The definition of the forms and subjects of the right of ownership is not only purely theoretical, but also of practical importance. From the form of ownership and subjects of the right of ownership depends on the solution of the legal regime of the property owned by this subject, the right of a certain subject to own this or that property, the features of the acquisition and termination of the right of ownership of property, possession, use and disposal of it.
Article 13 of the Constitution of the Republic of Belarus and paragraph 1 of Article 213 of the Civil Code (CC) provide that “property can be public and private”. At the same time, the state guarantees equal protection and equal conditions for the development of all forms of ownership. The rights of all owners are protected equally.
State and private forms of ownership, in turn, are divided depending on the subjects of ownership. State property acts as republican property (property of the Republic of Belarus) and communal property (property of administrative-territorial units).
Republican property is used in the interests of the entire population of the Republic of Belarus. The property of the republican property is assigned to enterprises and institutions of the Republic of Belarus in accordance with the acts of legislation.
Funds of the republican budget, gold and foreign exchange reserves and diamond fund, objects of exclusive property of the Republic of Belarus and other state property not assigned to republican legal entities constitute the treasury of the Republic of Belarus.
The law does not contain any restrictions on objects that may be owned by the Republic of Belarus. The Law of May 5, 1998 “On Objects Owned Only by the State” contains a list of objects that cannot be owned by anyone other than the State.
The property of administrative-territorial units (communal property) is used in the interests of the people of the corresponding administrative-territorial unit. It is not also republican property.
Communal property consists of the treasury of the administrative-territorial unit (local budget funds and other communal property not assigned to communal legal entities) and property assigned to enterprises and institutions of the administrative-territorial unit in accordance with legislative acts.
Private property is also divided depending on the subjects of this property into private property of individuals and private property of non-state legal entities.
Any property may be owned by citizens and legal entities. They may not own certain types of property specified in the law. At the same time, the number and value of property owned by citizens is not limited. Such restrictions are established by law in the interests of national security, public order, protection of morality, public health, rights and freedoms of other persons. The Civil Code specifies the rights of the founders (participants, members) of commercial and non-commercial legal entities. It is established that the property transferred as contributions (contributions) by these persons to commercial and non-profit organizations (except for those transferred to unitary enterprises or institutions financed by the owner), as well as the property acquired by these legal entities, is owned by these legal entities, and the founders (participants, members) of a commercial organization in with respect to property owned by this organization, only the rights of obligation defined in the constituent documents have obligations.
The founders (participants, members) of public and religious organizations, charitable and other foundations lose the right to property transferred by them to the ownership of the relevant organization. The property in question is owned and used by these organizations and foundations to achieve the purposes provided for in their constituent instruments.
The Law of the Republic of Belarus of May 5, 1998 “On Objects Owned Only by the State” establishes that legal entities of private ownership and individuals do not have the right to create or otherwise acquire ownership of objects listed in Article 2 of the said law.
Legal entities of private ownership and individuals guilty of illegal possession, use and disposal of objects that should be owned only by the state are liable in accordance with the legislation of the Republic of Belarus.
Private property of legal entities of non-state form of ownership and private property of individuals is used exclusively in their interests.
As for the right of ownership and other property rights to immovable and movable property of foreign legal entities and individuals, it is determined by the law of the country where this property is located, unless otherwise provided by legislative acts. The belonging of property to immovable and movable things, as well as other legal qualification of property, are determined by the law of the country where this property is located (Article 1119 of the Civil Code). This gives grounds to conclude that in the territory of the Republic of Belarus there is legislation on the right of ownership of citizens and legal entities of the Republic of Belarus with certain exceptions provided for by Art. 1119-1123 of the Civil Code.
The division of forms of ownership, which is based on a single criterion – the subject of the right of ownership, does not exclude other classifications of the right of ownership into various types and subtypes. Thus, the private property of legal entities, according to the peculiarities of the legal regime, appears in the form of private property of limited liability companies, subsidiaries with additional liability, joint-stock companies, production cooperatives, consumer cooperatives, public and religious organizations, etc.
The division of ownership into forms, types and subspecies can be carried out according to other criteria, if this makes it possible to identify the features of the corresponding type and subtype of property rights.
Of particular note is the ownership of labour. Its peculiarity is due primarily to the fact that the object of this property is specific – the abilities of a person. Moreover, not any, but specific, objectively necessary for a particular work, and besides, more and more developed. In addition, the peculiarity of this type of property is due to the fact that here the object is inseparable from the subject of property and exists not only thanks to him, but also directly in it.
