1. See e.g. the Criminal Code of the RSFSR, Art.153, Vedómosti RSFSR (1960), No.40, item 591; the Criminal Code of the Kazakh SSR. Art.165. Vedomosti KazSSR (1959). No.22–23, item 177.

2. In the Soviet legal system, legal enactments were adopted principally at two levels: “all-union legislation”, which applied on the entire territory of the USSR, and “union republic legislation”, which was based on, and conformed to, all-union legislation, but applied only on the territory of a particular union republic. In most instances each branch of law was regulated, at all-union level, by “fundamental principles of legislation” and at union republic level by “codes”. Thus the Fundamental Principles of Civil Legislation applied to all Soviet State enterprises, and in addition, the Civil Code of a particular union republic applied to State enterprises situated on, or carrying out economic activity in, that union republic.

3. See e.g. Pashukanis, E. B., General Theory of Law and Marxism (trans. Einhorn, B., 1978), in which Pashukanis developed the thesis that all law was rooted in commodity exchange and thus in economic relations. It was on the basis of this type of Marxist thought that the Soviet State introduced the five-year plans in the late 1920s.Google Scholar

4. See e.g. Martemyanov, V. S., Khozyaustvennoe Pravo v 2-kh Tomakh (1994).Google Scholar

5. The USSR Statute on Socialist State Production Enterprises, confirmed by a decree of the Council of Ministers of the USSR, SP SSSR (1965), No.19–20, item 155.

6. The word “socialist” conspicuously absent in the title. The USSR Law on State Enter prises (Associations), Vedomosti SSSR (1987), No.26, item 385.

7. Such mainstream communist ideology was apparent even during the mid-1980s. See e.g. the Edict of the Presidium of the Supreme Soviet of the USSR: On the Strengthening of the Struggle against Deriving Non-labour Income, Vedomosli SSSR (1986), No.22, item 364. This type of “campaign” also took place at union republic level. See e.g. the Decree of the Central Committee of the Communist Party of Kazakhstan and the Council of Ministers of the Kazakh SSR: On Measures Regarding the Strengthening of the Struggle against Non-labour Income, SP KazSSR (1986), No.15, item 46. See also infra n.18.

8. See e.g. the provisions of the union republic criminal codes prohibiting “speculation”, which was defined as the buying and reselling of goods for the purpose of making a profit or gain. See e.g. the RSFSR Criminal Code, Art.154, and the Kazakh SSR Criminal Code, Art. 168, both supra n.1.

9. See e.g. the Fundamental Principles of Civil Legislation of the USSR and Republics, chap. 18, Vedomosti SND SSSR (1991), No.26, item 733; the Civil Code of the Republic of Belarus, chap. 39, SZ BelSSR (1964), No.17, item 183; the Civil Code of the Kazakh Repub lic, chap.41, Vedomosti Verkhovnogo Sovieta i Pravitelstva KazSSR (1961), No.2; the Civil Code of the Republic of Uzbekistan, chap.41, Vedomosti Verkhovnogo Sovieta Respubliki Uzbekistan (1963), No.9, item 30.

10. “Joint activity” is derived from the Roman law concept of societas. This appeared in pre-revolutionary Russian law as the “simple partnership”. This “simple partnership” was adopted directly into Soviet law, through the provisions of s.X(I) of the 1922 RSFSR Civil Code, SU (1922), No.71, item 904. The name of this type of contract was eventually changed to “joint activity” with the adoption of the 1961 Fundamental Principles of Civil Legislation of the USSR and Union Republics, Vedomosti SSSR (1961), No.52, item 538. The regulation of the contract for joint activity during that period of Soviet law is discussed in Sovetskoe Grazhdanskoe Pravo, Vol.11 (1961), chap.14. See also text accompanying supra n.41. More recently, the name “simple partnership” has reappeared as the label for this kind of contract in the drafts of some of the new civil codes of the former republics. For example, in Kazakhstan, chap. 12 of the new Civil Code (General Part) is entitled “Agreements on Joint Activity (Simple Partnership)”, infra n.19.

