The Civil Code of the Russian Federation

(with the Additions and Amendments of February 20, August 12, 1996,
October 24, 1997, July 8, December 17, 1999, April 16, May 15,
November 26, 2001, March 21, November 14, 26, 2002,
January 10, March 26, November 11, December 23, 2003)

Part I
Section I
Subsection 2
Chapter 4
The Legal Entities
_ 1.
The Basic Provisions
_ 2.
The Economic Partnerships and Companies
__ 1.
The General Provisions
__ 2.
The General Partnership
__ 3.
The Limited Partnership
__ 4.
The Limited Liability Company
__ 5.
The Double Liability Company
__ 6.
The Joint-Stock Company
__ 7.
The Subsidiary and Dependent Companies
_ 3.
The Production Cooperatives
_ 4.
The State-Run and Municipal Unitary Enterprises
_ 5.
The Non-Profit Organizations

Chapter 4. The Legal Entities

_ 1. The Basic Provisions


Article 48. The Concept of the Legal Entity


1. The legal entity shall be recognized as an organization, which has in its ownership, economic management or operative management the set-apart property and which is answerable by its obligations with this property and may on its own behalf acquire and exercise the property and the personal non- property rights, to discharge duties and to come out as a plaintiff and as a defendant in the court. The legal entities shall have an independent balance or an estimate.
2. In connection with taking part in the formation of the property of the legal entity, its founders (participators) shall be entitled to the rights of obligation with respect to this legal entity, or the rights of estate to its property. To the legal entities, with respect to which their participants have the rights of obligation, shall be referred the economic partnerships and companies, and the production and consumer cooperatives.
To the legal entities, with respect to whose property their founders have the right of ownership or another right of estate, shall be referred the state and the municipal unitary enterprises, as well as the institutions, financed by the owner.
3. To the legal entities, with respect to which their founders (participants) shall not have the property rights, shall be referred the public and religious organizations (the associations), the charity and other funds, and the amalgamations of the legal entities (the associations and the unions).

Article 49. The Legal Capacity of the Legal Entity


1. The legal entity shall enjoy the civil rights that correspond to the goals of its activity, stipulated in its constituent documents, and shall discharge the duties related to this activity. The commercial organizations, with the exception of the unitary enterprises and the other law-stipulated kinds of organizations, shall possess the civil rights and discharge the civil duties, indispensable for the performance of any kinds of activity that are not prohibited by the law.
The legal entity shall engage in the individual kinds of activity, the list of which shall be defined by the law, only on the ground of a special permit (license).
2. The legal entity may be restricted in its rights only in the cases and in conformity with the procedure, stipulated by the law. The decision on the restriction of its rights may be appealed against by the legal entity in the court.
3. The legal capacity of the legal entity shall arise at the moment of its establishment (Item 2 of Article 51) and shall cease at the moment, when its liquidation is completed (Item 8 of Article 63). The right of the legal entity to engage in an activity, for the performance of which a license shall be drawn, shall arise from the moment of its obtaining such a license, or from the time indicated in the license, and shall cease after the expiry of the term of its operation, unless otherwise stipulated by the law or by the other legal acts.

Article 50. Commercial and Non-Profit Organizations


1. The legal entities may be either the organizations, which see deriving profits as the chief goal of their activity (the commercial organizations), or those organizations, which do not see deriving profits as such a goal and which do not distribute the derived profit among their participants (the non-profit organizations).
2. The legal entities that are commercial organizations, may be set up in the form of the economic partnerships and companies, of the production cooperatives and of the state and the municipal unitary enterprises.
3. The legal entities that are non-profit organizations, may be set up in the form of the consumer cooperatives, of the public or religious organizations (associations), financed by the owner of the institutions, of the charity and other funds, and also in the other law-stipulated forms. The non-profit organizations shall engage in the business activity only so far as it helps them to achieve the goals, in the name of which they have been established, and of the kind that corresponds to these goals.
4. The creation of the alliances of the commercial and (or) the non-profit organizations in the form of associations and unions shall be admissible.

Article 51. State Registration of Legal Entities


1. A legal entity shall be subject to state registration with the authorized state body in conformity with the procedure, laid down by the Law on Registration of Legal Entities. The data on state registration shall be entered to the Unified State Register of Legal Entities, which shall be open to the general public. The refusal of state registration of a legal entity shall be only allowed in the cases stipulated by law.
The refusal of state registration of a legal entity, as well as the avoidance of such registration, may be appealed against with the court.
2. The legal entity shall be regarded as established from the moment of making an appropriate entry to the Unified State Register of Legal Entities.

Article 52. Constituent Documents of the Legal Entity


1. The legal entity shall operate on the ground of the Rules, or of the constituent agreement and the Rules, or only of the constituent agreement. In the law-stipulated cases, the legal entity, which is not a non-profit organization, may operate on the ground of the general provisions on the given type of organizations. The constituent agreement of the legal entity shall be signed, and the Rules shall be approved by its founders (participants).
The legal entity, created in conformity with the present Code by one founder, shall operate on the ground of the Rules, approved by this founder.
2. In the constituent documents of the legal entity shall be indicated the name of the legal entity, the place of its location, the way in which the legal entity's activity is managed, and the other information, required by the law for legal entities of the corresponding type. In the constituent documents of the non-profit organizations and of the unitary enterprises, and in the law-stipulated cases - also of the other commercial organizations, shall be defined the object and the goals of the legal entity's activity. The definition of the object and of the goals, pursued by the commercial organization, may also be stipulated by the constituent documents, in the cases, when it is not obligatory by the law. In the constituent agreement, the founders shall assume upon themselves an obligation to create the legal entity, shall delineate the order of their joint activities, involved in its creation, and the terms for the transfer to it of their property and for their participation in its activity. The agreement shall also define the terms and procedure for the distribution of the profits and losses among the participants, for the management of the legal entity's activity and for the founders' (the participants') withdrawal from its structure.
3. The amendments, made in the constituent documents, shall come into force for the third persons from the moment of their state registration, and in the cases, established by the law - from the moment of notifying about the effecting of such amendments the body, performing the state registration. However, the legal entities and their founders (participants) shall not have the right to refer to the absence of the registration of such amendments in their relationships with the third persons, who have acted with account for such amendments.

Article 53. The Legal Entity's Bodies


1. The legal entity shall acquire the civil rights and shall assume upon itself the civil duties through its bodies, acting in conformity with the law, with the other legal acts and with the constituent documents. The procedure for the appointment or the election of the legal entity's bodies shall be laid down by the law and by the constituent documents.
2. In the law-stipulated cases, the legal entity shall have the right to acquire the civil rights and to assume upon itself the civil duties through its participants.
3. The person, who by force of the law or of the legal entity's constituent documents comes out on its behalf, shall act in the interests of the legal entity it represents honestly and wisely. He shall be obliged, upon the demand of the founders (the participants) of the legal entity, to recompense the losses he has inflicted upon the legal entity, unless otherwise stipulated by the law or by the agreement.

Article 54. The Name and the Place of Location of the Legal Entity


1. The legal entity shall have its own name, which shall contain an indication of its legal-organizational form. The names of non-commercial organisations, and in the cases specified by law, the names of commercial organisations shall contain an indication of the nature of the legal person's activity.
2. The place of location of a legal entity shall be determined by the place of its state registration. The state registration of a legal entity shall be carried out at the location of a standing executive body thereof, and in the event of the absence of a standing executive body, it shall be done by other body or person empowered to act on behalf of the legal entity without a letter of authority.
3. The name and the place of location of the legal entity shall be pointed out in its constituent documents.
4. The legal entity, which is a commercial organization, shall have a trade name. The legal entity, whose trade name has been registered in conformity with the established procedure, shall be entitled to an exclusive right of its use.
The person, illegally making use of somebody else's registered trade name, shall be obliged, upon the demand of the owner of the right to the trade name, to stop making use of it and to recompense the inflicted losses.
The procedure for the registration and the use of the trade name shall be laid down by the law and by the other legal acts in conformity with the present Code.

Article 55. The Representations and the Subsidiaries


1. The representation shall be a set-apart subdivision of the legal entity, situated outside of the place of its location, which represents and protects the legal entity's interests.
2. The subsidiary shall be the legal entity's set-apart subdivision, situated outside of the place of its location and performing all its functions or a part thereof, including the functions of representation.
3. The representations and the subsidiaries shall not be legal entities. They shall be given the property of the legal entity, by which they have been set up, and shall operate in conformity with the provisions it has approved. The managers of the representations and the subsidiaries shall be appointed by the legal entity and shall act on the ground of its warrant.
The representations and the subsidiaries shall be named in the constituent documents of the legal person, who has set them.

Article 56. The Legal Entity's Responsibility


1. The legal entities, with the exception of the institutions, financed by their owner, shall be answerable by their obligations with the entire property in their possession.
2. The state-run enterprise and the institution, financed by the owner, shall be answerable by their obligations in conformity with the order and on the terms, stipulated by Item 5 of Article 113 and by Articles 115 and 120 of the present Code.
3. The founder (the participant) of the legal entity or the owner of its property shall not be answerable by the legal entity's obligations, and the legal entity shall not be answerable by the obligations of the founder (the participant) or of the owner, with the exception of the cases, stipulated by the present Code or by the constituent documents of the legal entity. If the insolvency (bankruptcy) of the legal person has been caused by the founders (participants), by the owner of the legal entity's property or by the other persons, who have the right to issue the obligatory instructions for the given legal entity, or may determine its actions in any other way, in case the legal entity's property proves to be insufficient, the subsidiary liability by the legal entity's obligations may be imposed upon such persons.