Recognition of the features of this type of ownership (for labor) determines the specifics of the mechanism for its implementation. It should be such as to provide compensation for the means necessary not only for the resumption of the abilities in question, but also for the maintenance of life itself, as well as for the development of the personality of the owner of these abilities. The mechanism should be such that, like any other, this property, when economically realized, gives income to the employee.
Finally, the extraordinariness of abilities, and even their uniqueness, especially creative, require a unique mechanism for their economic realization. It should exclude the accepted (especially in Western literature) equating all factors of production (capital, land, labor), “combing” them, so to speak, with one comb.
Man as a creator and his innovative abilities, as modern scientific and technological development shows, become decisive among other factors for ensuring economic and all social progress. This should determine the special mechanism for their implementation, not aimed only at generating income, as in the use of other factors of production (capital and land), but focused on creating favorable conditions for the manifestation and development of creative abilities, on the attitude to talent as a national treasure.
Awareness of such features and a differentiated approach to factors of production are becoming especially important in the new century. The new approach to the relations between “Society – Man – Nature” as reasonable and harmonious relations manifested here requires priority increases not in material production, but in the sphere of intellect, education, culture. And this, in turn, requires a special, differentiated attitude to the “labor” factor, to the creative abilities of workers, to their wages.
But such a feature of this factor and such an approach to ownership of it have not yet been properly reflected either in theory or in practice.
The new approach requires paying special attention to the problem of education – its qualitative improvement, continuity throughout working life, humanitarianization.
Legal entities and organizational and legal forms of business entities in the Republic of Belarus
Participation in market commodity-money relations often requires very significant capital that individuals do not possess. Only by combining the capital of many participants in market relations, it is possible to set and solve large investment projects.
This feature of market relations has led to the participation in them of artificial entities operating in the market as independent business entities, called legal entities. The attractiveness of this form of management is explained by the fact that it allows you to quickly concentrate significant capital, while the founders (participants, members) of a legal entity are not responsible for its obligations with all their property. They risk only their contribution to the authorized fund (capital) of a legal entity. This allows you to determine in advance what part of your property the founder (participant, member) of a legal entity risks in the event that it turns out to be insolvent.
The concept of a legal entity is contained in Art. 44 of the Civil Code of the Republic of Belarus. “A legal entity is an organization that owns, manages or manages separate property in its ownership, economic management or operational management, bears independent responsibility for its obligations, can acquire and exercise property and personal non-property rights on its own behalf, perform duties, be a plaintiff and defendant in court. A legal entity must have an independent balance sheet or estimate.”
From the above definition it follows that a legal entity is an organization, i.e. an association of persons. However, not every association of persons (organization) can be called a legal entity. In order for an association of persons to be a legal entity, it must have the following features: organizational unity, separate property, independently responsible for all its obligations with its property, act in civil circulation and in any court on its own behalf.
The organizational unity of a legal entity consists in the fact that it has a certain structure, subordination of its structural units and structural units, a system of management bodies with appropriate competence. The organizational unity of a legal entity is reflected in its charter or general regulations on such legal entities.
Property isolation of a legal entity means that its property is separated from the property of its founders (participants, members) and from the property of all other individuals, legal entities, the state and administrative-territorial units. The separateness of the property of a legal entity in many cases extends to the recognition of its owner of the property under its jurisdiction. In particular, the owners of the property transferred to them are legal entities formed by groups of citizens (economic partnerships (full and limited), limited liability companies, additional liability companies, open and closed joint-stock companies), production and consumer cooperatives, public and religious organizations (associations).
Legal entities formed on the basis of the property of the Republic of Belarus or the property of administrative-territorial units are not the owners of the property assigned to them. A sign of their property isolation is the independent balance sheet of the state enterprise and the independent estimate of the state institution with the right to dispose of the property. Unitary enterprises formed by an individual, spouses or members of a peasant (farmer) farm are not owners of property.
Not being the owner of property, a legal entity formed on the basis of state property (property of the Republic of Belarus or the property of an administrative-territorial unit) or private property, of one citizen, spouses or a peasant (farmer) farm owns, uses and disposes of property under its jurisdiction on the right of economic management or the right of operational management, i.e. enjoys the property right.
The right of economic management is the right of a legal entity (unitary enterprise) based on the right of state property to possess, use and dispose of property granted to it by the owner for the implementation of economic activities within the limits determined in accordance with the legislation.
The right of operational management is the right of a state-owned enterprise, as well as an institution in respect of the property assigned to them, to exercise within the limits established by law, in accordance with the purposes of its activities, the tasks of the owner and the purpose of the property, the rights of possession, use and disposal of it.