11. The USSR Law on Individual Labour Activity, Vedomosli SSSR (1986), No.47, item 946.

12. The Law on Cooperatives in the USSR, Vedomosli SSSR (1988), No.22, item 355.

13. In fact it may well be that co-operatives really had their origin in the pre-revolutionary Russian legislation on the “artel partnership”, which was essentially an association for the carrying out of a purpose by means of joint labour.

14. See the Fundamental Principles of Legislation of the USSR and Union Republics on Lease, Art.16, Vedomosli SND SSSR (1989), No.25, item 481.

15. The Law on Ownership in the USSR, Vedomosti SND SSSR (1990), No.11, item 164.

16. The Law on Enterprises in the USSR, Vedomosti SND SSSR (1990), No.25, item 460.

17. The Statute on Joint-Stock Societies and Limited Responsibility Societies, confirmed by a decree of the Council of Ministers of the USSR, SP SSSR (1990), No.15, item 82.

18. The 1977 USSR Constitution (Vedomosti SSSR (1977), No.41, item 617) provided for socialist ownership (of which State ownership was the “basic form”) and personal ownership. The latter was the legal mechanism by which citizens could own property. Personal ownership was very restrictive and precluded the ownership of property acquired through “non-labour income” (Art.13). The term “personal” was used to distinguish this form from “private” ownership, present in capitalist countries.

19. This view is confirmed by the fact that, with the adoption of new civil codes in some of the former republics during the beginning of 1995, the old union republic laws “on enter prises” and “on ownership” were repealed by the implementing decrees. See e.g. the Civil Code of the Russian Federation (Part 1), and in particular Art.2 of the accompanying Feder al Law on the Introduction into Effect of the First Part of the Civil Code of the Russian Federation, Rossiiskaya Gazeta, 8 Dec. 1994. See also the Civil Code of the Republic of Kazakhstan (General Part), and in particular Art.10 of the accompanying decree of the Supreme Soviet: On the Introduction into Effect of the Civil Code of the Republic of Kazakhstan (General Part), Kazakhstanskaya Pravda, 31 Jan. and 2 and 4 Feb. 1995.

20. The “partnership” was never regulated by specific legislation of the USSR of the perestroika era.

21. As A. V. Venediktov stated in his classic work State Socialist Ownership (1948), p.667: “The entire essence of any juridical person cannot be revealed without an analysis of the basic question of the right of ownership to the property of the juridical person”. It is from relations of ownership that Venediktov derived the nature, function and classification of individual types of juridical person under Soviet law.Google Scholar

22. See the Decree of the Council of Ministers of USSR: On Measures Regarding the Creation and Development of Small Enterprises, SP SSSR (1990), No.19, item 101.

23. See the Law on General Principles of Entrepreneurship of Citizens in the USSR, Vedomosti SND SSSR (1991), No.16, item 442.

24. Supra n.9, at Art.18. It should be noted that these Principles never entered into force during Soviet times; however, they were specifically adopted by a few of the former republics after independence. See text accompanying infra n.37.

25. The monopolisation of the means of production was one of the early aims of the Bolsheviks. It was thought that through monopolisation the State would be able to allocate resources more efficiently in the interests of the working class and society at large. 1918 saw the beginning of this process in the field of foreign economic relations through the enactment of the Dekret SNK: On the Nationalisation of Foreign Trade, SU (1918), No.33, item 432. For one of the best Soviet accounts of the early development of Soviet civil law see Genkin, D. M., Novitzkiy, I. B. and Rabinovich, H. V., Istoriya Sovelskogo Grazhdanskogo Prava (1949).Google Scholar

26. Decree of the Council of Ministers of USSR: On the Procedure for the Creation on the Territory of the USSR and the Activities of Joint Enterprises with the Participation of Soviet Organizations and Firms of Capitalist and Developing Countries, SP SSSR (1987), No.9, item 40.

27. See e.g. idem, Art.2.

28. idem, Arts.5 and 21.

29. Decree 49 was amended numerous times by subsequent decrees of the Council of Ministers. See SP SSSR (1989), No.23, item 75; No.28, item 106; (1990), No.19, item 100; No.26, item 121.

