Full partnership is one of the oldest forms of partnerships. Nowadays it is used infrequently, but some entrepreneurs still prefer it. Those who decided to organize a full partnership, the constituent documents of which should be prepared in advance, it is recommended to read the rules of registration of the organization.
What is a general partnership?
Full partnership is one of the types of economic partnerships in which participants conclude an agreement in accordance with entrepreneurial activities. Each participant (or full comrade) is responsible for the entrusted property in full, that is, bears unlimited liability.
The Civil Code regulates a full partnership, the constituent documents of which indicate the following features:
- are created on the basis of the contract;
- Full comrades are obliged to personally participate in the activities of the organization;
- have the same rights as legal entities;
- the main goal is to carry out entrepreneurial activities;
- the responsibility of all participants is unlimited.
There are rules for those who want to become a member of a full partnership. Under the law, individual entrepreneurs can become them, like any commercial organization (according to Article 66 of the Civil Code).
When choosing the name for a full partnership, it should be noted that it should contain the words "full partnership" and the names of all participants, or the names of several participants, but then necessarily add the words "full partnership" or "company." An example of a full partnership is the imaginary firm Ivanov and the Company.
A full partnership, the constituent documents of which must be submitted for registration, is created on the basis of the constituent agreement. In it, the founders determine their participation in the activities of the partnership, agree on the distribution of profits and expenses and the ways in which the organization is managed.
Each participant is obliged to sign a memorandum of association, in which the following information is indicated:
- name, corresponding to the legislation;
- the size and composition of the equity capital;
- the management of the partnership;
- size, composition and terms of making deposits;
- responsibility for breach of contract.
The memorandum of association has several appointments. It contains points that determine the relationship between full comrades. Moreover, the agreement denotes the working conditions of the partnership with other organizations. Like any document, the contract is formalized in accordance with the law and must include all the items. It consists in writing, is made in the form of one document and signed by each participant.
Name of general partnership
The law does not require that the contract should be in the form of one document. However, this is a mandatory condition when providing it for registration. Moreover, when presenting a contract to third parties, it is obligatory to show a single document.
From the moment of signing the contract, the members of the general partnership must fulfill their rights and obligations. However, for third parties, it enters into force only after registration. The registration of the foundation agreement takes place in accordance with the Law on Registration of Legal Entities. The name must comply with all the rules. An example of a full partnership with the right name is Abzal and K.
Obligations of participants
A full partnership, the constituent documents of which were signed by all the participants, imposes on them rights and duties. This is important to know. Participants in a general partnership can not consist of more than one partnership. By law, they do not have the right to make transactions on their own behalf without the consent of the others. Everyone is obliged to contribute at least half of his contribution to the capital by the time the partnership is registered. The remaining part is paid within the time specified in the contract. Each comrade is required to participate in the activities of the organization in accordance with the rules specified in the memorandum of association.
Rights of participants
The founders of the general partnership have the right to leave the partnership before the deadline. In this case, a person must declare his desire at least for 6 months. If the full partnership was created for a certain period, then the output is possible only for a good reason.
A participant may be expelled from the partnership in a judicial procedure if the other participants voted for it. In this case, he is paid a value corresponding to his share in the capital. The shares of the retired participants are transferred in the order of succession, but the other comrades should vote for the successor. Composition of comrades can be changed without exception of someone. In this case, the share in the working capital is transferred to another participant or third party. The operation of the operation requires the consent of the other comrades.
Liquidation of a general partnership
Since a full partnership is highly dependent on each participant, there are many events that can lead to its elimination. Naturally, the death of the participant is the reason for the termination of the work of the partnership. If the comrade is a legal entity, its liquidation will serve as the basis for the liquidation of the organization.
Other reasons are:
- circulation of creditors to one of the participants in order to recover property;
- judicial proceedings against one of the comrades;
- recognition of the participant as a bankrupt.
The general partnership has the right to continue activities, if such an item is specified in the memorandum of association.
If the number of participants has decreased to one, then the participant has 6 months to convert the general partnership into an economic company. Otherwise, it is subject to liquidation.
What is a limited partnership
Full and limited partnerships differ in several points. A limited partnership, which is also called a partnership on faith, differs from the complete one in that it includes not only full comrades, but also investors (limited partners). They take the risk for losses that are related to the activities of the partnership. The amounts depend on the contributions made. The commanders do not take part in business activities. Unlike full comrades, investors can be not only individual entrepreneurs and commercial organizations, but also legal entities.
The commanders have the right:
- to receive profit according to the share in the share capital;
- require annual reports on the work of the partnership.
There are a number of restrictions applicable to depositors. They can not become state bodies, as well as local self-government bodies. They have no right to speak on behalf of the partnership, except by proxy.
Production cooperative as a form of collective entrepreneurship
One form of collective enterprise is called cooperative. The general partnership, unlike him, has more restrictions in terms of participants. Participants in a production cooperative can not be individual entrepreneurs, but they personally work in a cooperative. Each member has one vote, regardless of the size of the contribution.
In the civil code, the production cooperative is called an artel, since the profit depends on the labor contribution of the participant, and not on its contribution. In the event of a debt, everyone is liable for its repayment in the amount determined in advance by the charter.
The advantage of this form of entrepreneurship is that the profit is distributed in accordance with the labor contribution. The property is also distributed in the event that the production cooperative has been liquidated. The maximum number of members is not limited by legislation, which allows you to create cooperatives of all sizes. Each participant has equal rights and one voice, which stimulates the interest of members in the activities of the organization.
The minimum number of members is limited to five. The downside is that this greatly limits the possibility of creating a cooperative.