The independent liability of a legal entity for its obligations is expressed in the fact that legal entities are responsible for their obligations with their property. The founder (participant, member) of a legal entity or the owner of its property is not responsible for the obligations of a legal entity, and the latter is not responsible for the obligations of the founder (participant, member) or owner, except in cases provided for by law or constituent documents of a legal entity. In particular, the members of the company with additional liability jointly and severally bear additional (subsidiary) liability for the obligations of the company with their property within the limits determined by the constituent documents. In case of economic insolvency (bankruptcy) of one of the participants, his responsibility for the obligations of the company is distributed among the other participants in proportion to their contributions, unless a different procedure for the distribution of responsibility is provided for by the constituent documents of the company.
Foreclosure on the participant’s share in a limited liability company and on the share of a member of a company with additional liability for his own debts is not allowed, but if the participant’s property is insufficient to cover his debts, creditors have the right to demand the allocation of the share of the debtor participant in accordance with the rules of Articles 48-50 of the Law of the Republic of Belarus of December 9, 1992 “On Joint Stock Companies, Limited Liability Companies and Companies with Additional Liability Companies” responsibility.” Consequently, creditors of a legal entity can apply with claims arising from the activities of a legal entity only to this legal entity. Foreclosures on their claims, as a rule, can only be applied to the property of this person.
Production and consumer cooperatives, as well as public organizations, are built on the terms of membership in them. Their participants are not responsible for the obligations of the legal entity. However, members of a production cooperative (artel) bear subsidiary liability for the obligations of a production cooperative in equal shares, unless otherwise specified in the charter, within the limits established by the charter, but not less than the amount of annual income received in the production cooperative. Members of a consumer cooperative are obliged to cover the resulting losses through additional contributions within three months after the approval of the annual balance sheet. In the event of failure to comply with this obligation, the cooperative may be liquidated in court at the request of creditors. Members of a consumer cooperative are vicariously liable for its obligations up to the extent of the unpaid part of the additional contribution of each of the members of the cooperative.
The association (union) is not responsible for the obligations of its members. Members of the association (union) bear subsidiary responsibility for its obligations in the amount and manner provided for by the constituent documents of the association.
The Republic of Belarus and its administrative-territorial units are not liable for the obligations of legal entities created by them, except in cases provided for by legislative acts. In particular, the Republic of Belarus bears subsidiary liability for the obligations of a state-owned enterprise in case of insufficiency of its property.
The Republic of Belarus is a special subject of civil law. The State cannot be considered a legal person, since it itself establishes its legal capacity. By establishing a legal person, the State waives civil liability for its obligations, but the State may, by way of exception, assume responsibility for the obligations of State organizations or establish that those organizations are liable under the obligations of the State. Thus, the National Bank of the Republic of Belarus, being a legal entity, is not liable for the obligations of the Government of the Republic of Belarus, just as the Government of the Republic of Belarus is not responsible for the obligations of the National Bank, except in cases provided for by law, or when the bank assumes such responsibility.
The institution is liable for its obligations with the funds at its disposal. If they are insufficient, the owner of the relevant property bears subsidiary liability for his obligations.
State-owned enterprises that are legal entities are subordinate to state administration bodies (ministries, departments, concerns, etc.) are also not responsible for each other’s obligations. For example, the Ministry of Communications manages subordinate associations, enterprises, institutions and organizations in accordance with the procedure established by law. However, neither this Ministry nor its enterprises, institutions, organizations are responsible for each other’s obligations.
Another organization is not liable for the obligations of its enterprise, which is a legal entity, and this enterprise is not liable for the obligations of the said organization. For example, the Belarusian Republican Union of Consumer Societies unites on a voluntary basis consumer societies and their unions of the Republic of Belarus. It is a legal entity. Consumer societies and their unions also enjoy the rights of a legal person. Neither the Belkoopsoyuz nor its constituent consumer societies and their unions are liable for each other’s obligations.
Independent representation of a legal entity in civil circulation and any court on its own behalf means that the competent authority or representative of a legal entity may be a plaintiff or defendant in a court, economic or arbitration court, as well as in the International Arbitration Court at the Belarusian Chamber of Commerce and Industry. A legal entity acts as an independent subject of law, and in relations with other bodies of state power and administration.
The variety of types and organizational and legal forms of legal entities formed by a different composition of their founders, on the basis of all forms of ownership with their own goals, with unequal rights of founders to the property of organizations formed by them, requires a scientific classification of legal entities. The result of this classification is the construction of a scientifically based system of legal entities that allows not only to review them all, but also to regulate them accordingly by law activities, to monitor their compliance with the law in order to protect the interests of the whole society and its individual members, to correctly resolve various kinds of disputes involving legal entities, as well as the founders of legal entities with legal entities established by them on various issues, in particular in connection with their departure from the membership, etc.