Article 57. Reorganization of the Legal Entity


1. The reorganization of the legal entity (the merger, affiliation, division, branching off, transformation) shall be effected by the decision of its founders (participants) or of the legal entity's body, authorized for this by the constituent documents.
2. In the law-stipulated cases, the reorganization of the legal entity in the form of its division or of the branching off from its structure of one or of several legal entities, shall be effected by the decision of the authorized state bodies or by the court decision. If the founders (the participants) of the legal entity, its authorized body or the legal entity's body, which has been authorized to effect the reorganization by its constituent documents, fail to effect the legal entity's reorganization within the term, fixed in the decision of the authorized state body, the court shall appoint, upon the claim of the said state body, an outside manager as the legal entity and shall entrust to him the given legal entity's reorganization. From the moment of the appointment of an outside manager, the powers, involved in the management of the legal entity's affairs, shall pass to him. The outside manager shall come out on behalf of the legal entity in the court, shall compile the divisional balance and shall present it for examination to the court, together with the constituent documents of the legal entities, created as a result of the reorganization. The endorsement of the said documents by the court shall be the ground for the state registration of the newly emerging legal entities.
3. In the law-stipulated cases, the reorganization of the legal entities in the form of the merger, affiliation or transformation shall be effected only upon the consent of the authorized state bodies.
4. The legal entity shall be regarded as reorganized, with the exception of the cases of reorganization in the form of affiliation, from the moment of the state registration of the newly created legal entities. In case of the reorganization of the legal entity in the form of another legal entity's affiliation to it, the former shall be regarded as reorganized from the moment of making an entry about the cessation of activity of the legal entity, affiliated to it, into the State Register of the Legal Entities.

Article 58. Legal Succession in the Reorganization of Legal Entities


1. In case of the merger of the legal entities, the rights and duties of every one of them shall pass to the newly emerged legal entity in conformity with the transfer deed.
2. In case of the legal entity's affiliation to another legal entity, the rights and duties of the former legal entity shall pass to the latter legal entity in conformity with the transfer deed.
3. In case of the division of the legal entity, its rights and duties shall pass to the newly emerged legal entities in conformity with the divisional balance.
4. In case of the branching off from the structure of the legal entity of one or of several legal entities, the rights and duties of the reorganized legal entity shall pass to every one of these in conformity with the divisional balance.
5. In case of the transformation of the legal entity of one type into a legal entity of a different type (the change of its legal-organizational form), the rights and duties of the reorganized legal entity shall pass to the newly emerged legal entity in conformity with the transfer deed.

Article 59. The Transfer Deed and the Divisional Balance


1. The transfer deed and the divisional balance shall contain provisions on the legal succession by all obligations of the reorganized legal entity with respect to all its creditors and debtors, including the obligations, disputed by the parties.
2. The transfer deed and the divisional balance shall be endorsed by the founders (participants) of the legal entity or by the body, which has adopted the decision on the reorganization of the legal entities, and shall be presented, together with the constituent documents, for the state registration of the newly emerged legal entities, or for the introduction of amendments into the constituent documents of the existing legal entities. The failure to present, together with the constituent documents, correspondingly, the transfer deed or the divisional balance, and the absence in these of the provisions on the legal succession by the obligations of the reorganized legal entity, shall entail the refusal to effect the state registration of the newly emerged legal entities.

Article 60. Guarantees for the Rights of the Legal Entity's Creditors in Case of Its Reorganization


1. The founders (the participants) of the legal entity or the body, which have adopted the decision on the legal entity's reorganization, shall be obliged to notify about it in written form the creditors of the reorganized legal entity.
2. The creditor of the reorganized legal entity shall have the right to claim that the obligation, by which the given legal entity is the debtor, be terminated or that the latter discharge it before the fixed date.
3. If the divisional balance does not make it possible to define the legal successor of the reorganized legal entity, the newly emerged legal entities shall bear to its creditors the joint responsibility.

Article 61. Liquidation of the Legal Entity


1. The liquidation of the legal entity shall entail its termination without the transfer of its rights and duties to the other entities by way of legal succession.
2. The legal entity may be liquidated: - by the decision of its founders (participants), or of the legal entity's body, authorized for this by the constituent documents, including in connection with the expiry of the term, for which the given legal entity has been created, with its achieving the goal, for the sole purpose of which it has been established;
- by the court decision in case of gross violations of law made in the establishment thereof, where these violations cannot be rectified, or of the performance of an activity without a proper permit (license), or of an activity, prohibited by the law, or with other gross violations of the law or of the other legal acts, or in case of the systematic performance by the public or by the religious organization (the association), by the charity or the other fund of an activity, contradicting the goals, set in its Rules, and also in the other cases, stipulated by the present Code.
3. The claim for the liquidation of the legal entity on the grounds, stipulated in Item 2 of the present Article, may be lodged with a court by the state body or by the local self-government body, to which the right to present such a claim has been granted by the law. By the court decision on the liquidation of the legal entity, the fulfillment of the duties, involved in implementing the liquidation of the legal entity, may be imposed upon its founders (participants), or upon the body, authorized to effect the liquidation of the legal entity by its constituent documents.
4. The legal entity, which is a commercial organization or which operates in the form of a consumer cooperative, a charity or another fund, shall also be liquidated in conformity with Article 65 of the present Code as a result of its being recognized as insolvent (bankrupt). If the cost of the legal entity's property proves to be insufficient to satisfy the creditors' claims, it shall be liquidated only in conformity with the procedure, stipulated by Article 65 of the present Code.
The provisions on the liquidation of the legal entities as a result of their insolvency (bankruptcy) shall not be extended to the state-run enterprises.

Article 62. The Duties of the Person Who Has Adopted the Decision on the Liquidation of the Legal Entity


1. The founders (the participants) of a legal entity or the body, who (which) have adopted the decision on liquidation of the legal entity, shall be obliged to immediately notify about this in written form the authorized state body which shall enter the information on the given legal entity, being in the process of liquidation, to the Unified State Register of Legal Entities.
2. The founders (the participants) of a legal entity or the body, who (which) have adopted the decision on liquidation of the legal entity, shall appoint a liquidation commission (the liquidator), and shall establish, in conformity with the present Code and other laws, the procedure for, and the term of, liquidation thereof.
3. From the moment of appointment of the liquidation commission, the powers involved in the management of the legal entity's affairs shall pass to it. The liquidation commission shall also come out on behalf of the liquidated legal entity in the court.

Article 63. Procedure for the Legal Entity's Liquidation


1. The liquidation commission shall send to the press organs, in which information on the state registration of the legal entity is published, an advertisement on its liquidation and on the procedure and the term for the claims to be filed by its creditors. The liquidation commission shall take measures for the exposure of the creditors and the exaction of the debit indebtedness, and shall notify the creditors in written form about the liquidation of the legal entity.
2. After the expiry of the term fixed for the creditors' filing claims, the liquidation commission shall compile an intermediary liquidation balance, containing information on the structure of the legal entity's property, on the list of the creditors' claims and on the results of their examination. The intermediary liquidation balance shall be approved by the founders (the participants) of a legal entity or by the body, which has adopted the decision on the legal entity's liquidation. In the cases established by law the intermediary liquidation balance shall be endorsed by agreement with the authorized state body.
3. If the monetary means at the disposal of the legal entity under liquidation (except for the institutions) prove to be insufficient to satisfy the creditors' claims, the liquidation commission shall organize the sale of the legal entity's property at a public auction in conformity with the procedure, laid down for the execution of the court decisions.
4. The payment of monetary amounts to the creditors of the liquidated legal entity shall be effected by the liquidation commission according to the order of priority, established by Article 64 of the present Code, in conformity with the intermediary liquidation balance, beginning with the date of its approval, with the exception of the creditors of the fifth turn, to whom the payments shall be made on the expiry of one month from the date of the endorsement of the intermediary liquidation balance.
5. After completing the settlements with the creditors, the liquidation commission shall compile the liquidation balance, which must be approved by the founders (the participants) of the legal entity, or by the body, which has adopted the decision on the legal entity's liquidation. In the cases established by law the liquidation balance shall be approved by agreement with the authorized state body.
6. In case the property at the disposal of the liquidated state-run enterprise, or the monetary means at the disposal of the liquidated institution are insufficient to satisfy the creditors' claims, the latter shall have the right to turn to the court with a claim for the satisfaction of the rest of the claims at the expense of the owner of the property of this enterprise or institution.
7. The property of the liquidated legal person, left after the creditors' claims are satisfied, shall be passed to its founders (participants), who have the rights of estate to this property, if not otherwise stipulated by the law, by the other legal acts or by the founding documents of the legal entity.
8. The liquidation of the legal entity shall be regarded as completed and the legal entity as having ceased existence after an entry to this effect has been made into the Unified State Register of the Legal Entities.

Article 64. Satisfaction of the Creditors' Claims


1. In case of the liquidation of a legal entity, the creditors' claims shall be satisfied in the following order of priority: - in the first turn shall be satisfied the claims of the citizens, to whom the liquidated legal entity bears responsibility for causing harm to the life or the health, by way of capitalization of the corresponding regular payments;
- in the second turn shall be effected the settlements, involved in the payment of retirement allowances and in the remuneration of labour to the persons, who have been employed on the ground of a labour agreement, including by a contract, and also those involved in the payment of fees by the author's contracts.
- in the third turn shall be satisfied the claims of the creditors by the obligations, secured against by the property of the liquidated legal entity;
- in the fourth turn shall be repaid the debts by the obligatory payments into the budget and into the extra-budgetary funds;
- in the fifth turn shall be effected the settlements with the other creditors in conformity with the law.
In the liquidation of banks or any other credit institutions attracting the resources of citizens, in the first place there shall be satisfied the demands of the citizens who are creditors of the banks or of any other credit institutions attracting the funds of citizens and also the requirements for the organisation that discharges the functions of the obligatory insurance of deposits in connection with the payment of compensation for deposits in accordance with the law on the insurance of deposits of individuals with banks.
2. The claims of each of these groups shall be satisfied after fully satisfying the claims of the previous groups.
3. In case the property of the liquidated legal entity proves to be insufficient, it shall be distributed among the creditors of the corresponding group proportionately to the amounts of the claims liable to satisfaction, if not otherwise stipulated by the law.
4. In case the liquidation commission refuses to satisfy the creditor's claim or evades its consideration, the creditor shall have the right, until the approval of the legal entity's liquidation balance, to turn to the court with a claim against the liquidation commission. By the court decision, the creditor's claims may be satisfied at the expense of the remaining property of the liquidated legal entity.
5. The creditor's claims, lodged after the expiry of the term, fixed by the liquidation commission for their presentation , shall be satisfied from the property of the liquidated legal entity, which has been left after the duly lodged creditors' claims have been satisfied.
6. The creditors' claims, left unsatisfied because of the insufficiency of the property of the liquidated legal entity, shall be regarded as settled, the same as the claims of the creditors, which have not been recognized by the liquidation commission, if the creditor did not file the claim with a court, and also those claims, which have been rejected by the court ruling.

