, ch. 3, art. 23.1.
|
|
(74) Id. arts. 23.1, 23.3.
|
|
(77) Zakon RF “O registracionnom sbore s phisicheskih lic, zanimayuschihsya predprinimatelskoi deyatelnostyu” [Statute on Registrative Fee of Proprietorship and the Order of Registration], art. 3.1, Vedomosti Soveta Narodnih Deputatov I Verhovnogo Soveta RF (Feb. 10, 1992), No. 8, art. 360 [hereinafter Registrative Fee of Proprietorship].
|
|
(78) See generally N.Y. GEN. BUS. LAW [subsection] 130-42 (Consol. 1980 & Supp. Feb. 2001).
|
|
(79) Id. [section] 130.1 (Consol. 1980).
|
|
(80) Id. [subsection] 130.1(a), 130.1(b) (Consol. 1980).
|
|
(81) Minimum Salary Units, art. 1.
|
|
(82) Data published by the Krasnoyarsk territory indicate that the average monthly income for the period from January through November, 2000, was slightly over 3,000 rubles. Assuming that the figures for Krasnoyarsk are not as high as Moscow or St. Petersburg, but higher than many other areas in Russia, the figure used seems a reasonable average.
|
|
(83) N.Y. GEN. BUS. LAW [section] 130.5(a) (Consol. 1980)
|
|
(84) U.S. BUREAU OF THE CENSUS, STATISTICAL ABSTRACTS OF THE UNITED STATES [section] 14 (Income, Expenditures and Wealth), tbl. 692 (116th ed. 1996).
|
|
(85) NELSON A. ROCKEFELLER INSTITUTE OF GOV’T, 2000 NEW YORK STATE STATISTICAL YEARBOOK [section] C (Employment and Personal Income), tbl. C-9 (25th ed. 2000).
|
|
(86) Ukaz Prezidenta RF “Ob uporyadochenii gosudarstvennoi regisreacii predprinimatelskoi deyatelnosti v Rossyiskoi Federacii” [Decree of the President: On the Order of State Registration of Entities and Proprietorships in the Russian Federation], Sobr. Zakonod. RF (July 11, 1994), No. 11, art. 1194 [hereinafter Decree on Registration of Entities]. The statute lists the required documents, and does not mention a founding contract. See also GK RF, ch. 3, art. 23 (requiring no formal documents for forming a proprietorship)
|
|
(87) See generally Decree on Registration of Entities (listing the requirements for formation of a proprietorship, without mentioning minimum capital). See also GK RF, ch. 3, art. 23 (mentioning no minimum capital requirements).
|
|
(88) Tax Code RF, pt. two, arts. No. 227.5, 227.1
|
|
(89) GK RF, ch. 3, art. 24
|
|
(90) Tax Code RF, pt. two, art. No. 226
|
|
(91) There are no limitations in any of the statutes.
|
|
(92) N.Y. GEN. BUS. LAW [section] 130. 1(i) (Consol. 1980).
|
|
(93) Id. [subsection] 130.1(i), 130.1(a) (Consol. 1980).
|
|
(94) New York statutes regarding proprietorships refer to any proprietor, and make no separate mention of foreign proprietors.
|
|
(95) GK RF, ch. 3, art. 23
|
|
(96) GK RF, CH. 3, arts. 23, 17.2
|
|
(97) There is no legislation directly discussing such requirements. This reflects current practice and is inherent in the nature of Russian proprietorship
|
|
(98) GK RF, ch. 3, art. 19.1.
|
|
(99) This conclusion follows from the language in the Civil Code. GK RF, ch. 3, art. 19.1.
|
|
(100) N.Y. GEN. BUS. LAW [section] 130. 1(i) (Consol. 1980).
|
|
(101) Id. [subsection] 130.1(i), 130.1(a)(Consol. 1980).
|
|
(102) GK RF, ch. 3, art. 23.1.
|
|
(103) WEST’S BUSINESS LAW 667 (7th ed. 1998).
|
|
(104) Registrative Fee of Proprietorship, art. 3.1.
|
|
(105) Tax Code RF, pt. one, art. 83.
|
|
(106) N.Y. GEN. BUS. LAW [section] 130.1 (Consol. 1980).
|
|
(107) Id. [section] 130.1(a) (Consol. 1980).
|
|
(108) Minimum Salary Units, art. 1.
|
|
(109) Registrative Fee of Proprietorship, art. 2.
|
|
(110) N.Y. GEN. BUS. LAW [section] 130.5(a) (Consol. 1980)
|
|
(111) GK RF, ch. 3, art. 23.l.
|
|
(112) N.Y. GEN. BUS. LAW [section] 130.1(a) (Consol. 1980).
|
|
(114) Id. [section] 130.1(b) (Consol. 1980).
|
|
(115) Id. [section] 130.1(a)(Consol. 1980).
|
|
(116) Decree on Registration of Entities. The statute lists the required documents, and does not mention a founding contract. See also GK RF, ch. 3, art. 23 (requiring no formal documents for forming a proprietorship).
|
|
(117) See generally Decree on Registration of Entities (listing the requirements for formation of a proprietorship, without mentioning minimum capital)
|
|
(118) The authors found no discussion of minimal capital requirements in any of the statutes or secondary sources examined.
|
|
(119) GK RF, ch. 3, art. 18.
|
|
(120) JANE P. MALLOR ET AL., BUSINESS LAW & THE REGULATORY ENVIRONMENT 785 (11th ed. 2001).
|
|
(121) GK RF, ch. 3, art. 18.
|
|
(122) JANE P. MALLOR ET AL., BUSINESS LAW & THE REGULATORY ENVIRONMENT 785 (11th ed. 2001).
|
|
(123) GK RF, ch. 3, art. 24.
|
|
(124) JANE P. MALLOR ET AL., BUSINESS LAW & THE REGULATORY ENVIRONMENT 785 (11th ed. 2001).
|
|
(125) Tax Code RF, pt. two, arts. No. 227.5, 227.1.
|
|
(126) JANE P. MALLOR ET AL., BUSINESS LAW & THE REGULATORY ENVIRONMENT 785 (11th ed. 2001).
