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  • The General Partnership
    The General Partnership is a partnership the participants (General Partners) of which run a business on behalf of the partnership and bear the subsidiary responsibility under its commitment on a joint and several liability basis in accordance with the agreement.

    The reserve capital is formed by contributing the deposits by the founders of the partnership. As a rule the proportion of the participants’ deposits identifies the distribution of profit and economic losses of the partnership as well as the rights of the participants for getting a part of the assets or its cost in case of leaving the partnership.

    The General Partnership doesn’t have the Articles of Association; it is established and operates on grounds of the Agreement of Incorporation signed by all the participants. The Agreement should include obligatory for any legal entity data (name, location, the procedure of joint activities of the participants concerning the partnership establishment, the conditions of property transfer and participation in its business activities, management procedure, the conditions and procedure of the profit and economic losses distribution between the participants, the procedure of leaving the partnership) as well as the amount and structure of the reserve capital, the amount and change procedure of the participants’ deposits in the reserve capital, the amount, structure, terms and procedure of deposit contribution, the liabilities of participants for breach of duties on deposit contribution.

    It is forbidden to participate in more than one general partnership. A participant doesn’t have the right to implement transactions on behalf of itself without the consent of the other participants if these transactions are similar to those which are the objects of activities of the partnership. By the time of partnership registration, each participant is obliged to contribute at least a half of his/her deposit to the reserve capital (the other part is contributed within the terms stated in the Agreement of Incorporation). Moreover, each partner must participate in its business activities in accordance with the Agreement of Incorporation.

    The management of the General Partnership is performed by common agreement of all the participants; as a rule, each participant has one vote (the Agreement of Incorporation can arrange another procedure as well we the possibility to take a decision by a majority vote). Each participant has the right to inspect all the documents of the partnership as well as (if the Agreement doesn’t arrange another type of business conduction) to act on behalf of the partnership.

    A participant has the right to leave the partnership established with no time limits by declaring his/her contemplation at least 6 months in advance; if the partnership is established for a specified period, the withdrawal from general partnership is acceptable only for a valid reason. Alongside with that there is a possibility to expel any of the participants in a judicial proceeding by unanimous consent of other participants. As a rule, the withdraw participant is paid the cost of the partnership assets part which is commensurate with his/her share in the reserve capital. The shares of the participants are inherited and are passed by way of succession; however the entrance of the lawful heir (legal successor) to the partnership is possible only with the consent of other participants. Finally, it is possible to change the constitution of the partnership by transferring his/her share in the reserve capital or its part by one of the participants (with the consent of others) to the other participant or the third party.

    Due to extreme mutual dependence of the general partnership and its participants, a great number of events concerning its participants can lead to dissolution of the partnership. For example, withdrawal of a participant, the death of a participant – natural person or the dissolution of a participant – legal entity; performing the survival proceedings on a participant on the basis of a court decision, adjudication of a participant in bankruptcy. However the partnership can continue its activity if this is covered by the Agreement of Incorporation of the agreement of the other participants.

    The General Partnership can be dissolved under the agreement of its participants, on the basis of a court decision if the legal requirements were violated, or in accordance with the bankruptcy procedure. The reason for dissolution of the general partnership can also be decreasing the quantity of its participants to one (within 6 months since the moment of such decreasing the participant has the right to reorganize the partnership into a business company).
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