Article 65. Insolvency (Bankruptcy) of the Legal Entity


1. The legal entity, which is a commercial organization, with the exception of the state-run enterprise, and the legal entity, operating in the form of a consumer cooperative or of a charity or another kind of the fund, may be recognized by the court decision as insolvent (bankrupt), if it is incapable to satisfy the creditors' claims. The recognition of the legal entity to be bankrupt shall entail its liquidation.
2. The legal entity, which is a commercial organization, and also the legal entity, operating in the form of a consumer cooperative or of a charity or another kind of the fund, may jointly with the creditors adopt the decision on declaring itself to be bankrupt and on its voluntary liquidation.
3. The grounds for the court recognizing the legal entity to be bankrupt or for its declaring itself to be bankrupt, and the procedure for the liquidation of such a legal entity shall be laid down by the Law on the Insolvency (Bankruptcy). The creditors' claims shall be satisfied according to the order of priority, stipulated by Item 1 of Article 64 of the present Code.

_ 2. The Economic Partnerships and Companies


__ 1. The General Provisions


Article 66. The Basic Provisions on the Economic Partnerships and Companies


1. The economic partnerships and companies shall be recognized as commercial organizations with the authorized (joint) capital, divided into the shares (investments) of the founders (the participants). The property, formed at the expense of the founders' (the participants') contributions, the same as that produced and acquired by the economic partnership or by the company in the process of its activity, shall belong to it by the right of ownership. In the cases, stipulated by the present Code, an economic company may be created by one person, who becomes its only participant.
2. The economic partnerships may be established in the form of a general partnership and of a limited (commandite) partnership.
3. The economic partnerships may also be created in the form of a joint-stock company with a limited or a double responsibility.
4. The participants in the general partnerships and the general partners in the limited (commandite) partnerships may be the individual businessmen and (or) the commercial organizations. The participants in the economic companies and the investors in the limited (commandite) partnerships may be the citizens and the legal entities.
The state bodies and the local self-government bodies shall not have the right to be the participants in the economic companies and the investors in the limited partnerships, if not otherwise stipulated by the law.
The institutions, financed by their owners, may be the participants in the economic companies and the investors in the partnerships upon the owner's permission, unless otherwise stipulated by the law.
The law may prohibit or restrict the participation of the individual categories of citizens in the economic partnerships and companies, with the exception of the public joint-stock companies.
5. The economic partnerships and companies may be the founders (the participants) of the other economic partnerships and companies, with the exception of the cases, stipulated by the present Code and by the other laws.
6. Contributed to the property of an economic partnership or of a company may be the money, the securities and the other things, or the property and the other rights that may be evaluated in money. The monetary evaluation of the contribution, made by the participant in the economic company, shall be effected by an agreement between the founders (participants) of the company; in the law-stipulated cases, it shall be subject to an independent expert examination.
7. The economic partnerships, and also the companies with a limited and a double responsibility shall not have the right to issue shares.

Article 67. The Rights and Duties of the Participants in the Economic Partnership or Company


1. The participants in the economic partnership or company shall have the right: - to take part in the management of affairs of the partnership or company, with the exception of the cases, stipulated by Item 2, Article 84 of the present Code and by the Law on the Joint-Stock Companies;
- to get informed on the activity of the partnership or company and to get acquainted with its accounting books and other documentation in conformity with the procedure, laid down by the constituent documents;
- to take part in the distribution of profits;
- to receive, in the case of the partnership's or the company's liquidation, a part of its property, left after the settlements with the creditors, or the cost thereof.
2. The participants in the economic partnership or company shall be obliged: - to make investments in the order, in the amount, in the ways and within the term, stipulated by the constituent documents;
- to keep secret the confidential information on the partnership's or the company's activity.
The participants in the economic partnership or company may also discharge the other duties, stipulated by the constituent documents.

Article 68. Transformation of the Economic Partnerships and Companies


1. The economic partnerships and companies of one type may be transformed into the economic partnerships and companies of another type or into the production cooperatives, by the decision of the general meeting of their participants in conformity with the procedure, stipulated by the present Code.
2. In case the partnership is transformed into a company, each general partner, who has become the participant (the share-holder) of the company, shall bear in the course of two years the subsidiary responsibility with his entire property by the obligations, which have passed to the company from the partnership. The alienation by the former partner of the participation shares (shares) in his possession shall not exempt him from such responsibility. The rules, expatiated in the present Item, shall be correspondingly applied in case the partnership is transformed into a production cooperative.

__ 2. The General Partnership


Article 69. The Basic Provisions on the General Partnership


1. The partnership, whose participants (general partners) are engaged, in conformity with the agreement signed between them, in business activities on behalf of the partnership and bear responsibility by its obligations with the property in their possession, shall be recognized as the general partnership.
2. The person shall have the right to be the participant of only one general partnership.
3. The trade name of the general partnership shall contain either the names (the titles) of all its participants and the words "general partnership", or the name (the title) of one or of several of its participants, with the words "and Co." and "general partnership" to be added.

Article 70. The Constituent Agreement of the General Partnership


1. The general partnership shall be created and shall operate on the ground of a constituent agreement. The constituent agreement shall be signed by all its participants.
2. The constituent agreement of the general partnership shall contain, in addition to the information, stipulated in Item 2, Article 52 of the present Code, the terms for the amount and structure of the joint capital of the partnership; on the amount and the procedure for changing the share of each of the participants in the joint capital; on the amount, the structure, the term and the order, set for their making investments; and on the liability for the violation of the duties, involved in making such investments.

Article 71. Management in the General Partnership


1. The activity of the general partnership shall be managed by the general agreement of all its participants. The constituent agreement of the partnership may also indicate the cases, when the decision shall be adopted by the majority of the participants' votes.
2. Every participant of the general partnership shall have one vote, if the constituent agreement does not stipulate a different order for the definition of its participants' votes.
3. Every participant of the partnership shall have the right to get acquainted with the entire documentation on the business management, regardless of whether he has been authorized to perform the partnership's business management. The renouncement of this right or its restriction, including by the agreement of the partnership's participants, shall be insignificant.

Article 72. Business Management of the General Partnership


1. Every participant of the general partnership shall have the right to operate on behalf of the partnership, unless the constituent agreement has laid it down that all its participants shall effect the business management jointly, or unless the business management has been entrusted to the individual participants. If the partnership's participants effect a joint business management of the partnership, to make any one deal, the consent of all the participants of the partnership shall be required.
If the business management of the partnership has been entrusted by its participants to one or to several persons from among them, the other participants, who are going to make a deal on behalf of the partnership, shall receive a warrant from the participant (the participants), to whom the business management of the partnership has been entrusted.
The partnership shall not have the right to refer, in its relations with the third persons, to the provisions of the constituent agreement, restricting the powers of the partnership participants, with the exception of the cases, when the partnership can prove that at the moment of effecting the deal, the third person was aware, or should have been aware, of the partnership participant's having no right to act on behalf of the partnership.
2. The powers for the management of the partnership affairs, granted to one or to several of its participants, may be terminated by the court on the demand of one or of several other partnership participants, if there are serious grounds for this, in particular, if the authorized person (persons) has (have) committed a gross violation of their duties, or if he (they) have proved to be incapable of a wise management of the affairs. The necessary changes shall be introduced into the constituent agreement of the partnership on the grounds of the court decision.

Article 73. The Duties of the Participant of the General Partnership


1. The participant of the general partnership shall take part in its activities in conformity with the terms of the constituent agreement.
2. The participant of the general partnership shall put at least a half of his contribution into the partnership's joint capital by the moment of its registration. The remaining part shall be put in by the participant within the term, fixed by the constituent agreement. In case he fails to discharge the said duty, the participant shall be obliged to pay to the partnership an annual 10 per cent from the underpaid part of the contribution and to recompense the inflicted losses, unless the other consequences have been stipulated by the constituent agreement.
3. The participant in a general partnership shall not have the right to make on his own behalf and in his own interest, or in the interest of the third persons, without the consent of the rest of the participants, the deals, which are similar to those that are the object of the partnership's activity. If this rule is violated, the partnership shall have the right to demand, according to his choice, either that the given participant recompense the losses he has caused to the partnership, or that the entire profit he has derived by such deals be transferred to the partnership.

Article 74. Distribution of the Profits and Losses of the General Partnership


1. The profits and losses of the general partnership shall be distributed among its participants proportionately to their shares in the joint capital, if not otherwise stipulated by the constituent agreement or by another agreement, signed by the participants. No agreement on the exclusion of any partnership participants from the distribution of the profits and losses shall be admitted.
2. If, as a result of the losses the partnership has sustained, the value of its net assets shrinks to less than the amount of its joint capital, the profit, derived by the partnership, shall not be distributed among its participants until the value of its net assets exceeds the amount of the joint capital.