|
|
(127) Tax Code RF, pt. two, arts. No. 227.1, 225.
|
|
(128) JANE P. MALLOR ET AL., BUSINESS LAW & THE REGULATORY ENVIRONMENT 785 (11th ed. 2001).
|
|
(129) There is no legislation regarding this matter, and currently, no such payments are required.
|
|
(130) The authors found no discussion of this issue in any of the statutes or secondary sources examined. Based on the authors’ practical experience, no such fees are required.
|
|
(131) GK RF, ch. 3, art. 23.1.
|
|
(132) JANE P. MALLOR ET AL., BUSINESS LAW & THE REGULATORY ENVIRONMENT 785 (11th ed. 2001).
|
|
(133) Tax Code RF, pt. two, art. No. 226.
|
|
(134) WEST’S BUSINESS LAW 667 (7th ed. 1998).
|
|
(135) There are no limitations in any statutes.
|
|
(136) There is no limitation anywhere in the statutes.
|
|
(137) N.Y. GEN. BUS. LAW [subsection] 130.1 (i), 130.1 (a) (Consol. 1980).
|
|
(138) Id. [section] 130.1 (Consol. 1980).
|
|
(139) There is no legislation directly discussing such requirements. This reflects current practice and is inherent in the nature of Russian proprietorship.
|
|
(140) This follows from the fact that the identity of the proprietor and the business is considered to be the same. See I N. Y. PRACTICE GUIDE [section] 2.03[1] (BENDER 2001).
|
|
(141) There is no legislation directly discussing such requirements. This reflects current practice and is inherent in the nature of Russian proprietorship.
|
|
(142) There is no legislation directly discussing such requirements. This reflects current practice and is inherent in the nature of Russian proprietorship.
|
|
(143) N.Y. GEN. BUS. LAW [subsection] 130.1, 130.2, 130.3 (Consol. 1980).
|
|
(144) See generally id. [section] 130.3 (Consol. 1980) (requiring filing a new d/b/a for successors).
|
|
(145) Id. [section] 130.10 (Consol. 1980).
|
|
(146) GK RF, ch. 3, arts. 23, 17.2.
|
|
(147) JANE P. MALLOR ET AL., BUSINESS LAW & THE REGULATORY ENVIRONMENT 785 (11th ed. 2001)
|
|
(148) GK RF, ch. 3, art. 23.
|
|
(149) JANE P. MALLOR ET AL., BUSINESS LAW & THE REGULATORY ENVIRONMENT 785 (11th ed. 2001).
|
|
(150) GK RF, ch. 3, arts. 23.1, 23.3.
|
|
(151) Id. ch. 6, art. 132, & ch. 30.
|
|
(152) This follows from the fact that the identity of the proprietor and the business is considered to be the same. See I N. Y. PRACTICE GUIDE [section] 2.03[1] (BENDER 2001).
|
|
(153) This follows from the fact that the identity of the proprietor and the business is considered to be the same. See I N. Y. PRACTICE GUIDE [section] 2.03 [1] (BENDER 2001).
|
|
(154) GK RF, ch. 3, arts. 23, 17.2.
|
|
(155) ANGELA SCHNEEMAN, THE LAW OF CORPORATIONS, PARTNERSHIPS, AND SOLE PROPRIETORSHIPS, Ch. 1 [section] 1.4(b) (1993).
|
|
(156) JANE P. MALLOR ET AL., BUSINESS LAW & THE REGULATORY ENVIRONMENT 785 (11th ed. 2001).
|
|
(157) GK RF, ch. 3, arts. 23, 17.2.
|
|
(158) WEST’S BUSINESS LAW 667 (7th ed. 1998).
|
|
(159) See generally N.Y. PARTNERSHIP LAW (Consol. 1977).
|
|
(160) See generally GK RF, ch. 3 (dealing with full partnerships and using that term)
|
|
(161) N.Y. PARTNERSHIP LAW [section] 10.1 (Consol. 1977).
|
|
(162) GK RF, ch. 4, art. 66.1.
|
|
(165) N.Y. PARTNERSHIP LAW [section] 82 (Consol. 1977).
|
|
(166) N.Y. GEN. BUS. LAW [section] 130.1(ii) (Consol. 1980).
|
|
(167) GK RF, ch. 3, art. 18:1.
|
|
(168) See general id. ch. 4, art. 81 (providing that when a full partnership has only one remaining participant, it should be liquidated or converted into a “business company”)
|
|
(169) GK RF, ch. 4, art. 66.4.
|
|
(170) Id. ch. 3, art. 23.
|
|
(171) Id. ch. 4, arts. 82.3, 69.2.
|
|
(172) See 2 ARTHUR NORMAN FIELD ET AL., TRANSACTIONAL, LAWYER’S DESKBOOK: ADVISING BUSINESS ENTITIES [section] 16.3(b)(10)(2001) (discussing the fiduciary duties of partners). The law is clear that partners’ fiduciary duties prevent them from self-dealing, competing with the partnership, or appropriating partnership opportunities. There is no mention (or even suggestion) that partners may not act as such in unrelated or non-competitive ways.
|
|
(173) N.Y. GEN. BUS. LAW [section] 130.1(a) (Consol. 1980).
|
|
(174) Id. [section] 130.5(a) (Consol. 1980)
|
|
(175) Zakon RF “O predpriyatiyah I predprimatelskoi deyatelnosti v Rossyiskoi Federacii” [Statute on Entities and Business Activity], art. 34.1, Vedomosti Soveta narodnih deputatov I Verhovnogo Soveta RSFSR (Dec. 27, 1990), No. 11, art. 1194 (last rev. Dec. 5, 1994, No. 32, art. 3302) [hereinafter Business Activity]. Thus, if A lives in Lenin District, and B lives in Kirov District
|
|
(176) Postanovlenie Soveta Ministrov RF “O poryadke vzimaniya gosudarstvennoi poshlini za registraciyu predpriyatyi v RSFSR” [Decree of Soviet Ministry RF, About the Order of Receiving of State Payment for Registration Of Entities in the RF], art. 3, Law Program “Consultant+” (June 14, 1991) [hereinafter State Payment]
|
|
(177) State Payment, art. 3. The current amount set for Krasnoyarsk territory is ten official minimum monthly salary units.
