Before you read
Discuss these questions.
1 Do you think it is difficult to start your own business in Russia? Why?
2 If you had a chance how would you start?
3 What action would you take to register your company?
4 What business organizations do you know? What do they do?
Text A
Creation of a Legal Entity
In Russia, an establishment may only he considered a legal entity if it is built by one of the models directly envisaged by the Civil Code. Each type of Russian legal entity is formed upon the adoption by its founders of a Charter and/or constituent agreement and the registration of such documents.
So, a legal entity is subject to the state registration. The state registration of legal entities is deemed to be conducted and the legal entity recognized as created at the moment of entry to the Unified State Register of Legal
Entities. Every company must have an object clause which states the purpose for which the company has been formed. This clause is contained in the company Charter and determines all company activities.
The Civil Code recognizes various forms of business organizations, including general and commandite partnerships, limited liability companies, additional liability companies, open and closed joint-stock companies, and the state and municipal unitary enterprises. The Russian legislation does not contemplate a joint venture as a separate legal entity. Instead, foreign investors may act as founders, participants or shareholders of any entity, organized in a form, recognized by the Civil Code.
Vocabulary
Civil Code n Гражданский кодекс
clause n статья
commandite partnership n коммандитное товарищество (товарищество, в
котором сочетаются полное товарищество и общество с ограниченной
ответственностью)
constituent adj учреждающий
contemplate v рассматривать
deem v полагать, считать
envisage v предусматривать
general partnership n товарищество с неограниченной (имущественной)
ответственностью
joint-stock company n акционерная компания
joint venture n совместная компания
legal entity n субъект права, юридическое лицо
municipal enterprise n муниципальное предприятие
Unified State Register Единый государственный регистр
unitary enterprise n унитарное предприятие
Reading tasks
Answer these questions.
1 What is a legal entity?
2 How is a legal entity formed?
3 When is the legal entity recognized as created?
4 What forms of business organizations are recognized by the Civil Code?
5 How are foreign investors organized?
Vocabulary tasks
A Match the legal terms with their definitions.
| 1 legal entity 2 founder 3 agreement 4 clause 5 company Charter 6 joint venture | a an arrangement or promise to do something, made by two or more people or organizations ba part of a legal document that deals with a particular item or subject c a business activity in which two or more companies have invested together d a written statement of the principles and aims of an organization ean organization considered as a separate fa person who starts a new company or organization as a separate independent unit for legal purposes |
B Read the text. Find and correct six mistakes in the use of the passive, present simple and irregular verbs. The first mistake has already been corrected.
Any legal entity must be built by the model which are envisaged in the Civil Code. The registration of a legal entity is conduct in accordance with the Federal Law. Rights of obligation includes the right participate in the management of a legal entity. Legal entities builded by this model include partnerships, companies etc. The legal entity own the property under the right of economic management.
C Choose an appropriate linking word to connect these sentences: therefore, accordingly, and, that (2), similarly, also, when, finally, in particular.
The essence of the first model lays in the fact 1)__________ the founders (the participants) of the legal entity completely lose their rights of estate to their property when transferring that property to the legal entity. 2)__________, they do not have these rights to the acquired property. 3)__________, property transferred by the founders (the participants) 4)__________ acquired by the legal entity itself is deemed to be owned by the legal entity.
The peculiarity of the second model is 5)__________ the founder, transferring the corresponding property to the legal entity in the possession and disposa1, remains the owner of that property. 6)__________, the founder is deemed to be the owner of all property acquired by the legal entity during its operation. 7)__________, the rights of estate for one and the same property are possessed both by the founder (owner) and by the legal entity. The legal entity owns the property under the right of economic management or operative management, derivative from the property right. The given model is applied to the state and municipal unitary enterprises, and organizations, financed by the owners. 8)__________, these are organizations whose owner is the Russian Federation, a subject of the Russian Federation, or a municipal entity (a ministry, a department, a school, an institute or a hospital, etc.).
9)__________, according to the third model the legal entity becomes the owner of all the property in its possession.
Text B