Article 75. Responsibility of the Participants of the General Partnership by Its Obligations


1. The participants of the general partnership shall jointly bear the subsidiary responsibility by the partnership's obligations with their entire property.
2. The participant of the general partnership, who is not its founder, shall be answerable on a par with the other participants by the obligations, which have arisen before the date of his joining the partnership. The participant, who has withdrawn from the partnership, shall be answerable by the partnership's obligations, which have arisen before the moment of his retirement, on a par with the rest of the participants in the course of 2 years from the date of the approval of the accounting report on the activity of the partnership over the year, during which he has retired from the partnership.
3. The agreement of the partnership participants on the restriction or elimination of the responsibility, stipulated in the present Article, shall be insignificant.

Article 76. The Change of the General Partnership's Membership


1. In case of the withdrawal or death of any one of the participants from the general partnership, the recognition of one of them as missing, legally incapable or partially capable, or as insolvent (bankrupt), or if the re-organizational procedures are instituted against one of the participants by the court ruling, or if a legal entity, which is a member of the partnership, is liquidated or the creditor of one of the participants turns the exaction of his debt onto the part of the property, amounting to the participant's share in the partnership's joint capital, the partnership may continue its activity, if this is stipulated by the constituent agreement of the partnership or by an agreement, signed between the rest of its participants.
2. The participants of the general partnership shall have the right to demand through the court that a certain participant be expelled from the partnership in conformity with the unanimous decision of the remaining participants and in the face of the serious grounds, in particular, on account of his gross violation of his duties or of his proving to be incapable of a wise management of affairs.

Article 77. The Participant's Withdrawal from the General Partnership


1. The participant of the general partnership shall have the right to retire from it after having declared his refusal to take part in it. The participant shall declare his refusal to take part in the general partnership, created without indicating the term of operation, not less than 6 months in advance before his actual withdrawal from the partnership. The refusal to take part in the general partnership, created for a certain term, before the expiry of the said term, shall be admitted only on the valid grounds.
2. The agreement on the renouncement of the right to withdraw from the partnership, signed between the partnership participants, shall be insignificant.

Article 78. The Consequences of the Participant's Withdrawal from the General Partnership


1. The participant, who has retired from the general partnership, shall be paid out the cost of the share of the partnership's property, corresponding to this participant's share in the joint capital, if not otherwise stipulated by the constituent agreement. By an agreement reached between the retiring participant and the rest of the participants, the payment out of the cost of the property may be replaced by the transfer of the property in kind. The part of the partnership's property due to the retiring participant, or its cost shall be defined by the balance, which shall be compiled by the moment of his withdrawal, with the exception of the cases, stipulated by Article 80 of the present Code.
2. In case of the death of the participant of the general partnership, his heir may join the general partnership only upon the consent of all the other participants. The legal entity - the successor of the reorganized legal entity, which was a member of the general partnership, shall have the right to join the general partnership upon the consent of its other participants, if not otherwise stipulated by the partnership's constituent agreement.
The settlements with the heir (successor), who has not joined the partnership, shall be effected in conformity with Item 1 of the present Article. The heir (successor) of the participant of the general partnership shall bear responsibility by the partnership's obligations to the third persons, by which, in conformity with Item 2 of Article 75 of the present Code, the departed participant was answerable, within the amount of the property of the departed participant, passed to him.
3. In the case of one of the participants retiring from the partnership, the shares of the remaining participants in the partnership's joint capital shall correspondingly increase, unless otherwise stipulated by the constituent documents.

Article 79. Transfer of the Participant's Share in the General Partnership's Joint Capital


The participant of the general partnership shall have the right, with the consent of the rest of its participants, to transfer his share in the joint capital, or a part thereof, to another participant of the partnership or to the third person.
When the share (a part of the share) is transferred to another person, the full rights or the corresponding part thereof, formerly possessed by the participant, who has effected the transfer of his share (a part of the share), shall also pass to the former. The person, to whom the share (a part of the share) has been transferred, shall bear responsibility by the partnership's obligations in conformity with the procedure, laid down by first paragraph of Item 2 of Article 75 of the present Code.
The transfer of his entire share to another person, effected by the participant of the partnership, shall entail the termination of his participation in the partnership and also the consequences, stipulated by Item 2 of Article 75 of the present Code.

Article 80. Turning the Penalty onto the Share of the Participant in the Joint Capital of the General Partnership


The turning of the penalty onto the participant's share in the joint capital of the partnership by the participant's own debts shall be admissible only if his own property proves to be insufficient to cover his debts. The creditors of such a participant shall have the right to demand from the general partnership that it separate the part of the partnership's property that would correspond to the debtor's share in the joint capital, so that the penalty may be turned onto this property. The part of the partnership property, subject to being singled out, or the cost thereof, shall be defined by the balance, compiled by the moment when the creditors file the claim for it to be separated.
The turning of the penalty onto the property, which corresponds to the participant's share in the joint capital of the general partnership, shall signify the termination of his participation in the partnership and shall also entail the consequences, stipulated by Paragraph 2 of Item 2 of Article 75 of the present Code.

Article 81. Liquidation of the General Partnership


The general partnership shall be liquidated on the grounds, indicated in Article 61 of the present Code, and also in case only one participant is left in it. Such a participant shall have the right, in the course of 6 months from the moment when he has become the only participant of the partnership, to transform such a partnership into an economic company in conformity with the procedure, laid down by the present Code.
The general partnership shall also be liquidated in the cases, stipulated in Item 1 of Article 76 of the present Code, unless it has been stipulated by the constituent documents of the partnership, or by an agreement, signed between the remaining participants, that the partnership shall continue its activity.

__ 3. The Limited Partnership


Article 82. The Basic Provisions for the Limited Partnership


1. The limited (commandite) partnership shall be recognized as such a partnership, in which, alongside the participants, engaged in the performance of the business activity on behalf of the partnership and answerable by the obligations of the partnership with their property (the general partners), there is (are) also one or several participants-investors (commanditaires), who bear the risk of the losses in connection with the partnership's activity within the amount of their investments and who do not take part in the performance of the partnership's business activity.
2. The position of the general partners in the commandite partnership and their liability by the partnership's obligations shall be defined by the rules on the participants of the general partnership, laid down by the present Code.
3. The person shall be the general partner only in one commandite partnership. The participant of the general partnership shall not be the general partner in the commandite partnership.
4. The trade name of the commandite partnership shall contain either the names (the titles) of all its general partners and the words "limited partnership" or "commandite partnership", or the name (the title) of at least one of its general partners and the words "and Co.", and also the words "limited partnership" or "commandite partnership". If into the trade name of the partnership is included the name of the investor, this investor shall become the general partner.
5. Toward the limited (commandite) partnership shall be applied the rules on the general partnership, laid down in the present Code, so far as this does not contradict the rules of the present Code on the limited partnership.

Article 83. The Constituent Agreement of the Limited Partnership


1. The limited partnership shall be created and shall operate on the ground of the constituent agreement. The constituent agreement shall be signed by all the general partners.
2. The constituent agreement of the limited partnership shall contain, in addition to the information, indicated in Item 2, Article 52 of the present Code, the terms on the amount and structure of the joint capital of the partnership; on the amount of and the procedure for changing the shares of each of the general partners in the joint capital; on the amount, the structure, the term and the order of their making investments, their liability for violating the duties, involved in making the investments; on the aggregate amount of the contributions, made by the investors.

Article 84. Administrative and Business Management in the Limited Partnership


1. The activity of the limited partnership shall be led by its general partners. The procedure for the administrative and business management of such a partnership by its general partners shall be established according to the rules on the general partnership, laid down in the present Code.
2. The investors shall not have the right to take part in the administrative and business management of the limited partnership or to come out on its behalf other than by a warrant. Neither shall they have the right to dispute the actions of the general partners involved in the administrative and business management of the partnership.

Article 85. The Rights and Duties of the Investor of the Limited Partnership


1. The investor of the limited partnership shall be obliged to make an investment into the joint capital. The fact of his making the investment shall be confirmed by the participation certificate, issued to the investor by the partnership.
2. The investor of the limited partnership shall have the right: 1) to receive a part of the partnership's profit, due for his share in the joint capital, in conformity with the procedure, stipulated by the constituent agreement;
2) to get acquainted with the partnership's annual reports and balances;
3) on the expiry of the fiscal year, to retire from the partnership and to withdraw his investment in conformity with the procedure, laid down by the constituent agreement;
4) to transfer his share in the joint capital or a part thereof to another investor or to a third person. The investors shall be entitled to the preferential right, in comparison with the third persons, to buy the share (a part thereof) as applied to the terms and order, stipulated by Item 2 of Article 93 of the present Code. The transfer by the investor of his entire share to another person shall amount to the termination of his membership in the partnership.
The constituent agreement of the limited partnership may also stipulate other rights of the investor.

Article 86. Liquidation of the Limited Partnership


1. The limited partnership shall be liquidated in case all the investors have retired from it. However, the general partners shall have the right, instead of the liquidation of the limited partnership, to transform it into a general partnership. The limited partnership shall also be liquidated on the grounds, stipulated for the liquidation of the general partnership (Article 81). However, the limited partnership shall continue operation, if at least one general partner and one investor are left in it.
2. In case of the liquidation of the limited partnership, including in the case of its bankruptcy, the investors shall have the preferential right before the general partners to get back their investments from the property of the partnership, left after the creditors' claims have been satisfied. The property of the partnership, left after this, shall be distributed among the general partners and the investors proportionately to their shares in the partnership's joint capital, if not otherwise stipulated by the constituent agreement or by an agreement between the general partners and the investors.

__ 4. The Limited Liability Company


Article 87. The Basic Provisions on the Limited Liability Company


1. The limited liability company shall be recognized as the company, established by one or by several persons, whose authorized capital is divided into the shares, the size of which is stipulated by the constituent documents; the participants of the limited liability company shall not be answerable by its obligations and shall bear the risk of the losses in connection with the company's activity within the cost of the contributions they have made. The participants of the company, who have not made their contributions in full volume, shall bear joint responsibility by its obligations within the cost of the underpaid part of the contribution of each of the participants.
2. The trade name of the limited liability company shall contain the name of the company and the words, "limited liability".
3. The legal position of the limited liability company, and the rights and duties of its participants shall be defined by the present Code and by the Law on the Limited Liability Companies. The peculiarities of the legal status of the credit organizations set up in the form of a limited liability company, the rights and duties of the stakeholders thereof shall also be provided by the laws governing the activities of credit organizations.