|
|
(178) Tax Code RF, pt. one, art. 83.
|
|
(179) Decree on Registration of Entities, art. 1
|
|
(180) N.Y. GEN. BUS. LAW [section] 130.1(a) (Consol. 1980).
|
|
(182) New York statutes regarding partnerships refer to any partnership, and make no separate mention of foreign partnerships.
|
|
(183) Rella v. McMahon, 564 N.Y.S.2d 409 (App. Div. 1991)
|
|
(184) Martin v. Peyton, 158 N.E. 77 (N.Y. 1927).
|
|
(185) N.Y. PARTNERSHIP LAW [section] 27.1 (Consol. 1977).
|
|
(186) GK RF, ch. 4, art. 70.1.
|
|
(187) Id. ch. 3, art. 52.2.
|
|
(189) Rella v. McMahon, 564 N.Y.S.2d 409 (App. Div. 1991)
|
|
(190) PETER C. KONSTANT, BUSINESS ORGANIZATIONS: PRACTICAL APPLICATIONS OF THE LAW 26 et seq. (1996).
|
|
(191) Decree on Registration of Entities, art. 3.c.
|
|
(192) Kyle v. Ford, 584 N.Y.S.2d 698 (App. Div. 1992).
|
|
(193) GK RF, ch. 4, art. 71.1
|
|
(194) GK RF, ch. 4, arts. 67.1, 73.1
|
|
(195) GK RF, ch. 4, arts. 71.1, 71.2, 73.1
|
|
(196) GK RF, ch. 4, art. 74.1.
|
|
(197) N.Y. PARTNERSHIP LAW [section] 40.1 (Consol. 1977).
|
|
(198) GK RF, ch. 4, art. 74.1
|
|
(199) GK RF, ch. 4, art. 74.1.
|
|
(200) There appears to be nothing in the statutes prohibiting different allocations of profits and losses. The Internal Revenue Code (26 U.S.C. [section] 704 (2000)) says the determination of profit and loss sharing shall be determined under the partnership agreement, unless contrary to “this chapter”. There appears tn be no prohibition in the tax code either. The only requirement seems to be that the arrangement have “substantial economic effect.”
|
|
(201) GK RF, ch. 4, art. 75.1
|
|
(202) Tax Code RF, pt. two, art. 246
|
|
(203) Tax Code RF, pt. two, art. 246.
|
|
(204) 26 U.S.C. [section] 701 (2000).
|
|
(205) Guaranty Trust Co. v. Commissioner, 303 U.S. 493 (1938).
|
|
(206) 26 U.S.C. [section] 706(a) (2000).
|
|
(207) Tax Code RF, pt. two, art. 246.
|
|
(208) See generally, id. pt. one, art. 285.
|
|
(209) GK RF, ch.3, art. 50.2.
|
|
(210) Ruzicka v. Rager, 111 N.E.2d 878 (N.Y. 1953)
|
|
(211) N.Y. PARTNERSHIP LAW [section] 9 12.3 (Consol. 1977).
|
|
(212) N.Y. C.P.L.R. 1025 (Consol. 1978).
|
|
(213) There is no legislation regarding this matter, and currently no such payments are required.
|
|
(214) Tax Code RF, pt. one, arts. 80.2, 83.1. Based on these provisions, one can conclude that business may be done anywhere within the Russian Federation.
|
|
(215) Business Activity, art. 34.1.
|
|
(216) Tax Code RF, pt. one, art. 83.
|
|
(217) N.Y. GEN. BUS. LAW 9 130.1(a) (Consol. 1980).
|
|
(218) GK RF, ch. 4, arts. 78.3, 79.
|
|
(219) N.Y. PARTNERSHIP LAW [subsection] 99 45.1, 62.1(a) (Consol. 1977).
|
|
(222) Id. [section] 62.4 (Consol. 1977).
|
|
(223) GK RF, ch. 4, art. 79
|
|
(224) See GK RF, ch.4, arts. 75, 76, 78.
|
|
(225) 26 U.S.C. [section] 706(c)(2000).
|
|
(226) GK RF, ch. 4, art. 78.1. While the Russian Civil Code does not specify that the value to be paid is the fair market value, it is practice to do so.
|
|
(227) GK RF, ch. 4, art. 78.1.
|
|
(228) N.Y. PARTNERSHIP LAW [section] 69.1 (Consol. 1977).
|
|
(229) Id. [section] 40 (Consol. 1977).
|
|
(230) GK RF, ch. 4, art. 69.3.
|
|
(231) Id. ch. 3, art. 19.1.
|
|
(232) N.Y. PARTNERSHIPS LAW [section] 82 (Consol. 1977).
|
|
(233) Id. [section] 80 (Consol. 1977).
|
|
(234) N.Y. GEN. BUS. LAW [section] 130.1(ii) (Consol. 1980).
|
|
(235) See generally GK RF, ch. 4, art. 81 (providing that when a Full Partnership has only one remaining participant, it should be liquidated or converted into a “business company”).
|
|
(236) N.Y. PARTNERSHIP LAW [section] 10.1 (Consol. 1977).
|
|
(237) Business Activity art. 34.1.
|
|
(238) Thus, if A lives in Lenin District, and B lives in Kirov District, and the office of the business is to be located in Central District, administrative registration must be in Central District. Business Activity, art. 34.1.
|
|
(239) Tax Code RF, pt. one, art. 83.
|
|
(240) N.Y. GEN. BUS. LAW [section] 130.1(a) (Consol. 1980).
|
|
(241) GK RF, ch. 4, art. 70.1
|
|
(242) Rella v. McMahon, 564 N.Y.S.2d 409 (App. Div. 1991).
|
|
(243) Smith v. Maine, 260 N.Y.S. 409 (Sup. Ct. 1932).
|
|
(244) State Payment, art. 3
|
|
(245) State Payment, art. 3. The current amount set for Krasnoyarsk territory is 10 official minimum monthly salary units.
