Full partnership: founding documents. Charter of a legal entity

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The general partnership is one of the oldest forms of partnerships. Nowadays, it is used infrequently, but some entrepreneurs still prefer it. Those who decide to organize a general partnership, the constituent documents of which should be prepared in advance, are advised to familiarize themselves with the rules for registering an organization.

What is a general partnership

A general partnership is one of the types of economic partnerships in which the participants enter into an agreement in accordance with entrepreneurial activities. Each participant (or general partner) is fully responsible for the entrusted property, that is, bears unlimited liability.

The Civil Code regulates a general partnership, the founding documents of which indicate the following features:

- are created on the basis of the contract;

- full partners are required to personally participate in the activities of the organization;

- have the same rights as legal entities;

- the main purpose is to carry out business activities;

- responsibility of allparticipants is unlimited.

There are rules for those who want to become a member of a general partnership. By law, individual entrepreneurs can become them, like any commercial organization (according to Article 66 of the Civil Code).

When choosing a name for a general partnership, it should be noted that it must contain the words "general partnership" and the names of all participants, or the names of several participants, but then it is imperative to add the words "general partnership" or "company". An example of a general partnership is the imaginary firm Ivanov and Co.

Required documents

A general partnership, the constituent documents of which must be submitted for registration, is created on the basis of a memorandum of association. In it, the founders determine their participation in the activities of the partnership, agree on the distribution of profits and expenses and how to manage the organization.

Each member is required to sign a memorandum of association containing the following information:

- legal name;

- location;

- size and composition of the share capital;

- partnership management procedure;

- size, composition and timing of deposits;

- liability for breach of contract.

The memorandum of association has several purposes. It contains clauses defining relations between full partners. Moreover, the contract specifies the terms of the partnership with other organizations. Like any document, a contractis drawn up in accordance with the law and must include all items. It is in writing, drawn up in the form of a single document and signed by each participant.

Name of the general partnership

The law does not require that the contract must be in the form of a single document. However, this is a prerequisite when providing it for registration. Moreover, when presenting a contract to third parties, it is mandatory to show a single document.

From the moment of signing the contract, the participants in a general partnership must fulfill their rights and obligations. However, for third parties, it comes into force only after registration. Registration of the memorandum of association takes place in accordance with the Law on Registration of Legal Entities. The name must comply with all rules. An example of a general partnership with the correct name is "Abzal and K".

Responsibilities of participants

A general partnership, the constituent documents of which were signed by all participants, imposes rights and obligations on them. This is important to know. Participants in a full partnership may not be members of more than one partnership. By law, they do not have the right to make transactions on their own behalf without the consent of others. Everyone is obliged to make at least half of their contribution to the capital by the time the partnership is registered. The remaining part is paid within the period specified in the contract. Each partner is obliged to participate in the activities of the organization in accordance with the rules specified in the memorandum of association.

Rights of members

Foundersfull partnership has the right to leave the partnership before the specified period. In this case, a person is obliged to declare his desire at least 6 months in advance. If a general partnership was created for a certain period, then exit is possible only for a good reason.

A member may be expelled from the partnership in court if the other members voted for it. In this case, he is paid the value corresponding to his share in the capital. The shares of the retired participants are transferred in the order of succession, but the rest of the comrades must vote for the successor. The composition of comrades can be changed without exclusion of anyone. In this case, the share in the share capital is transferred to another participant or a third party. The operation requires the consent of the other comrades.

Liquidation of a general partnership

Because a general partnership is highly dependent on each participant, there are many events that can lead to its liquidation. Naturally, the death of a member is the reason for the termination of the partnership. If the partner is a legal entity, its liquidation will serve as the basis for the liquidation of the organization.

Other reasons are:

- an appeal by creditors to one of the participants in order to recover property;

- legal proceedings against one of the comrades;

- declaring the participant bankrupt.

A general partnership has the right to continue its activities if such a clause is specified in the memorandum of association.

If the number of participants has decreased to one, then the participant has 6 months to transform the general partnership into a business entity. Otherwise, it is subject to liquidation.

What is a limited partnership

General and limited partnerships differ in several ways. A limited partnership, which is also called a limited partnership, differs from a full partnership in that it includes not only general partners, but also contributors (limited partners). They take the risk for losses that are associated with the activities of the partnership. The amounts depend on the contributions made. Limited partners do not take part in entrepreneurial activities. Unlike general partners, contributors can be not only individual entrepreneurs and commercial organizations, but also legal entities.

Commandists have the right to:

- make a profit according to the share in the share capital;

- require annual reports on the work of the partnership.

There are a number of restrictions that apply to contributors. They cannot be state bodies, as well as local governments. They are not authorized to act on behalf of the partnership except by proxy.

Production cooperative as a form of collective enterprise

One form of collective enterprise is called a cooperative. A general partnership, in contrast, has more restrictions in terms of participants. Membersproduction cooperative cannot be individual entrepreneurs, but personally work in the cooperative. Each member has one vote regardless of the size of the contribution.

In the civil code, a production cooperative is called an artel, since profit depends on the labor contribution of the participant, and not on his contribution. In case of debt, everyone is responsible for its repayment in the amount predetermined by the charter.

The advantage of this form of business is that the profit is distributed in accordance with the labor contribution. Property is also distributed if the production cooperative has been liquidated. The maximum number of members is not limited by law, which allows you to create cooperatives of any size. Each member has equal rights and one vote, which stimulates the interest of members in the activities of the organization.

Minimum number of members is limited to five. The downside is that this greatly limits the possibility of creating a cooperative.