Legal entities are divided into types according to various mismatched criteria, depending on the purpose that is set during the classification. There are many such criteria. The most significant of them are:
(a) The property on the basis of which they are formed;
b) the rights of the founders (participants, members) of a legal entity to the property of the latter;
c) the purpose of the activities of legal entities;
d) the composition of the founders;
e) the method of education;
(e) Constituent instruments (their composition);
g) the nature of the founders’ participation in the activities of the legal entity;
h) the scope of property rights of a legal entity;
i) the obligation of participants (members) to participate in the activities of a legal entity with their work;
j) features of the status (legal regime) of a legal entity;
k) subordination of legal entities.
Types of legal entities depending on the form of ownership on the basis of which they are formed.
According to this criterion, legal entities are divided into:
(a) Formed on the basis of the property of an individual citizen (natural person);
b) which are based on the property of various founders (individuals and legal entities formed by individuals) in various combinations;
c) formed on the basis of state property (property of the Republic of Belarus and property of administrative-territorial units).
The essence and significance of this division of legal entities lies in the fact that it is possible to determine in whose interests they are created and carry out their activities, the limits and forms of interference in their activities of state authorities and public administration bodies, the possession of them, power powers.
The classification of legal entities under consideration is similar to the division of legal entities in the legislation and doctrine of states with developed market economies into legal entities of public law and legal entities of private law. The distinctive features of legal entities of public law usually include the nature of the act necessary for the emergence of a legal entity (law, administrative legal act) and the public nature of the purposes for which a legal entity is created, the presence of its powers of power. Legal entities of private law are created on the basis of a private law act to achieve private goals.
Division of legal entities depending on the rights of their founders (participants, members) into the property of a legal entity.
According to this criterion, legal entities are divided into three types:
a) legal entities whose founders (participants, members) retain the right of ownership or other proprietary right to the property of a legal entity. These include State legal entities, i.e. based on the property of the Republic of Belarus and the property of administrative-territorial units, and legal entities formed on the basis of private property by one individual, spouses, peasant (farm) farm or legal entity;
b) legal entities, founders, participants, members of which do not have property rights in respect of the property of a legal entity. These include public associations, religious organizations, charitable and other foundations, associations of legal entities;
c) legal entities to whose property their founders (participants, members) have only rights of obligation. These include business associations, societies and cooperatives. The founders of such legal entities may have property rights only to the property that they have transferred to legal entities for use as a contribution to the authorized fund.
Depending on which of these groups the legal entity belongs to, the question of the rights to the property of a legal entity is decided in the event of the withdrawal of its founders (participants, members) and in the event of the liquidation of a legal entity.
Depending on the purpose of activity, legal entities are divided into commercial and non-commercial.
Commercial legal entities pursue the goal of carrying out economic (entrepreneurial) activities with profit as its main result, as well as the distribution of profits between its founders (participants, members). They can be created in the form of economic partnerships and societies, unitary enterprises, production cooperatives.
Non-commercial legal entities have other purposes that are not related to economic (entrepreneurial) activities. They can engage in economic (entrepreneurial) activities only insofar as it is necessary to achieve their statutory goals and corresponds to these goals, and do not have the right to distribute the profits received among their participants (members). Non-profit organizations are established in the form of consumer cooperatives, public or religious organizations (associations), charitable and other foundations financed by the owner of institutions, as well as in other forms provided for by law.
According to the composition of the founders, there are legal entities established:
(a) The State, the administrative-territorial units and their bodies;
b) one individual (spouses), peasant (farm) farm;
c) several natural persons;
d) one legal entity;
e) legal entities and entrepreneurs in various combinations. Legal entities formed by the state are: the Administration of the President of the Republic of Belarus; Office of the Council of Ministers of the Republic of Belarus; economic courts; the central office and institutions of the Belarusian State Forensic Medical Examination Service; Republican bodies of state administration: ministries, state committees, committees under ministries (state committees); regional, city and district executive committees; The Social Protection Fund of the Ministry of Social Protection of the Population and the National Agency for Control and Inspection of the Ministry of Defense of the Republic of Belarus; departments and offices of local executive committees vested with the rights of a legal entity; other state bodies, for example, the Secretariat of the Constitutional Court of the Republic of Belarus; National Center for Legal Information of the Republic of Belarus.
The Government of the Republic of Belarus shall create, reorganize, liquidate enterprises, institutions, organizations, associations owned by the Republic of Belarus. The Ministry enjoys the same rights in respect of associations, enterprises, institutions and organizations subordinate to it.