|
|
(246) N.Y. GEN. BUS. LAW [section] 130.5(a) (Consol. 1980)
|
|
(247) GK RF, ch. 4, art. 66.4.
|
|
(249) N.Y. PARTNERSHIP LAW [subsection] 10, 2 (Consol. 1977).
|
|
(250) GK RF, ch. 3, art. 52.2.
|
|
(251) Id. ch. 4, art. 70.2.
|
|
(253) Decree on Registration of Entities, art. 3.c.
|
|
(254) GK RF, ch. 4, art. 73.2.
|
|
(255) 2 ARTHUR NORMAN FIELD ET AL., TRANSACTIONAL LAWYER’S DESKBOOK: ADVISING BUSINESS ENTITIES [section] 16.3(b)(5)(2001).
|
|
(256) GK RF, ch. 4, art. 71.1.
|
|
(260) N.Y. PARTNERSHIP LAW [section] 40.5 (Consol. 1977).
|
|
(261) Id. [section] 40.8 (Consol. 1977).
|
|
(263) Id. [section] 40 (Consol. 1977).
|
|
(264) GK RF, ch. 4, art. 74.1.
|
|
(267) N.Y. PARTNERSHIP LAW [section] 40.1 (Consol. 1977).
|
|
(268) Id. [section] 40 (Consol. 1977).
|
|
(269) There appears to be nothing in the statutes prohibiting different allocations of profits and losses. The Internal Revenue Code (26 U.S.C. [section] 704 (2000)) says the determination of profit and loss sharing shall be determined under the partnership agreement, unless contrary to “this chapter”. There appears to be no prohibition in the tax code either. The only requirement seems to be that the arrangement have “substantial economic effect.”
|
|
(270) 26 U.S.C. [section] 706(d)(2) (2000).
|
|
(271) GK RF, ch. 4, art. 75.1.
|
|
(272) N.Y. PARTNERSHIP LAW [section] 24, 25, 26 (Consol. 1977 & Supp. Feb. 2001).
|
|
(274) Tax Code RF, pt. two, art. 246.
|
|
(275) 26 U.S.C. [section] 6031 (2000).
|
|
(276) Tax Code RF, pt. two, art. 246.
|
|
(278) 26 U.S.C. [section] 701 (2000).
|
|
(279) Id. [section] 702(a) (2000).
|
|
(280) There is no legislation regarding this matter, and currently no such payments are required.
|
|
(281) There is no legislation regarding this matter, and currently no such payments are required.
|
|
(282) GK RF, ch. 3, art. 50.2.
|
|
(283) Ruzicka v. Rager, 111 N.E.2d 878 (N.Y. 1953).
|
|
(284) N.Y. PARTNERSHIP LAW [subsection] 12, 3 (Consol. 1977)
|
|
(285) Tax Code RF, pt. two, art. 226.1.
|
|
(286) See generally N.Y. PARTNERSHIP LAW [section] 71-a (Consol. 1977) (providing that after appointment of a receiver, the wages of employees are preferred to any other claims). This implies that the partnership is the employer. Also, in practice, the authors have always found that the partnership is the employer, rather than the individual partners.
|
|
(287) Tax Code RF, pt. one, arts. 80.2, 83.1. Based on these provisions one can conclude that business may be done anywhere within the Russian Federation.
|
|
(288) N.Y. GEN. BUS. LAW [section] 130.1(a) (Consol. 1980).
|
|
(289) GK RF, ch. 3, art. 52.2.
|
|
(290) Id. ch. 4, art. 74.2.
|
|
(291) Lanier v. Bowdoin, 24 N.E.2d 732 (N.Y. 1939).
|
|
(292) GK RF, ch. 4, arts. 78.2, 79.
|
|
(293) N.Y. PARTNERSHIP LAW [section] 40.7 (Consol. 1977).
|
|
(294) Id. [section] 53 (Consol. 1977).
|
|
(295) There is no legislation establishing such requirements. This reflects current practice.
|
|
(296) There is no legislation establishing such requirements. This reflects current practice.
|
|
(297) See GK RF, ch. 4, arts. 75, 76, 78.
|
|
(298) 26 U.S.C. [section] 706(c) (2000).
|
|
(299) GK RF, ch. 4, art. 79.
|
|
(301) N.Y. PARTNERSHIP LAW [section] 40.7 (Consol. 1977).
|
|
(302) 26 U.S.C. [section] 706 (c) (2000)
|
|
(303) GK RF, ch. 4, art. 78.1. While the Russian Civil Code does not specify that the value to be paid is the fair market value, it is practice tn do so.
|
|
(304) GK RF, ch. 4, art. 78.1.
|
|
(305) N.Y. PARTNERSHIP LAW [section] 69.1 (Consol. 1977).
|
|
(306) Id. [section] 40 (Consol. 1977).
|
|
(307) GK RF, ch. 4, arts. 78.3, 79.
|
|
(308) N.Y. PARTNERSHIP LAW [sub section] 45.1, 62.1(a) (Consol. 1977).
|
|
(310) Id. [section] 62.4 (Consol. 1977).
|
|
(311), GK RF, ch. 4, art. 68.1.
|
|
(312) See 26 U.S.C. [section] 708(b)(2)(A) (2000) (discussing the effects of a merger or consolidation of two partnerships).
|
|
(313) 2 ALAN R. BROMBERG & LARRY E. RIBSTEIN, BROMBERG & RIBSTEIN ON PARTNERSHIP [section] 7.21 (2002).
|
|
(314) GK RF, ch. 4, art. 76.1.
|
|
(315) Id. art. 78.1. While the Russian Civil Code does not specify that the value to be paid is the fair market value, it is practice to do so.
|
|
(316) N.Y. PARTNERSHIP LAW [section] 62.4 (Consol. 1977).
|
|
(317) Id. [section] 61 (Consol. 1977).
|
|
(318) GK RF, ch. 55, art. 1041.