30. Edict of the President of the USSR: On Foreign Investments in the USSR, Art.2, Vedomosti SND SSSR (1990), No.44, item 944.

31. However, the literal wording of the USSR Joint-Stock Societies Statute was clear in that the joint-stock societies could be formed only by “Soviet juridical persons and citizens” (Art.38, emphasis added).

32. The Fundamental Principles of Legislation on Investment Activity in the USSR and Republics, Vedomosti SND SSSR (1990), No.51, item 1109.

33. The Fundamental Principles of Legislation on Foreign Investments in the USSR and Republics, Vedomosti SND SSSR (1991), No.31, item 881.

34. See e.g. the Law on Foreign Investments in the RSFSR, Art.3, Vedomosti SND RSFSR (1991), No.29, item 1008; the Law on Foreign Investments in Turkmenistan, Art.3, Vedomosti Turkmenistana (1992), No.5 item 38; the Law on Foreign Investments in the Republic of Uzbekistan, Art.4, Vedomosti UzSSR (1991), No.8, item 184.

35. See e.g. the Statute on Joint-Stock Societies, confirmed by Decree 601 of the RSFSR Council of Ministers, SP RSFSR (1991), No.6, item 92. Although limited responsibility socie ties were contemplated by the RSFSR Law on Enterprises and Entrepreneurial Activity, Art.11, Vedomosti SND RSFSR (1990), No.30, item 418; however, they were renamed “limited responsibility partnerships”.

36. See e.g. the Law of the Ukraine on Economic Societies, Vedomosti Ukrainy (1991), No.49, item 682, and the Law of the Republic of Kazakhstan on Economic Partnerships and Joint-Stock Societies, Vedomosti KazSSR (1991), No.26, item 343.

37. See e.g. in Russia, Decree: On the Introduction into Effect of the Fundamental Principles of Civil Legislation of the USSR and Republics, Vedomosti SND SSSR (1991), No.26, item 734; and in Kazakhstan, Decree: On the Regulation of Civil Legal Relations in the Period of Conducting the Economic Reform, Vedomosti Kaz (1993), No.4, item 71.

38. See text accompanying supra n.19.

39. See e.g. amendments to the Belarus Civil Code in March 1994 (SZ RepBel (1994), No. 13. item 183).

40. Supra n.36, as amended by the Law on the Introduction of Changes and Additions to the Law of the Republic of Kazakhstan on Economic Partnerships and Joint-Stock Societies, Vedomosti Kaz (1993), No.9, item 216.

41. The “joint activity” of Soviet law, and the law of the former republics, is similar to participation associations of other civil law countries, such as the French “la sociét´e en participation” and the German “diestille Cesellschaft”. Such a form of association is absent from Anglo-American law due largely to the concept of the undisclosed principal.

42. See text accompanying supra nn.9 and 10.

43. The problem of different corporate forms and their terminology was also present in pre-revolutionary Russian law. At that time there existed the partnership, the society and the company upon stocks (na aktsiyakh), shares (na payakh) or participants (po ychastnikam). The use of various different labels for essentially the same corporate vehicle was often criticised by pre-revolutionary academics. See e.g. Shershenevich, G. F., Uchebnik Torgo-vogo Prava (1914, repr. 1994), pp.138–139. Such problems of terminology appeared in the 1922 RSFSR Civil Code, supra n.10, where s.X(5) is titled the “Joint-Stock Society (Share Partnership)”. Art.1 of the 1927 Statute on Joint-Stock Societies, SZ (1927), No.49, item 500, states: “The terms ‘joint-stock society’ and ‘share partnership’, ‘stock’ and ‘share’, ‘stock holder’ and ‘shareholder’, ‘charter capital’ and ‘fixed capital’, in the present law and in all legislation affecting joint-stock societies shall be deemed synonymous”.Google Scholar