Article 88. Participants in the Limited Liability Company


1. The number of participants in the limited liability company shall not exceed the limit, established by the Law on the Limited Liability Companies. Otherwise it shall be subject to transformation into a joint-stock company in the course of a year; on the expiry of this term, if the number of its participants has not been reduced to the law-established limit, it shall be liquidated by the court decision.
2. The limited liability company shall not include as a single participant another economic company, consisting of a single person.

Article 89. Constituent Documents of the Limited Liability Company


1. The constituent documents of the limited liability company shall be the constituent agreement, signed by its participants, and the Rules, approved by them. If the company is set up by a single person, its constituent document shall be the Rules.
2. The constituent documents of the limited liability company, in addition to the information, stipulated in Item 2 of Article 52 of the present Code, shall contain the terms on the amount of the company's capital; on the size of the shares of every participant; on the size, the structure, the term and the procedure for their making the investments, and on their responsibility for violating their duties, involved in the making of the investments; on the structure and the competence of the public management bodies and on the order of their adopting decisions, including on the issues, the decisions on which shall be adopted unanimously or by a qualified majority of votes; and also other information, stipulated by the Law on the Limited Liability Companies.

Article 90. Authorized Capital of the Limited Liability Company


1. The authorized capital of the limited liability company shall be comprised of the cost of its participants' contributions. The authorized capital of the limited liability company shall determine the minimum size of the company's property, guaranteeing the interests of its creditors. The authorized capital of the limited liability company shall not be less than the amount, stipulated by the Law on the Limited Liability Companies.
2. It is prohibited to relieve a stakeholder of the limited liability company from the obligation to make a contribution in the company's authorized capital, including but not limited to, accepting for offset claims to the company, excluding the cases provided by the law.
3. By the moment of registration, not less than a half of the authorized capital of the limited liability company shall be paid up by its participants. The remaining underpaid part of the authorized capital shall be subject to payment by its participants in the course of the first year of the company's operation. In case of violating this obligation, the company shall either make a statement on the reduction of its authorized capital and register its reduction in conformity with the established procedure, or cease its activity by way of liquidation.
4. If, on the expiry of the second or of every subsequent fiscal year, the cost of the net assets of the limited liability company proves to be less than its authorized capital, the company shall be obliged to make a statement on the reduction of its authorized capital and to register its reduction in conformity with the established procedure. In case the cost of the company's said assets falls below the law-stipulated minimum size of the authorized capital, the company shall be subject to liquidation.
5. The reduction of the authorized capital of the limited liability company shall be admitted after all its creditors have been notified to this effect. In this case, the latter shall have the right to demand that the corresponding obligations of the company shall be discharged in advance and that their losses be recompensed. The rights and duties of the creditors of credit organizations set up on the form of a limited liability company shall also be governed by the laws governing the activities of credit organizations.
6. The augmentation of the company's authorized capital shall be admitted after all its participants have made their investments in full volume.

Article 91. Administration in the Limited Liability Company


1. The higher body of the limited liability company shall be the general meeting of its participants. An executive body (collegiate and/or single-man) shall be set up in the limited liability company, which shall perform the current direction of its activity and which shall report to the general meeting of its participants. The single-man management body of the company may also be elected not from among its participants.
2. The jurisdiction of the company's management bodies and the procedure, laid down for its adoption of decisions and coming out on behalf of the company, shall be defined in conformity with the present Code and with the Law on the Limited Liability Companies.
3. To the exclusive jurisdiction of the general meeting of the limited liability company shall be referred: 1) the amendment of the company's Rules and the change of the size of its authorized capital;
2) the setting up of the company's executive bodies and an advanced termination of their powers;
3) the approval of the company's annual reports and accounting balances and the distribution of its profits and losses;
4) the adoption of the decision on the company's reorganization or liquidation;
5) the election of the company's auditing committee (the auditor).
The settlement of other questions may also be referred to the exclusive jurisdiction of the general meeting of the company's partners by Law on the Limited Liability Companies.
The issues, referred to the exclusive jurisdiction of the general meeting of the company's participants, shall not be passed by it for adopting decisions to the company's executive body.
4. For the purposes of checking up and confirming the correctness of the annual financial reports of the limited liability company, it shall have the right annually to draw on the services of a certified auditor, whose material interests are not involved in the company or connected with its participants (the external audit). The audit examination of the company's annual financial reports may also be carried out on the demand of any of its participants. The procedure for carrying out the audit examinations of the company's activities shall be defined by the law and by the company's Rules.
5. The publication by the company of the results of the management of its activity (the public reports) shall not be required, with the exception of the cases, stipulated by the Law on the Limited Liability Companies.

Article 92. Reorganization and Liquidation of the Limited Liability Company


1. The limited liability company may be reorganized or liquidated voluntarily by a unanimous consent of its participants. The other grounds for the reorganization and liquidation of the limited liability company and the procedure for its reorganization and liquidation shall be defined by the present Code and by the other laws.
2. The limited liability company shall have the right to transform itself into a joint-stock company or into a production cooperative.

Article 93. Transfer of the Share in the Authorized Capital of the Limited Liability Company to a Third Person


1. The participant of the limited liability company shall have the right to sell or cede in another manner his share in the company's authorized capital or a part thereof to one or several participants of the given company.
2. The alienation by the participant of the company of his share (a part thereof) to third persons shall be admitted, unless otherwise stipulated by the company's Rules. The participants of the company shall enjoy the right of priority in acquiring the share of its participant (or a part thereof) proportionately to the size of their own shares, unless the other order for exercising this right is stipulated by the company's Rules or by an agreement between its participants. In case the company's participants do not avail themselves of their preferential right within a month's term from the date of notification or within the other term, stipulated by the company's Rules or by the agreement between its participants, the participant's share may be alienated in favour of a third person.
3. If, in conformity with the Rules of the limited liability company, the alienation of the participant's share (a part thereof) to third persons is inadmissible, while its other participants refuse to acquire it, the company shall be obliged to pay to the participant in question the actual cost of, or to give him in kind, the amount of property, which would correspond to such cost.
4. The share of the participant of the limited liability company may be alienated up to its full payment only in that part of it, which has already been paid.
5. In the participant's share (a part thereof) has been acquired by the limited liability company itself, it shall be obliged to realize it to its other participants or to third persons within the term and in conformity with the order, stipulated by the Law on the Limited Liability Companies and by the company's constituent documents, or to reduce its authorized capital in conformity with Items 4 and 5 of Article 90 of the present Code.
6. The shares of the authorized capital of the limited liability company shall be transferred to the citizens' heirs and to the legal successors of the legal entities, which have been the company's participants, unless the constituent documents of the company stipulate that such transfer shall be admitted only upon the consent of the rest of the company's participants. The refusal to grant the consent to the transfer of the share shall entail the obligation of the company to pay up to the heirs (the legal successors) of the participant the actual cost of his share, or to give them in kind the property, that would amount to such cost, in conformity with the order and on the terms, stipulated by the Law on the Limited Liability Companies and by the company's constituent documents.

Article 94. Withdrawal of the Participant of the Limited Liability Company from the Company


The participant of the limited liability company shall have the right to retire from the company regardless of the consent of its other participants. In this case, he shall be entitled to being paid up the cost of the part of the property, corresponding to the size of his share in the company's authorized capital in the order, in the manner and within the term, stipulated by the Law on the Limited liability Companies and by the company's constituent documents.

__ 5. The Double Liability Company


Article 95. The Basic Provisions on the Double Liability Companies


1. The double liability company shall be recognized as the company, established by one or by several persons, whose capital is divided into the shares of the size, defined by the company's constituent documents; the participants of such a company shall bear in common the subsidiary liability by its obligations with their property in the amount, divisible by the cost of their contributions, equal for all of them, which shall be defined by the company's constituent documents. In case of the bankruptcy of one of the participants, his liability by the company's obligations shall be distributed among the rest of the participants proportionately to their contributions, unless the other order for the liability sharing is stipulated by the company's constituent documents.
2. The trade name of the double liability company shall contain the name of the company and the words " double liability".
3. Toward the double liability company shall be applied the rules of the present Code on the limited liability company, unless otherwise stipulated by the present Article.

__ 6. The Joint-Stock Company


Article 96. The Basic Provisions on the Joint-Stock Company


1. The joint-stock company shall be recognized as the company, whose authorized capital is divided into a definite number of shares; the participants of the joint-stock company (the share-holders) shall not be answerable by its obligations and shall take the risks, involved in the losses in connection with its activity, within the cost of the shares in their possession. The share-holders, who have not paid up their shares in full, shall bear the joint responsibility by the obligations of the joint-stock company within the unpaid part of the cost of the shares in their possession.
2. The trade name of the joint-stock company shall contain its name and the indication of the fact that the company is a joint-stock one.
3. The legal status of the joint-stock company and the rights and duties of the share-holders shall be defined in conformity with the present Code and with the Law on the Joint-Stock Companies. The specifics of the legal status of the joint-stock companies, founded by way of the privatization of the state-run and municipal enterprises, shall be also defined by the laws and by the other legal acts on the privatization of these enterprises.
The peculiarities of the legal status of the credit organizations set up in the form of a joint-stock company, the rights and duties of the shareholders thereof shall also be provided by the laws governing the activities of credit organizations.