|
|
(321) Because a simple partnership is not an entity, there is no means of transferring an ownership interest, as there would be in the case of an entity. Furthermore, because the simple partnership is created by contractual agreement, the only way to transfer an interest would be by assignment. In such a case, the assignor, who had transferred his or her rights, would still be liable for his or her obligations (duties). In practice therefore, this would be a highly inadvisable situation. Should the assignee also get a release of his or her obligations from other partners and third parties, this would be essentially the equivalent of entering into a new contract, forming a new simple partnership. (An exception to this scenario occurs in the case of inheritance. See GK RF, ch. 55, art. 1050.)
|
|
(322) GK RF, ch. 55, art. 1050.1.
|
|
(325) Id. ch. 9, art. 161.
|
|
(326), See generally id. ch. 55, arts. 1042, 1043.
|
|
(330) Id. arts. 1046, 1048.
|
|
(331) Chapter 55 of the Russian Civil Code does not regulate such problem.
|
|
(332) Tax Code RF, pt. one, arts. 80.2 and 83.1. Based on these provisions one can conclude that business may be done anywhere within the Russian Federation.
|
|
(333) GK RF, ch. 55, arts. 1047.2, 1047.1.
|
|
(336) Tax Code RF, pt. one, art. 19. This article, which defines “entities” subject to tax, does not include the simple partnership.
|
|
(337) Tax Code RF, pt. two, art. 247.
|
|
(340) GK RF, ch. 55, art. 1050.2.
|
|
(343) Id. ch. 9, art. 161.
|
|
(344) Id. ch. 55, art. 1041.1.
|
|
(348) Id. arts. 1042, 1043.
|
|
(352) Id. arts. 1046, 1048.
|
|
(357) Tax Code RF, pt. one, art. 19. This article, which defines “entities” subject to tax, does not include the simple partnership.
|
|
(358) GK RF, ch. 55, art. 1043.2.
|
|
(359) Tax Code RF, pt. one, art. 19. This article states that only “entities” are subject to tax. The Civil Code, at ch. 55 and ch. 3, art. 50, makes it clear that simple partnerships are not entitles.
|
|
(360) GK RF, ch. 55, art. 1041.
|
|
(361) Tax Code RF, pt. one, arts. 80.2 and 83.1. Based on these provisions one can conclude that business may be done anywhere within the Russian Federation.
|
|
(362) Chapter 55 of the Russian Civil Code does not regulate such problem.
|
|
(363) Because a simple partnership is not an entity, there is no means of transferring an ownership interest, as there would be in the case of an entity. Furthermore, since the simple partnership is created by Contractual agreement, the only way to transfer an interest would be by assignment. In such a case, the assignor, who had transferred his or her rights, would still be liable for his or her obligations (duties). In practice therefore, this would be a highly inadvisable situation. Should the assignee also get a release of his or her obligations from other partners and third parties, this would be essentially the equivalent of entering a new contract, forming a new simple partnership. (An exception to this scenario occurs in the case of inheritance. See GK RF, ch. 55, art. 1050.)
|
|
(364) GK RF, ch. 55, art. 1050.1.
|
|
(367) This is not dealt with in the Russian Civil Code. It is common practice to insert a provision making such an arrangement in the agreement.
|
|
(368) GK RF, ch. 55, art. 1051.
|
|
(370) GK RF, ch. 4, arts. 82.1, 86.1
|
|
(371) GK RF, ch. 4, art. 82.5
|
|
(372) GK RF, ch. 4, art. 84.1
|
|
(373) GK RF, ch. 4, arts. 82.2, 75
|
|
(374) GK RF, ch. 4, art. 82.1
|
|
(375) GK RF, ch. 4, art. 84.2
|
|
(376) GK RF, ch. 4, art. 85.2.
|
|
(377) The authors found no such requirement in the partnership law.
|
|
(378) N.Y. PARTNERSHIP LAW [section] 121-106 (Consol. 1977 & Supp. Feb. 2001).
|
|
(379) GK RF, ch. 4, art. 66.4.
|
|
(380) The term “citizen” includes foreigners and natural persons without citizenship. GK RF, ch. 1, art. 2.1
|
|
(381) The term “citizen” includes foreigners and natural persons without citizenship. GK RF, ch. 1, art. 2.1.
|
|
(382) GK RF, ch. 4, art. 66.4.
|
|
(383) N.Y. PARTNERSHIP LAW [sub section] 121-101(f), 121-101(g), 121-101(n) (Consol. 1977 & Supp. Feb. 2001).
|
|
(385) See generally GK RF, chs. 53, 52.
|
|
(386) While it may be theoretically possible for a trustee or executor to become a general partner in a limited partnership, the authors believe it would not be consistent with good practice. The exposure of possible unlimited liability, which could wipe out the entire trust or estate corpus, would make such an action highly imprudent. Russian fiduciaries would be very strongly advised by their lawyers not to take such a risk.
|
|
(387) GK RF, ch. 4, art. 82.4.
|
|
(388) See N.Y. PARTNERSHIP LAW [section] 121-102(a)(1) (Consol. 1977 & Supp. Feb. 2001) (requiring only that the limited partnership use the words “limited partnership” or the notation “LP”).
|
|
(389) GK RF, ch. 4, art. 89.4
|
|
(390) N.Y. PARTNERSHIP LAW [section] 121-102(a)(3)(A) (Consol. 1977 & Supp. Feb. 2001).
|
|
(391) Id. [sub section] 121-102(a)(3)(B), 121-102(a)(3)(C), 121-102(a)(3)(D) (Consol. 1977 & Supp. Feb. 2001).
|
|
(392) State Payment, art. No. 5.
|
|
(393) N.Y. PARTNERSHIP LAW [section] 121-1300(e) (Consol. 1977 & Supp. Feb. 2001).
|
|
(394) Supra notes 82-85, and accompanying text.
|
|
(395) Decree on Registration of Entities, art. 3.d.
|
|
(396) Supra notes 190-91, and accompanying text.
|
|
(397) Tax Code RF, pt. one, arts. 80.2, 83.1. Based on these provisions one can conclude that business may be done anywhere within the Russian Federation.
|
|
(398) Tax Code RF, pt. one, art. 83.
|
|
(399) Decree on Registration of Entities, art. 1.
|
|
(400) N.Y. PARTNERSHIP LAW [sub section] 121-104(b), 121-201 (Consol. 1977 & Supp. Feb. 2001).