A legal entity can be formed by one individual in accordance with Article 3 of the Law of the Republic of Belarus of May 28, 1991 “On Entrepreneurship in the Republic of Belarus”. The Civil Code of the Republic of Belarus calls such an enterprise a private unitary enterprise, its property is privately owned by an individual (joint property of spouses or members of a peasant (farmer) farm) and belongs to such an enterprise on the right of economic management.
Several individuals may establish commercial legal entities in the form of economic partnerships and societies, production cooperatives and non-profit legal entities in the form of consumer cooperatives, public and religious organizations (associations), foundations and institutions.
An independent subsidiary economic company may be established by one business company or partnership.
Commercial and non-commercial legal entities can create business companies, associations of legal entities (associations, unions). Legal entities together with individuals have the right to establish business partnerships and companies.
According to the method of formation, legal entities are distinguished, formed in an administrative, permissive manner and in a regulatory and explicit way.
Division of legal entities according to the composition of constituent documents
On this basis, legal entities are divided into formed and operating on the basis of:
(a) The Memorandum of Association;
b) the Memorandum of Association and the Articles of Association;
c) only the statutes.
On the basis of only the memorandum of association, full and limited partnerships, the memorandum of association and the articles of association – limited liability companies and additional liability companies – are created and operate. Unitary enterprises, production and consumer cooperatives, public associations, religious organizations, foundations, institutions, associations of legal entities (associations and unions), political parties and cooperatives are formed and operate on the basis of the charter alone.
By the nature of the participation of the founders in the activities of a legal entity, a distinction is made between legal entities whose members combine their personal efforts to achieve an entrepreneurial goal (business partnerships: full and limited) and legal entities whose members combine their capital (economic companies: joint-stock companies, limited liability companies, companies with additional liability).
According to the scope of property rights, legal entities are divided into:
1) legal entities that have the right of operational management of the property to which they are endowed (state-owned enterprises and institutions financed by the owner);
2) legal entities with the right of economic management of property, granted to them by the owner for the implementation of economic activities (unitary enterprises);
3) legal entities that have the right of ownership of their property (all other legal entities).
Division of legal entities according to the peculiarities of their legal status (legal regime).
According to this criterion, legal entities are divided into legal entities under Belarusian law and legal entities under foreign law.
Legal entities under Belarusian law are formed and operate on the territory of the Republic of Belarus and abroad in accordance with its legislation. They are created on the basis of state (republican and communal) property, property of national individuals and (or) legal entities. Legal entities under Belarusian law are also legal entities (enterprises) with foreign investments. In the authorized capital of such an enterprise, foreign capital is used partially (joint venture) or completely (foreign enterprise).
They carry out their activities in the manner prescribed by the laws on enterprises, societies, entrepreneurial and investment activities, other legislation of the Republic, taking into account the provisions established by these laws and international treaties of the Republic of Belarus.
Legal entities of foreign law are legal entities established outside the Republic of Belarus. According to Art. 1111 of the Civil Code, the law of a foreign legal entity is considered to be the law of the country where this legal entity is established. The civil legal capacity of a foreign legal entity is determined by the law of the country where the legal entity is established. Foreign legal entities carry out in the Republic of Belarus entrepreneurial and other activities regulated by civil legislation in accordance with the rules established by this legislation for such activities of legal entities of the Republic of Belarus, unless the legislation of the Republic of Belarus provides otherwise for foreign legal entities.
By subordination, legal entities are divided into main, subsidiary and dependent.
A business entity is recognized as a subsidiary if another (main) economic company or partnership by virtue of the predominant participation in its authorized capital, or in accordance with the contract concluded between them, or otherwise has the opportunity to determine the decisions taken by such a company. The subsidiary is not liable for the debts of the main company (partnership), and the latter is responsible in solidarity with the subsidiary for its transactions concluded by the subsidiary in pursuance of the mandatory instructions of the main company. In the event of economic insolvency (bankruptcy) of a subsidiary through the fault of the main company (partnership), the latter bears subsidiary liability for its debts.
If losses are caused to the subsidiary through the fault of the main company, the participants (shareholders) of the subsidiary have the right to demand their compensation by the main company (partnership), unless otherwise provided by the legislation on business companies.
A dependent business entity is a business entity in which another business entity has a number of votes in the supreme management body of the dependent company sufficient in accordance with the charter of the dependent company to reject an undesirable decision for it, with the exception of decisions adopted unanimously.
The legislation defines the limits of mutual participation of business companies in each other’s authorized funds and the number of votes that one of these companies can use at the general meeting of participants or shareholders of another company.