Article 97. The Open and Closed Joint-Stock Companies


1. The joint-stock company, whose participants may alienate the shares in their possession without the consent of the other share-holders, shall be recognized as an open joint-stock company. This kind of the joint-stock company shall have the right to carry out a public subscription for the shares it issues and to sell them freely on the terms, fixed by the law and by the other legal acts. The open joint-stock company shall be obliged every year to publish for general information an annual report, an accounting balance and also an account on the profits and the losses.
2. The joint-stock company, whose shares are distributed only among its founders or within another circle of persons, defined in advance, shall be recognized as a closed joint-stock company. Such a company shall not have the right to carry out a public subscription for the shares it issues or to offer them in any other way for acquisition to an unlimited circle of persons. The share-holders of the closed joint-stock company shall enjoy a preferential right to acquire the shares offered for sale by the other share-holders of this company.
The number of the participants of the closed joint-stock company shall not exceed that fixed by the Law on the Joint-Stock Companies; otherwise, it shall be subject to the transformation into an open joint-stock company in the course of one year, and upon the expiry of this term - to the liquidation by the court ruling, if the number of its participants has not been reduced to the law-stipulated limit.
In the cases, stipulated by the Law on the Joint-Stock Companies, the closed joint-stock company may be obliged to publish for general information the documents, indicated in Item 1 of the present Article.

Article 98. The Founding of the Joint-Stock Company


1. The founders of the joint-stock company shall sign between themselves an agreement, defining the order of their performing a joint activity, involved in the establishment of the company,the size of its authorized capital, the categories of the shares it is going to issue and the way of their distribution, and also the other terms, stipulated by the Law on the Joint-Stock Companies. The agreement on founding a joint-stock company shall be made out in written form.
2. The founders of the joint-stock company shall bear a joint responsibility by the obligations, which have arisen before the company's registration. The company shall bear responsibility by the founders' obligations, related to its creation, only in case their actions have been subsequently approved by the general meeting of the share-holders.
3. The constituent documents of the joint-stock company shall be its Rules, approved by the founders. The Rules of the joint-stock company, in addition to the information, specified in Item 2 of Article 52 of the present Code, shall contain the terms on the categories of the shares, issued by the company, on their face value and number; on the size of the company's authorized capital; on the rights of the share-holders; on the structure and the jurisdiction of the company's management bodies and on the procedure, laid down for their decision-making, including on the issues, on which decisions shall be adopted unanimously or by a qualified majority of votes. The Rules of the joint-stock company shall also contain other information, stipulated by the Law on the Joint-Stock Companies.
4. The procedure for the performance of the other actions, involved in founding a joint-stock company, including the jurisdiction of the constituent assembly, shall be defined by the Law on the Joint-Stock Companies.
5. The specifics of the creation of the joint-stock companies as a result of the privatization of the state-run and the municipal enterprises shall be defined by the laws and by the other legal acts on the privatization of these enterprises.
6. The joint-stock company may be founded by one person, or it may consist of one person in case a single share-holder acquires all the company's shares. The data to this effect shall be contained in the company's Rules, shall be registered and published for general information. The joint-stock company shall not have the right to enlist another economic company, consisting of a single person, as its only participant.

Article 99. The Authorized Capital of the Joint-Stock Company


1. The authorized capital of the joint-stock company shall be comprised of the face value of the company's shares, acquired by the share-holders. The company's authorized capital shall define the minimum amount of the company's property, guaranteeing the interests of its creditors. It shall not be less than it is stipulated by the Law on the Joint-Stock Companies.
2. The share-holder shall not be exempted from the duty to pay for the company's shares, including the exemption from this duty by taking into account his claims against the company.
3. The public subscription for the shares of the joint-stock company shall not be admitted until the authorized capital is paid up in full. When founding a joint-stock company, all its shares shall be distributed among the founders.
4. If upon the expiry of the second and of each of the next fiscal years the cost of the company's net assets proves to be less than its authorized capital, the company shall be obliged to declare and to register, in conformity with the established procedure, the reduction of its authorized capital. If the cost of the said company's assets falls below the minimum size of the authorized capital, fixed by the law (Item 1 of the present Article), the company shall be subject to liquidation.
5. The law or the Rules of the company may fix the limits upon the number, the total face value of its shares or the maximum number of the votes in the possession of a single share-holder.

Article 100. Augmentation of the Capital of the Joint-Stock Company


1. The joint-stock company shall have the right, by the decision of the general meeting of the share-holders, to inflate its authorized capital by raising the face value of its shares or by issuing additional shares.
2. The augmentation of the authorized capital of the joint-stock company shall be admitted after it has been paid up in full. The augmentation of the company's authorized capital for the purpose of covering its losses shall not be admitted.
3. In the cases, stipulated by the Law on the Joint-Stock Companies, the company's Rules may establish the preferential right of the share-holders, possessing ordinary (common) shares or the other kind of the voting shares, for acquiring the shares, additionally issued by the company.

Article 101. Reduction of the Authorized Capital of the Joint-Stock Company


1. The joint-stock company shall have the right, by the decision of the general meeting of the share-holders, to deflate its authorized capital by cutting down the face value of its shares, or by buying up a certain number of the shares in order to reduce their total number. The deflation of the company's authorized capital shall be admitted after the notification of all its creditors in conformity with the procedure, laid down by the Law on the Joint-Stock Companies. The creditors of the company shall have the right to demand that the company terminate in advance or execute its corresponding obligations and recompense their losses.
The rights and duties of the creditors of credit organizations set up in the form of a joint-stock company shall also be provided by the laws governing the activities of credit organizations.
2. The reduction of the authorized capital of the joint-stock company by acquiring and paying off a part of the shares shall be admitted in case this possibility has been stipulated in the company's Rules.

Article 102. Restrictions on the Issue of Securities and on the Payment of Dividends of the Joint-Stock Company


1. The proportion of the preference shares in the total volume of the authorized capital of the joint-stock company shall not exceed 25 per cent.
2. The joint-stock company shall have the right to issue bonds to the sum, not exceeding the size of the authorized capital or the amount of the security, provided for this purpose by the third persons, after the authorized capital has been paid up in full. In the absence of the security, the bond issue shall not be admitted until the third year of the joint-stock company's existence and on condition that by this time its two annual balances have been properly approved.
3. The joint-stock company shall not have the right to declare and pay dividends: - until the entire authorized capital is paid up in full;
- if the cost of the net assets of the joint-stock company is less than its authorized capital and its reserve fund, or if it will fall below their size as a result of the payment of the dividends.

Article 103. Management in the Joint-Stock Company


1. The higher management body of the joint-stock company shall be the general meeting of its share-holders. Within the exclusive jurisdiction of the general meeting of the share-holders shall be placed:
1) the amendment of the company's Rules, including the change of the size of its authorized capital;
2) the election of the members of the board of directors (the supervisory council) and of the auditing commission (the auditor) of the company, and the termination of their powers before the expiry of their term of office;
3) the formation of the company's executive bodies and the cessation of their powers before the expiry of their term of office, unless the company's Rules refer the resolution of these issues to the jurisdiction of the board of directors (the supervisory council);
4) the approval of the annual reports, the accounting balances and the accounts of the company's profits and losses, and the distribution of its profits and losses;
5) the adoption of the decision on the company's reorganization or liquidation.
The Law on the Joint-Stock Companies may also refer to the exclusive jurisdiction of the general meeting of the share-holders the resolution of the other issues.
The issues, placed by the law within the exclusive jurisdiction of the general meeting of the share-holders, shall not be turned over by it for resolution to the company's executive bodies.
2. In the company with over 50 share-holders, a board of directors (a supervisory council) shall be established. In case of the establishment of the board of directors (the supervisory council), the company's Rules, in conformity with the Law on the Joint-Stock Companies, shall delineate the scope of its exclusive jurisdiction. The issues, placed by the Rules within the exclusive jurisdiction of the board of directors (the supervisory council), shall not be turned over by it for resolution to the company's executive bodies.
3. The company's executive body may be collegiate (the board, the directorate) and (or) single-man (the director, the director-general). It shall effect the current management of the company's activity and shall report to the board of directors (to the supervisory council) and to the general meeting of the share-holders. To the jurisdiction of the company's executive body shall be referred the resolution of all issues, which are not placed within the exclusive jurisdiction of the other management bodies of the company, delineated by the law or by the company's Rules.
By the decision of the general meeting of the share-holders, the powers of the company's executive body may be turned over by an agreement to another commercial organization, or to an individual businessman (manager).
4. The jurisdiction of the management bodies of the joint-stock company and the procedure for their adopting decisions and acting on behalf of the company shall be defined in conformity with the present Code by the Law on the Joint-Stock Companies and by the company's Rules.
5. The joint-stock company, which has been obliged, in conformity with the present Code or with the Law on the Joint-Stock Companies, to publish for general information the documents, indicated in Item 1 of Article 97 of the present Code, shall annually draw upon the services of a professional auditor, not bound up with the company or with its participants by property interests, for checking upon and confirming the correctness of the company's annual financial reports. The auditor's examination of the activity of the joint-stock company, including of the company, which has not been obliged to publish for general information the said documents, shall be carried out at any time upon the demand of the share-holders, whose aggregate share of the authorized capital comprises 10 or more per cent.
The procedure for carrying out auditor's examinations of the activity of the joint-stock company shall be defined by the law and by the company's Rules.

Article 104. Reorganization and Liquidation of the Joint-Stock Company


1. The joint-stock company may be reorganized or liquidated voluntarily, by the decision of the general meeting of the share-holders. The other grounds and the procedure for the reorganization and liquidation of the joint-stock company shall be stipulated by the present Code and by the other laws.
2. The joint-stock company shall have the right to transform itself into a limited liability company or into a production cooperative and also to a non-commercial organization in compliance with the law.