|
|
(401) Id. [section] 121-107 (Consol. 1977 & Supp. Feb. 2001).
|
|
(402) GK RF, ch. 4, art. 83.1.
|
|
(403) Id. ch. 3, art. 52.2.
|
|
(404) Id. ch. 4, art. 83.2.
|
|
(405) N.Y. PARTNERSHIP LAW [sub-section] 121-104(b), 121-201,121-110(b), 121-201(a)(Consol. 1977 & Supp. Feb. 2001).
|
|
(406) Id. [sub-section] 121-201(a) (1)-(7) (Consol. 1977 & Supp. Feb. 2001).
|
|
(407) Id. [sub-section] 121-201(c) (Consol. 1977 & Supp. Feb. 2001).
|
|
(408) Id. [sub-section] 121-110(a), 121-110(b) (Consol. 1977 & Supp. Feb. 2001).
|
|
(409) The authors found no information in the statute concerning this.
|
|
(410) N.Y. PARTNERSHIP LAW [section] 121-110(c)(Consol. 1977 & Supp. Feb. 2001).
|
|
(411) See generally id. [sub-section] 121-101 et seq. (Consol. 1977 & Supp. Feb. 2001). A specific example is that the partnership agreement may prohibit a partner from lending to or borrowing from the limited partnership. N.Y. PARTNERSHIP LAW [section] 121-108 (Consol. 1977 & Supp. Feb. 2001).
|
|
(412) Id. [section] 121-106(a) (Consol. 1977 & Supp. Feb. 2001).
|
|
(413) GK RF, ch. 4, arts. 74, 82.5, 85.2.1.
|
|
(415) A possible reason for this omission is the entity theory as applied in Russia vs. the aggregate theory applied in New York. When considering the partnership as an entity, there is no need to allocate profits until they are distributed. Russian accounting keeps track of undistributed profits in a separate account (much like U.S. accounting practice for corporations, etc.). If, however, one considers the partnership to be an aggregate of the individual partners’ interests, it becomes essential to keep track of the interests of each, and income allocation is required as it is earned.
|
|
(416) N.Y. PARTNERSHIP LAW [section] 121-504 (Consol. 1977 & Supp. Feb. 2001).
|
|
(418) Id. [section] 121-503 (Consol. 1977 & Supp. Feb. 2001).
|
|
(420) Id. [section] 121-601 (Consol. 1977 & Supp. Feb. 2001).
|
|
(421) Tax Code RF, pt. one, arts. 19, 23.1.5
|
|
(422) 26 U.S.C. [section] 701 (2000).
|
|
(423) Id. [section] 702(a) (2000).
|
|
(424) GK RF, ch. 4, art. 79.
|
|
(425) Tax Code RF, pt. two, art. 247.
|
|
(426) GK RF, ch. 4, arts. 82.2, 78.2, 79.
|
|
(428) N.Y. PARTNERSHIP LAW [sub-section] 121-702(a)(1), 121-702(a)(3) (Consol. 1977 & Supp. Feb. 2001).
|
|
(429) Id. [section] 121-704 (Consol. 1977 & Supp. Feb. 2001).
|
|
(430) Id. [section] 121-702(a)(2) (Consol. 1977 & Supp. Feb. 2001).
|
|
(431) Id. [section] 121-702(b) (Consol. 1977 & Supp. Feb. 2001).
|
|
(432) GK RF, ch. 4, art. 79.
|
|
(433) See GK RF, ch. 4, art. 85.2.4 (stating that a limited partner may transfer shares to anyone). Since there is no additional requirement about permission of the general partners, it is not needed. There is no further information in the Civil Code about any other methods of changing limited partners (including admission of new limited partners). Because it is not prohibited, admission of new partners would follow the general provisions of the Civil Code that give general partners authority to do anything if they agree.
|
|
(434) N.Y. PARTNERSHIP LAW [section] 121-401 (Consol. 1977 & Supp. Feb. 2001).
|
|
(435) Id. [section] 121-202(b)(1) (Consol. 1977 & Supp. Feb. 2001).
|
|
(436) N.Y. PARTNERSHIP LAW [section] 121-301 (Consol. 1977 & Supp. Feb. 2001).
|
|
(437) GK RF, ch. 4, art. 82.2 (specifying that rules applicable to partners of full partnerships also apply to general partners of limited partnerships).
|
|
(438) GK RF, ch. 4, art. 76.2.
|
|
(439) Id. arts. 42, 76.1.
|
|
(445) N.Y. PARTNERSHIP LAW [section] 121-402 (Consol. 1977 & Supp. Feb. 2001).
|
|
(446) Id. [sub-section] 121-602, 121-603 (Consol. 1977 & Supp. Feb. 2001).
|
|
(447) Id. [section] 121-602 (Consol. 1977 & Supp. Feb. 2001).
|
|
(448) Id. [section] 121-602(b)(3) (Consol. 1977 & Supp. Feb. 2001).
|
|
(449) Id. [section] 121-603(a) (Consol. 1977 & Supp. Feb. 2001).
|
|
(450) GK RF, ch. 4, arts. 82.2, 78.1. While the Russian Civil Code does not specify that the value to be paid is the book value, it is practice to do so.
|
|
(451) GK RF, ch. 4, art. 82.2, 78.1.
|
|
(452) N.Y. PARTNERSHIP LAW [section] 121-604 (Consol. 1977 & Supp. Feb. 2001).
|
|
(454) GK RF, ch. 4, art. 82.4.
|
|
(456) N.Y. PARTNERSHIP LAW [section] 121-102(a)(1) (Consol. 1977 & Supp. Feb. 2001).
|
|
(457) Id.[section] 121-102(a)(2) (Consol. 1977 & Supp. Feb. 2001).
|
|
(458) Id. [section] 121-102(a)(3)(A) (Consol. 1977 & Supp. Feb. 2001).
|
|
(459) Id. [sub-section] 121-102(a)(3)(B), 121-102/a)(3)(C), 121-102(a)(3)(D)(Consol. 1977 & Supp. Feb. 2001).