44. It is interesting to note that the purpose of these new commercial organisations varies among the legislation of the former republics. Carrying out private entrepreneurial activity for profit was prohibited under Soviet law (see supra n.1). The legislation of some of the former republics, influenced by this Soviet legacy, omits any reference to profit. E.g. Turk menistan legislation provides that societies are created simply “for the purposes of effectuating economic activity” (the Law of Turkmenistan on Joint Stock Societies, Art.1 (1), Turkmenistanskaya Iskra, 30 10 1993, p.3). However, in others, e.g. the Ukraine, legislation provides that economic societies are created “for the purposes of obtaining a profit” (the Law of the Ukraine on Economic Societies, supra n.36, at Art.1).Google Scholar

45. See, by contrast, the English Partnership Act 1890, s.5, which provides that “every partner is an agent of the firm and his other partners for the purpose of the business of the partnership”.

46. See e.g. the Law of the Republic of Uzbekistan on Economic Societies and Partnerships, Art.22(1), Birzhevoy Vestnik Vostoka, No.4(56), 22 Jan. 1993, p.5; and the Kazakhstan Partnerships Law, supra n.40, at Art.29(3).Google Scholar

47. However, the legislation of some of the former republics provides for a “board” of the full partnership (see e.g. the Russian Civil Code (Part 1), supra n.19, at Art.71); but in such instances there are generally few provisions regulating its functions and powers.

48. The provisions of the new Russian Civil Code (Part 1) make it clear that a full partner ship should only operate on the basis of a constitutive contract; see idem, Art.70. As a result, Art.70 refers to the “contributed capital” of a full partnership instead of the term “charter capital”, used where the juridical person is created on the basis of a charter. It should be noted that there are cases where the legislation of the former republics requires full partnerships to have a charter in addition to a constitutive contract (see e.g. Kazakhstan Partner ships Law, supra n.40, at Art.5(1) and the new Kazakhstan Civil Code (General Part), supra n.19 at Arts.58(5) and 64). This is probably a result of inappropriate drafting.

49. In some countries there is a restriction on the maximum number of participants; e.g. in England generally the number of partners cannot exceed 20 (Companies Act 1985, s.716(1)). This might reflect the fact that the partnership is seen as an association for combining personal efforts.

50. Somewhat misleadingly, contributions to this fund are sometimes referred to as a “share” (dolya). The Russian Civil Code (Part 1), supra n.19, at Art.66(1) goes further and provides that all economic partnerships shall have a charter or contributed capital that is divided “into shares (contributions) of the founders (participants)”.

51. It should be noted that the new Kazakhstan Civil Code (General Part), supra n.19, goes some way to addressing this issue by making the distinction between “contribution” and “share in the property of the partnership” in Art.59.

52. Moreover, it is questionable as to whether the concept of a “share in the property” is even possible where partnerships exist as juridical persons. However, the concept of a “participatory share” is consistent with juridical personality as it is simply an expression of both capital contributions and individual efforts of the participants.

53. See e.g. the RSFSR Law on Enterprises, supra n.35, at Art.9.

54. See e.g. Sovetskoe Crazhdanskoe Pravo (1986), Part 1, pp.117–119.Google Scholar

55. See text accompanying supra n.47.

56. See e.g. the Russian Civil Code (Part 1), supra n. 19, at Art.76( 1); Kazakhstan Partnerships Law, supra n.40, at Art.35. Such a concept is reflected in the legislation of other civil law and common law countries; see e.g. the English Partnership Act 1890, s.33(1); the French Civil Code, Art.1865; the German Commercial Code, s.131.

57. See e.g. Russian Civil Code, idem, Art.76(2); Law of the Ukraine on Economic Societies, supra n.36, at Art.73.

58. See Shershenevich, op. cit. supra n.43, at pp.106–111.Google Scholar

59. As the “limited partnership” in Anglo-American law, “la société en commandite simple” in French law and “die Kommanditgesellschafi” in German law.

60. Generally, it is for very specific reasons thai the kommandit partnership is used in preference to the limited liability company; e.g. when there are tax savings or when a certain profession is prohibited from incorporating.