__ 7. The Subsidiary and Dependent Companies


Article 105. The Subsidiary Economic Company


1. The economic company shall be recognized as subsidiary, if the other (the parent) economic company or partnership, on account of its prevalent participation in its authorized capital, or in conformity with the agreement, signed between them, or in any other way, can exert a decisive impact on the decisions, adopted by such a company.
2. The subsidiary company shall not be answerable by the debts of the parent company (the partnership). The parent company (the partnership), which has the right to issue to the subsidiary company, including by an agreement signed with it, the instructions that are obligatory for it, shall bear joint responsibility with the subsidiary company by the deals, effected by the latter in execution of such instructions.
In case of the insolvency (the bankruptcy) of the subsidiary company through the fault of the parent company (the partnership), the latter shall bear the subsidiary responsibility by its debts.
3. The participants (the share-holders) of the subsidiary company shall have the right to claim that the losses, caused to the subsidiary company through the fault of the parent company (the partnership), shall be recompensed to them by the latter, unless otherwise stipulated by the laws on the economic companies.

Article 106. The Dependent Economic Company


1. The economic company shall be recognized as dependent, if the other (the prevalent, the participant) company possesses over 20 per cent of the voting shares of the joint-stock company or over 20 per cent of the authorized capital of the limited liability company.
2. The economic company, which has acquired over 20 per cent of the voting shares of the joint-stock company, or over 20 per cent of the authorized capital of the limited liability company, shall be obliged to publish information to this effect without delay and in conformity with the procedure, stipulated by the laws on the economic companies.
3. The limits of the mutual participation of the economic companies in one another's authorized capitals and the number of the votes that one such company may use at the general meeting of the participants or of the share-holders of another company, shall be defined by the law.

_ 3. The Production Cooperatives


Article 107. The Concept of the Production Cooperative


1. The production cooperative (the artel) shall be recognized as a voluntary association of the citizens, based on the membership and set up for the purpose of the joint production or of the other kind of the economic activity (the manufacture, processing and sale of the industrial, farming and the other kind of produce, the performance of works, the trade, the rendering of everyday and other services), based on their personal labour and on the other kind of participation and on the putting together by its members (participants) of the property participation shares. The law and the constituent documents of the production cooperative may stipulate the participation in its activity of the legal entities. The production cooperative shall be a commercial organization.
2. The members of the production cooperative shall bear the subsidiary responsibility by the cooperative's obligations in the amount and in conformity with the procedure, stipulated by the Law on the Production Cooperatives and by the Rules of the production cooperative.
3. The trade name of the cooperative shall contain its name and the words "production cooperative" or "artel".
4. The legal status of the production cooperatives and the rights and duties of their members shall be defined by the laws on the production cooperatives in conformity with the present Code.

Article 108. Formation of the Production Cooperative


1. The constituent document of the production cooperative shall be its Rules, endorsed by the general meeting of its members.
2. The Rules of the production cooperative shall contain, in addition to the data, indicated in Item 2 of Article 52 of the present Code, the terms for the size of the share contributions to be made by the cooperative members; for the structure and the order of making the share contributions by the cooperative members and for their liability in case of violating the obligation on making the share contributions; for the nature and the order of the labour participation by its members in the cooperative's activity and for their liability in case of violating the obligation on the personal labour participation; for the order of the distribution of the cooperative's profits and losses; for the size of and the terms for the subsidiary liability of its members by the cooperative's debts; for the structure and the scope of jurisdiction of the cooperative's management bodies and the order of their decision-making, including on the issues, the decisions on which shall be adopted unanimously or by a qualified majority of votes.
3. The number of cooperative members shall be not less than 5 persons.

Article 109. The Property of the Production Cooperative


1. The property in the possession of the production cooperative shall be divided into the shares of its members in conformity with the Rules of the cooperative. The Rules of the cooperative may decree that a certain part of the property in the possession of the cooperative shall be comprised of the indivisible funds, which shall be used for the purposes, defined by the Rules.
The decision on the setting up of the indivisible funds shall be adopted by the cooperative members unanimously, unless otherwise stipulated by the Rules of the cooperative.
2. The member of the cooperative shall be obliged to put in, by the moment of the cooperative's registration, not less than 10 per cent of his share contributions; the rest shall be paid up in the course of one year from the moment of the cooperative's registration.
3. The cooperative shall not have the right to issue shares.
4. The profit of the cooperative shall be distributed among its members in accordance with their labour input, unless otherwise stipulated by the law and by the Rules of the cooperative. The property, left after the cooperative's liquidation and the satisfaction of the claims of its creditors, shall be distributed in the same order.

Article 110. Management in the Production Cooperatives


1. The higher management body of the cooperative shall be the general meeting of its members. In the cooperative with over 50 members, a supervisory council may be established, which shall exert control over the activity of the cooperative's executive body.
The cooperative's executive bodies shall be its management board and (or) its chairman. They shall effect the current leadership of the cooperative's activity and shall report to the supervisory council and to the general meeting of the cooperative members.
Only the members of the cooperative shall have the right to be the members of the supervisory council and to fill the post of the chairman of the cooperative. The member of the cooperative shall not be simultaneously a member of the supervisory council and a member of the management board or the chairman of the cooperative.
2. The jurisdiction of the management bodies of the cooperative and the order for their decision-making shall be defined by the law and by the Rules of the cooperative.
3. The following functions shall be placed within the exclusive jurisdiction of the general meeting of the members of the cooperative: 1) the amendment of the Rules of the cooperative;
2) the establishment of the supervisory council and the termination of the powers of its members, and also the establishment and the termination of the powers of the cooperative's executive bodies, unless in conformity with the Rules of the cooperative this right has been vested in its supervisory council;
3) the admittance and expelling of the cooperative members;
4) the approval of the cooperative's annual reports and accounting balances and the distribution of its profits and losses;
5) the decision on the cooperative's reorganization and liquidation.
The Law on the Production Cooperatives and the Rules of the cooperative may also place other issues within the exclusive jurisdiction of the general meeting.
The issues, placed within the exclusive jurisdiction of the general meeting or of the supervisory council of the cooperative, shall not be turned over by these for resolution to the cooperative's executive bodies.
4. The member of the cooperative shall be entitled to one vote in the adoption of decisions by the general meeting.

Article 111. Termination of the Membership in the Production Cooperative and the Transfer of the Share


1. The member of the cooperative shall have the right, at his own discretion, to withdraw from the cooperative. In this case, he shall be paid out the cost of his share or issued the property, corresponding to his share; he shall also be entitled to certain other payments, stipulated by the Rules of the cooperative. The payment out of the cost of the share or the issue of the other property to the retiring member of the cooperative shall be effected upon the expiry of the fiscal year and the approval of the accounting balance of the cooperative, unless otherwise stipulated by the Rules of the cooperative.
2. The member of the cooperative may be expelled from the cooperative by the decision of the general meeting in case of his non-performance or an improper performance of his duties, imposed upon him by the Rules of the cooperative, and also in the other cases, stipulated by the law and by the Rules. The member of the supervisory council or of the executive body may be expelled from the cooperative by the decision of the general meeting in connection with his membership in a similar cooperative.
The expelled member of the cooperative shall have the right to get back his share contribution and to receive certain other payments, stipulated by the Rules of the cooperative, in conformity with Item 1 of the present Article.
3. The member of the cooperative shall have the right to turn over his share or a part thereof to another member of the cooperative, unless otherwise stipulated by the law and by the Rules of the cooperative. The turning over of the share (a part thereof) to the citizen, who is not a member of the cooperative, shall be admitted only upon the consent of the cooperative. In this case, the other members of the cooperative shall have the right of priority to the purchase of such a share (a part thereof).
4. In case of the death of a member of the production cooperative, his heirs may be admitted to the cooperative's membership, unless otherwise stipulated by the Rules of the cooperative. If this is not the case, the cooperative shall pay out to the heirs the cost of the share of the deceased member of the cooperative.
5. The turning of the claim for the property onto the share of the member of the production cooperative by the own debts of the cooperative member shall be admitted only in case his own property proves to be insufficient for covering such debts, in conformity with the order, stipulated by the law and by the Rules of the cooperative. The claim by the debts of the cooperative member shall not be turned onto the indivisible funds of the cooperative.

Article 112. Reorganization and Liquidation of the Production Cooperatives


1. The production cooperative may be reorganized or liquidated voluntarily, by the decision of the general meeting of its members. The other grounds and the procedure for the reorganization and the liquidation of the cooperative shall be defined by the present Code and by the other laws.
2. By the unanimous decision of its members, the production cooperative may transform itself into an economic partnership or into a company.

_ 4. The State-Run and Municipal Unitary Enterprises


Article 113. The Unitary Enterprise


1. The unitary enterprise shall be recognized as a commercial organization, not endowed with the right of ownership to the property, allotted to it by the property owner. The unitary enterprise's property shall be indivisible and shall not be distributed according to the instalments (the participation shares, the shares), including among the workers of the given enterprise. The Rules of the unitary enterprise shall contain, in addition to the information, indicated in Item 2 of Article 52 of the present Code, that on the subject and on the goals of the enterprise's activity, and also on the size of its authorized fund and on the order and the sources of its formation, except for treasury enterprises.
Only the state-run and the municipal enterprises shall be set up in the form of unitary enterprises.
2. The property of the state-run or the municipal unitary enterprise shall correspondingly be in the state or in the municipal ownership, and shall belong to such an enterprise by the right of economic or operative management.
3. The trade name of the unitary enterprise shall contain an indication of the owner of its property.
4. The unitary enterprise shall be managed by its head, who shall be appointed either by the owner or by the owner's authorized body, and shall report to these.
5. The unitary enterprise shall be answerable by its obligations with the entire property in its possession. The unitary enterprise shall not bear responsibility by the obligations of the owner of its property.
6. The legal status of the state-run and municipal unitary enterprises shall be defined by the present Code and by the Law on the State-Run and Municipal Unitary Enterprises.