|
|
(460) Id.[section] 121-102(b) (Consol. 1977 & Supp. Feb. 2001).
|
|
(46l) GK RF, ch. 4, arts. 82.1, 86.1.
|
|
(463) N.Y. PARTNERSHIP LAW [section] 101(h) (Consol. 1977).
|
|
(465) Business Activity, art. 34.1.
|
|
(466) Thus, if A lives in Lenin District, and B lives in Kirov District, and the office of the business is to be located in Central District, administrative registration must be in Central District. Business Activity, art. 34.1.
|
|
(467) Tax Code RF, pt. one, art. 83.
|
|
(468) N.Y. PARTNERSHIP LAW [sub-section] 121-104(b), 121-201 (Consol. 1977 & Supp. Feb. 2001).
|
|
(469) Id. [section] 121-105(a) (Consol. 1977 & Supp. Feb. 2001).
|
|
(470) Id. [section] 121-201(c) (Consol. 1977 & Supp. Feb. 2001).
|
|
(471) GK RF, ch. 4, art. 83.1.
|
|
(472) N.Y. PARTNERSHIP LAW [section] 121-110(b) (Consol. 1977 & Supp. Feb. 2001).
|
|
(473) Id. [section] 121-110(a) (Consol. 1977 & Supp. Feb. 2001).
|
|
(474) State Payment, art. No. 5.
|
|
(475) Registrative Fee of Proprietorship, art. 3.
|
|
(476) N.Y. PARTNERSHIP LAW [section] 121-1300(e) (Consol. 1977 & Supp. Feb. 2001).
|
|
(477) Id. [section] 121-201(c) (Consol. 1977 & Supp. Feb. 2001).
|
|
(478) GK RF, ch. 4, art. 66.4.
|
|
(479) The term “citizen” includes foreigners and natural persons without citizenship. GK RF, ch. 1, art. 2.1.
|
|
(480) GK RF, ch. 4, art. 66.4. The term “legal person” includes all legal entities, including foreign entities. GK RF, ch. 1, art. 2.1.
|
|
(481) N.Y. PARTNERSHIP LAW [sub-section] 121-101(f), 121-101(g), 121-101(n)(Consol. 1977 & Supp. Feb. 2001).
|
|
(482) GK RF, ch. 3, art. 52.2.
|
|
(483) Id. ch. 4, art. 83.2.
|
|
(484) N.Y. PARTNERSHIP LAW [section] 121-201(a) (Consol. 1977 & Supp. Feb. 2001).
|
|
(485) Id. [sub-section] 121-201(a)(1)-(7) (Consol. 1977 & Supp. Feb. 2001).
|
|
(486) Id. [section] 121-110(a) (Consol. 1977 & Supp. Feb. 2001).
|
|
(487) GK RF, ch. 4, art. 83.2
|
|
(488) Decree on Registration of Entities, art. 3.d.
|
|
(489) N.Y. PARTNERSHIP LAW [section] 121-110 (Consol. 1977 & Supp. Feb. 2001).
|
|
(490) There is no discussion anywhere in the law regarding such a minimum.
|
|
(491) GK RF, ch. 4, art. 84.1.
|
|
(493) N.Y. PARTNERSHIP LAW [section] 121-403 (Consol. 1977 & Supp. Feb. 2001).
|
|
(494) Id. [section] 121-303 (Consol. 1977 & Supp. Feb. 2001).
|
|
(495) GK RF, ch. 4, arts. 82.2, 74.1.
|
|
(497) N.Y. PARTNERSHIP LAW [section] 121-503 (Consol. 1977 & Supp. Feb. 2001).
|
|
(499) Id. [section] 121-504 (Consol. 1977 & Supp. Feb. 2001).
|
|
(500) GK RF, ch. 4, arts. 82.2, 75.
|
|
(502) N.Y. PARTNERSHIP LAW [section] 121-403(b) (Consol. 1977).
|
|
(503) Id. [section] 121-303 (Consol. 1977).
|
|
(504) Tax Code RF, pt. one, arts. 19, 23.1.5.
|
|
(505) 26 U.S.C. [section] 6031(a) (2000).
|
|
(506) Tax Code RF, pt. one, arts. 19, 23.3.
|
|
(507) Id. pt. two, art. 246.
|
|
(508) 26 U.S.C. [section] 701 (2000).
|
|
(509) Id. [section] 702(a) (2000).
|
|
(510) There is no legislation regarding this matter, and currently, no such payments are required.
|
|
(511) There is no discussion in the limited partnership law regarding this matter, and currently, no such payments are required.
|
|
(512) GK RF, ch. 3, art. 50.2.
|
|
(513) Arthur Norman Field, Morton Moskin, et al., New York and Delaware Business Entities: Choice, Formation, Operation, Financing and Acquisition, 17 WEST’S NEW YORK PRACTICE SERIES, [section] 15.1 (c)(2)(1997)
|
|
(514) Tax Code RF, pt. two, art. 226.
|
|
(515) See generally N.Y. PARTNERSHIP LAW [section] 71-a (Consol. 1977) (providing that after appointment of a receiver, the wages of employees are preferred to any other claims). This implies that the partnership is the employer. In the absence of contrary provisions, the partnership law also applies to limited partnerships.
|
|
(516) Tax Code RF, pt. one, arts. 80.2, 83.1. Based on these provisions one can conclude that business may be done anywhere within the Russian Federation.
|
|
(517) N.Y. PARTNERSHIP LAW [section] 121-107 (Consol. 1977 & Supp. Feb. 2001).
|
|
(518) GK RF, ch. 4, arts. 74, 82.5, 85.2.1.
|
|
(519) N.Y. PARTNERSHIP LAW [section] 121-504 (Consol. 1977 & Supp. Feb. 2001).
|
|
(520) Id. [section] 121-601 (Consol. 1977 & Supp. Feb. 2001).
|
|
(521) GK RF, ch. 4, arts. 82.2, 78.2, 79.
|
|
(523) N.Y. PARTNERSHIP LAW [subsection] 121-401, 121-702, 121-704 (Consol. 1977 & Supp. Feb. 2001).