61. It is for this reason that often the legislation of the former republics provides, via cross-references, that provisions on the full partnership also apply to the kommandit partnership.

62. It should be noted that the provisions of the new civil codes of the former republics prohibit the right of a kommandit partnership to issue stocks. See e.g. the new Russian Civil Code (Part 1), supra n.19, at Art.66(7) and the new Kazakhstan Civil Code (General Part), supra n.19 at Art.58(9).

63. It should be noted that in the terminology of some of the new civil codes of the former republics these bodies are referred to respectively as the “General Meeting of Participants” and the “Board (Directorate)”. See e.g. idem, Arts.91 and 60 respectively.

64. See Shershenevich, op. cit. supra n.43, at p.140.Google Scholar It should further be noted that this problem was a feature of early Soviet law and was explicitly resolved in Art.1 of the 1927 Statute on Joint-Stock Societies (see supra n.43).

65. See the RSFSR Law on Enterprises, supra n.35. This article caused much confusion at the time because the use of brackets in Soviet law denotes either the alternative (i.e. two separate concepts) or the identity (i.e. two labels for the same concept). As such it was unclear as to whether the limited liability partnership was a separate corporate vehicle from the joint-stock society of the closed type, or whether these were just two labels for the same corporate vehicle.

66. In the Russian Civil Code (Part 1), this figure is to be set by subordinate legislation (see Art.88(1)) and in the Kazakhstan Civil Code (General Part), this figure is set at 30 (Art.77(2)) (both supra n.19).

67. Ibid.

68. idem, Art.97(2). Despite this, the Russian Civil Code (Part 1) also provides for the possibility of creating the limited responsibility society in addition to the closed joint-stock society (chap.4, s.2(4)).

69. One example is the Genossenschaft under Austrian law which sometimes has a form of liability akin to that of “additional responsibility”.

70. The creation and operation of pre-revolutionary joint-stock societies was restricted by the Soviet State as early as 1918 through the Decree of the Local Commissar of Trade and Industry on the Legal Limitations of Founding of Enterprises for Trade and Trade-Industry, SU (1918), No.32, item 425, confirmed by a Dekret of SNK, SU (1918), No.47, item 561. Despite this, the 1922 RSFSR Civil Code (supra n.10) contained comprehensive provisions on the regulation of joint-stock societies in s.X(5), and in 1927 a Statute on Joint-Stock Societies was adopted. However, soon after the adoption of this Statute the activity of such societies was severely curtailed with the introduction of the five-year plans and the amendment of the 1922 Code in 1928 and 1931, SU (1928), No.38, item 282, (1931), No.72, item 509. In general see Genkin et ai, op. cit. supra n.25, at chap.1.

71. The most direct origin of this provision in the legislation of the former republics appears to be the USSR Joint-Stock Societies Statute, where a society is defined as “an agreement” (Art.1) between the two participants (Art.3). These provisions were reproduced in most of the statutes of the former republics (see e.g. the RSFSR Statute on Joint-Stock Societies, supra n.35, at Art.1, which refers to a joint-stock society as formed on the basis of an “agreement”). Recently there has been a trend in Europe to permit the creation of single-member “closed companies”. E.g. it only became possible to create single-stockholder companies in England with passing of the Companies (Single Member Private Limited Companies) Regulations 1992, S.I. 1992/1699, Sch.l, para.1; and in France it only became possible to create a single-member company, the EURL, after the passing of Law No.85–697 Relative a l'entreprise unipersonnelle a responsabilité limilee el à l'exploitation agricole à responsabilité limitée of 11 July 1985. It should be noted that in accordance with such a trend, the new Russian Civil Code (Part 1), supra n.19, like the new civil codes of other former republics, explicitly provides for the creation of single-member joint-stock societies in Art.98(6).

72. See text accompanying supra n.44.

73. Or “board” in common law terminology.

74. See e.g. France, Law No.66–537 Sur les sociétés commerciales of 24 July 1966, Arts.1 18–150. Management of the société anonyme can be either through a council of directors (conseil d'administration) or through a board (direcloire) and a supervisory council (conseil de surveillance) along the lines of the German model.