Article 114. The Unitary Enterprise, Based on the Right of Economic Management


1. The unitary enterprise, based on the right of economic management, shall be set up by the decision of the state or the local self-government body, authorized for this purpose.
2. The constituent document of the enterprise, based on the right of economic management, shall be its Rules, approved by the state body or by the local self-government body.
3. The size of the authorized fund of the enterprise, based on the right of economic management, shall not be less than that fixed by the Law on the State-Run and Municipal Unitary Enterprises.
4. The procedure for forming up the authorised fund of an enterprise founded by the right of economic jurisdiction shall be determined by a law on state and municipal unitary enterprises.
5. If upon the expiry of the fiscal year the cost of the net assets of the enterprise, based on the right of economic management, proves to be less than the size of its authorized fund, the body, authorized to set up such enterprises, shall be obliged to effect, in conformity with the established procedure, the reduction of the authorized fund. If the cost of the net assets falls below the law-fixed amount, the enterprise may be liquidated by the court decision.
6. In case the decision has been adopted on the reduction of the authorized fund, the enterprise shall be obliged to inform about it its creditors in written form. The creditor of the enterprise shall have the right to demand that the obligations, by which the given enterprise is the debtor, be terminated or executed in advance and that his losses be recompensed.
7. The owner of the property of the enterprise, based on the right of economic management, shall not be answerable by the enterprise's obligations, with the exception of the cases, stipulated in Item 3 of Article 56 of the present Code. This rule shall also apply to the liability of the enterprise, which has founded the subsidiary enterprise, by the latter's obligations.

Article 115. The Unitary Enterprise Founded by the Right of Operative Management


1. In the cases and in the manner envisaged by a law on state and municipal unitary enterprise a unitary enterprise may be founded by the right of operative management (treasury enterprise) on the basis of state or municipal property.
2. The constitutive document of the treasury enterprise shall be its constitution approved by the state or local governmental body authorised to do so.
3. The company name of a unitary enterprise founded by the right of operative management shall contain an indication of the fact that this enterprise is a treasury enterprise.
4. The rights of a treasury enterprise to the property consolidated thereto shall be determined according to Articles 296 and 297 of the present Code and by a law on state and municipal unitary enterprises.
5. The owner of property of a treasury enterprise shall bear subsidiary liability for the obligations of the enterprise if its property is insufficient.
6. The treasury enterprise may be reconstructed or liquidated in compliance with the law on state and municipal unitary enterprises.

_ 5. The Non-Profit Organizations


Article 116. The Consumer Cooperative


1. The consumer cooperative shall be recognized as a voluntary association of the citizens and the legal entities, based on membership and aimed at satisfying the participants' material and other needs by its members putting together their property share contributions.
2. The Rules of the consumer cooperative shall contain, in addition to the information indicated in Item 2 of Article 52 of the present Code, the terms for the size of the share contributions, made by the members of the cooperative; for the structure and the order of making the share contributions by the members of the cooperative, and for the responsibility they shall bear for violating the obligation, involved in making the share contributions; for the composition and the scope of authority of the cooperative management bodies, and for the order of their decision-making, including on the issues, with respect to which decisions shall be adopted unanimously or by a qualified majority of votes; and also for the procedure, laid down for covering the losses the cooperative has sustained, by its members.
3. The name of the consumer cooperative shall contain an indication of the main purpose of its activity, and also the word "cooperative", or the words "consumer union" or "consumer company".
4. The members of the consumer cooperative shall be obliged, in the course of 3 months after the approval of its annual balance, to cover the sustained losses by making new contributions. In case of the non-fulfillment of this duty, the cooperative may be liquidated by the court decision upon the creditor's demand. The members of the consumer cooperative shall bear the joint subsidiary liability by its obligations within the unpaid part of the additional contribution of every one of the cooperative members.
5. The incomes, derived by the consumer cooperative as a result of the business activity, performed by the cooperative in conformity with the law and with its Rules, shall be distributed among its members.
6. The legal status of the consumer cooperatives, and the rights and duties of their members shall be defined in conformity with the present Code and with the Law on the Consumer Cooperatives.

Article 117. The Public and Religious Organizations (Associations)


1. The public and religious organizations (associations) shall be interpreted as the voluntary associations of the citizens, who have united in the law-stipulated order on the basis of the community of their interests for the purpose of satisfying their spiritual or other non-material needs. The public and religious organizations shall be non-profit organizations. They shall have the right to engage in the business activity only in order to attain the goals, in the name of which they have been set up, and of the nature, consonant with these goals.
2. The participants (members) of the public and religious organizations shall not retain the right to the property, which they have passed into the possession of these organizations, including to the membership dues. They shall not be answerable by the obligations of the public and religious organizations, in which they participate in the capacity of their members, while the said organizations shall not be answerable by the obligations of their members.
3. The specifics of the legal status of the public and religious organizations as the participants of the relations, regulated by the present Code, shall be defined by the law.

Article 118. The Funds


1. The fund shall be interpreted for the purposes of the present Code as a non-membership non-profit organization, instituted by the citizens and (or) the legal entities on the basis of voluntary property contributions and pursuing the public, charity, cultural, educational or the other socially useful goals. The property, transferred to the fund by its founders (founder), shall be the fund's property. The founders shall not be answerable by the obligations of the fund they have created, while the fund shall not be answerable by the obligations of its founders.
2. The fund shall use the property for the purposes, defined in its Rules. The fund shall have the right to engage in business activities, necessary for it to attain the socially useful goals, in the name of which the fund has been established, and of the kind consonant with these goals. To perform the business activity, the funds shall have the right to set up economic companies or to take part in these. The fund shall be obliged to annually publish reports on the use of its property.
3. The procedure for the fund's management and for the setting up of its bodies shall be defined by its Rules, approved by its founders.
4. The Rules of the fund, in addition to the information, indicated in Item 2 of Article 52 of the present Code, shall also contain: the name of the fund, including the word "fund"; the information on the fund's goal; the data on the fund's bodies, including on the board of guardians, supervising its activities, on the order of appointing and relieving the fund's official persons, on the place of the fund's location, and on the fate of the fund's property in case of its liquidation.

Article 119. Amendment of the Rules and the Liquidation of the Fund


1. The Rules of the fund may be amended by the fund's bodies, if the possibility of their amendment in this way has been stipulated by the Rules. If maintaining the Rules intact is fraught with the consequences, which it was impossible to foresee when the fund was established, but the possibility of introducing amendments into the Rules has not been stipulated by the latter, or the Rules are not amendable by the authorized persons, the right to effect such amendments shall be vested in the court upon the application of the fund's bodies or the body, authorized to exert supervision over its activities.
2. The decision on the liquidation of the fund shall be adopted only by the court upon the application of the interested persons. The fund may be liquidated:
1) if the fund's property is insufficient to attain its goals, and there is no realistic hope that the property it needs may be received;
2) if the fund's stipulated goals cannot be achieved, while they cannot be amended;
3) if in its activities the fund deviates from the goals, stipulated in its Rules;
4) in the other law-stipulated cases.
3. In case of the fund's liquidation, its property, left after the creditors' claims have been satisfied, shall be directed towards the achievement of the goals, pointed out in its Rules.

Article 120. The Institutions


1. The institution shall be recognized as an organization, established by the owner for the performance of the managerial, the socio-cultural or the other kind of functions of the non-profit nature and financed by him in full or in part. The rights of the institution to the property, assigned to it, shall be defined in conformity with Article 296 of the present Code.
2. The institution shall be answerable by its obligations with the monetary means at its disposal. In case these are insufficient, the subsidiary liability by its obligations shall be borne by the owner of the corresponding property.
3. The specifics of the legal status of the individual kinds of the state-run and of the other institutions shall be defined by the law and by the other legal acts.

Article 121. Amalgamations of the Legal Entities (the Associations and the Unions)


1. The commercial organizations shall have the right, by an agreement between themselves, to establish amalgamations in the form of associations or unions, which shall be non-profit organizations, for the purposes of coordinating their business activities and of representing and protecting their common property interests. If, by the decision of its participants, upon the given association (union) has been imposed the performance of business activities, such an association (union) shall be transformed into an economic company or into a partnership in accordance with the procedure, stipulated by the present Code, or it shall set up a commercial company for the performance of business activities, or shall participate in such a company.
2. The public and the other kind of the non-profit organizations, including the institutions, shall have the right to voluntarily unite into the associations (the unions) of these organizations. The association (the union) of non-profit organizations shall be a non-profit organization.
3. The members of the association (the union) shall retain their independence and the rights of a legal entity.
4. The association (the union) shall not be answerable by the obligations of its members. The members of the association (the union) shall bear the subsidiary liability by its obligations in the amount and in accordance with the order, stipulated by the constituent documents of the given association.
5. The name of the association (the union) shall contain an indication of the main object of its members' activities, with the word "association" or "union" included into it.

Article 122. Constituent Documents of the Associations and the Unions


1. The constituent documents of the association (the union) shall be the constituent agreement, signed by its members, and the Rules approved by them.
2. The constituent documents of the association (the union) shall contain, in addition to the information indicated in Item 2 of Article 52 of the present Code, the terms for the composition and the authority of the management bodies of the association (the union) and for the order of their decision-making, including on the issues, the decisions on which shall be adopted unanimously or by a qualified majority of the votes of the association (the union) members, and also for the order, established for distributing the property, left after the liquidation of the association (the union).

Article 123. The Rights and Duties of the Members of the Associations and the Unions


1. The members of the association (the union) shall have the right to gratuitously enjoy its services.
2. The member of the association (the union) shall have the right, at his own discretion, to withdraw from the association (the union) upon the expiry of the fiscal year. In this case he shall bear the subsidiary liability by the obligations of the association (the union) proportionately to his contribution in the course of two years from the moment of his withdrawal. The member of the association (the union) may be expelled from it by the decision of the remaining participants, in the cases and in accordance with the procedure, laid down by the constituent documents of the association (the union). Toward the liability of the expelled member of the association (the union) shall be applied the same rules as in the case of the member's withdrawal from the association (the union).
3. Upon the consent of the members of the association (the union), a new participant may join it. The joining to the association (the union) of a new member may be grounded on his subsidiary liability by the obligations of the association (the union), which has arisen before his joining it.

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