|
|
(524) Id. [subsection] 121-301, 121-702, 121-704. (Consol. 1977 & Supp. Feb. 2001)
|
|
(525) There is no legislation discussing such requirements. This reflects current practice.
|
|
(526) N.Y. PARTNERSHIP LAW [section] 121-202(b) (Consol. 1977 & Supp. Feb. 2001).
|
|
(527) See GK RF, ch. 4, arts. 75.2, 78.3.
|
|
(528) N.Y. PARTNERSHIP LAW [subsection] 121-202, 121-203 (Consol. 1977 & Supp. Feb. 2001).
|
|
(529) GK RF, ch. 4, art. 79.
|
|
(530) See GK RF, ch. 4, art. 85.2.4 (stating that a limited partner may transfer shares to anyone). Since there is no additional requirement about permission of the general partners, it is not needed. There is no further information in the Civil Code about any other methods of changing limited partners (including admission of new limited partners.) Since it is not prohibited, admission of new partners would follow the general provisions of the Civil Code that give general partners authority to do anything if they agree.
|
|
(531) N.Y. PARTNERSHIP LAW [section] 121-401 (Consol. 1977 & Supp. Feb. 2001).
|
|
(532) Id. [section] 121-301 (Consol. 1977 & Supp. Feb. 2001).
|
|
(533) GK RF, ch. 4, art. 78.1. While the Russian Civil Code does not specify that the value to be paid is the fair market value, it is practice to do so.
|
|
(534) GK RF, ch. 4, art. 78.1.
|
|
(535) Id. arts. 82.2, 78.1. While the Russian Civil Code does not specify that the value to be paid is the fair market value, it is practice to do so.
|
|
(536) GK RF, ch. 4, arts. 82.2, 78.1.
|
|
(537) N.Y. PARTNERSHIP LAW [section] 121-604 (Consol. 1977 & Supp. Feb. 2001).
|
|
(539) GK RF, ch. 4, arts. 78.3, 79, 82.2, 86.1.
|
|
(540) N.Y. PARTNERSHIP LAW [section] 121-201(a)(6) (Consol. 1977 & Supp. Feb. 2001).
|
|
(541) Id. [section] 121-201(c) (Consol. 1977 & Supp. Feb. 2001).
|
|
(542) GK RF, ch. 4, arts. 68.1.
|
|
(543) N.Y. PARTNERSHIP LAW [section] 121-1101 (Consol. 1977 & Supp. Feb. 2001).
|
|
(544) Id. [section] 121-1106 (Consol. 1977 & Supp. Feb. 2001).
|
|
(545) GK RF, ch. 4, arts. 82.2, 76.1.
|
|
(546) Id. arts. 82.2, 78.1.
|
|
(547) Id. arts. 86.1, 68.1.
|
|
(548) Id. ch. 3, arts. 17, 18.
|
|
(549) Id. ch. 4, art. 86.1.
|
|
(550) N.Y. PARTNERSHIP LAW [subsection] 121-801, 121-402(f) (Consol. 1977 & Supp. Feb. 2001).
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(551) KRASNOYARSK TERRITORY COMMITTEE OF THE STATE STATISTICS, SOCIAL-ECONOMIC STATUS OF CITY KRASNOYARSK IN 2000 (2001).
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(552) Discussion of this form is planned for a future paper.
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(553) See generally N.Y. GEN. BUS. LAW [section] 130.2(a)(3) (Consol. 1980 & Supp. Feb. 2001) (restricting use of certain names unless the user is a “successor in interest” to a prior user).
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(554) Decree on Registration of Entities, art. 1.
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(555) Telephone Interview with Michael S. McMahon, senior vice-president in charge of business banking in central New York, Key Bank (July 18, 2002).
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(556) Telephone Interview with Michael S. McMahon, senior vice-president in charge of business banking in central New York, Key Bank (July 18, 2002).
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(557) GK RF, ch. 3, art. 23.1.
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(559) Id. ch. 10, art. 183.1.
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(560) Id. ch. 3, art. 23.4.
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(561) Tax Code RF, pt. one, art. 117, imposing fines often percent of income, but not less than 20,000 rubles (approximately $635). In addition, if the situation continues for more than three months, the fine is increased to twenty percent.
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(562) N.Y. GEN. BUS. LAW [section] 130.9 (Consol. 1980).
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(563) Id. [section] 130.8 (Consol. 1980).
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(564) GK RF, ch. 3, art. 50.2.
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(567) Id. ch. 9, art. 153.
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(568) Id. ch. 10, art. 183.1.
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(569) Tax Code RF, pt. one, art. 117. The fine is imposed on the individuals, not the form, since an unregistered form does not exist.
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(570), In addition to the penalties set forth at Tax Code RF, pt. one, art. 117, there are penalties imposed for failure to pay taxes, which amount to from 20 percent to 40 percent of the amount not paid. Tax Code RF, pt. one, art. 122. Finally, if the tax forms have not been filed, there are additional penalties of from 5-30 percent of the amount of the tax. Tax Code RF, pt. one, art. 119.
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(571) Ruzickav. Rager, 111 N.E.2d 878 (N.Y. 1953).
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(572) N.Y. GEN. BUS. LAW [section] 130.9 (Consol. 1980).
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(573) Id. [section] 130.8 (Consol. 1980).
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(574) GK RF, ch. 55, art. 1041. The Russian Civil Code, at Section 161, requires that the contract of simple partnership be in writing.
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(575) GK RF, ch. 55, art. 1041.
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(576) Id. ch. 9, art. 162.
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(577) Id. ch. 3, art. 50.2.
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(578). N.Y. GEN. BUS. LAW [section] 130. 1(b) (Consol. 1980 & Supp. Feb. 2001).
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(579) Id. [section] 130.9 (Consol. 1980).
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(580) Id [section] 130.8 (Consol. 1980).
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Robert Rothenberg * Tatyana V. Melnikova **
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* Assistant Professor, Division of Economics and Business, State University of New York, Oneonta, NY 13820
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** Associate Professor, Higher Business School, 31 Krasnoyarsky Rabochy uv., Krasnoyarsk, Russia, 660014
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