75. The labels for these two “types” of joint-stock society have been changed by most of the new civil codes of the former republics—from “joint-stock society of the open (or closed) type”, to simply “open (or closed) joint-stock society”. See e.g. the new Russian Civil Code (Part 1), Art.97 and Kazakhstan Civil Code (General Part), Art.86 (both supra n.19).

76. See supra n.71.

77. See supra n.40 at Art.1.

78. Annex 1 to the Decree of the Cabinet of Ministers of the Republic of Kazakhstan of 14 July 1993, No.606: Statute on the Procedure for the Formation of Joint-Stock Companies (State or with State Participation), Sobranie Aktov Prezidenta Respubliki Kazakhstan i Provitelstva Respubliki Kazakhstan (1993), No.28, item 341.

79. It would be misconceived to distinguish between different types of corporate form on the basis of different amounts of minimum charter capital required for different corporate vehicles, as provided for by some laws on partnerships and societies of the former republics.

80. Another alternative is to adopt a single label for all associations, such as “la soctété” in French law. This approach has been taken by the Ukraine, which uses “society” for all its associations. The Law of the Ukraine on Economic Societies, supra n.36, at Art.1, provides for “joint-stock societies”, “limited responsibility societies”, “additional responsibility societies”, “full societies” and “kommandit societies”.

81. In fact, the new Kazkahstan Civil Code (General Part), chap.12, supra n.19, includes provisions on the contract for joint activity. Rather than abolishing it or restricting its application, these new provisions have brought the contract into line with market-economy concepts and made it even closer to the concept of full partnership.

82. It should be noted that Soviet law and now the laws of the former republics stress a further difference between the contract for joint activity and the full partnership. While participants in a full partnership always have joint and several liability, participants in a contract for joint activity have liabilities in proportion to their shares in the common share property, in the event that the contract is silent on this point. See e.g. the 1922 RSFSR Civil Code, supra n.10, at Art.287 and the new Kazakhstan Civil Code (General Pan), supra n.19, at Art.231.

83. See text accompanying supra n.21.

84. See text accompanying supra n.20.

85. See e.g. the Law on Ownership of the Republic of Kazakhstan, Art.4(2), Vedomosti KazSSR (1991), No.1, item 18; as amended Sovety Kazakhstan 22 05 1993, p.2.Google Scholar

86. See the Russian Civil Code (Part 1), Art.114, and the accompanying Federal Law, Art.6(6) (both supra n.19).

87. For a classic exposition of the Soviet ideology that “explains” the existence of juridical personality coupled with State ownership of its assets see S. N. Bratus, Subekti Crazhdan-skogo Prava (1950), pp.92–94, 99.Google Scholar

88. See text accompanying supra n.28.

89. See text accompanying supra n.33.

90. These labels vary slightly as between the former republics; although the distinction between enterprises with some foreign investments and those comprised entirely of foreign investments is invariably made. An extreme example of the continued desire to make the distinction between enterprises on the basis of ownership appears in the new Kazakhstan Law on Foreign Investments, Soviety Kazakhslana, 20 Jan. 1995. Art.1 sets out the distinc tions between “foreign investors” (foreign juridical persons, foreign citizens, foreign States and international organisations), “foreign juridical persons” (juridical persons created in accordance with the legislation of a foreign State) and “juridical persons of the Republic of Kazakhstan” (juridical persons created in accordance with Kazakhstan legislation); and also between “foreign enterprises” (enterprises with 100% foreign participation created in accordance with Kazakhstan legislation) and “joint enterprises” (enterprises with some foreign participation created in accordance with Kazakhstan legislation).

91. Supra n.26.

92. See supra n.31.

93. See e.g. the new Russian Civil Code, supra n.19, which has an entire chapter (4) of 80 articles (most with numerous subclauses) on juridical persons.

94. Apparently, such an approach has been taken by Belarus: see supra n.39.

95. Grazhdanskoe Pravo v 2-kh Tomakh (1994) p.5.Google Scholar

96. This article has been prepared on the basis of legislation as of March 1995.