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Set up a General Partnership in Russia

Set up a General Partnership in Russia

Foreign investors can register a general partnership in Russia. Such structure can be incorporated under three types of business forms, each one of them offering different advantages and obligations to its investors. Businessmen who want to open a company in Russia as a general partnership should know that the local legislation allows both natural persons and legal entities to become associates under this structure. Our team of company formation representatives in Russia can offer more details on the regulations referring to the general partnership and can also assist with the incorporation procedures. 

Types of partnerships in Russia  

Those who want to start the procedure of company formation in Russia as a partnership can choose from the following three legal entities: 

  • general partnership;
  • limited partnership;
  • limited liability partnership.

Regulations for general partnerships in Russia  

When opening a general partnership in Russia, investors should first study the regulations of the Russian Civil Code. To start the company incorporation in Russia for this legal entity, the investors will need to sign a foundation agreement, through which the businessmen will become partners

In terms of the company’s liability, the partners will become separately and jointly liable for any debts incurred during their business activities. Such provisions are to be mentioned in the foundation agreement, in which the associates will state the share of assets belonging to each partner and our team of company formation consultants in Russia can offer more details on the legal aspects related to the founding documents. Here are other important aspects:

  • It is necessary to open a bank account for the financial activities of the general partnership in Russia. We help you in this endeavor if you want to set up a company in Russia.
  • All partnership documents must be registered with the relevant local authorities.
  • Once you receive the incorporation documents, you can start activities in the form of a general partnership in Russia.
  • It is required to mention that the partners will become liable for their personal properties only in the situation in which the partnership will not have sufficient assets to overcome the respective financial issue. 

When drawing the founding agreement, the investors will need to notarize the respective document and then, register the legal entity with the Trade Register in Russia; later on, the partnership will also be registered for taxation purposes, as required by the applicable legislation. 

Describing the attributes of a general partnership in Russia

If you want to set up a general partnership in Russia, you may be interested in the following features. This is how you can better understand this business structure available in Russia:

  • Everything starts with a legal agreement between two or more individuals. This document is signed by the partners in front of a notary public.
  • Normally, before signing the general agreement, the partners must agree on the terms of the partnership. It is good to know that profits and liabilities come to the attention of the partners, equally, regardless of the contributions made in the partnership.
  • Besides the money contribution in general partnership in Russia, the partners can also come with other assets, such as properties, business skills, etc.
  • The partners are responsible for the losses and debts in the company. On the other hand, all members benefit from their share of returns.
  • As for taxation in general partnership in Russia, this is done depending on the income received from it. Taxes are paid for each share of income.
  • Having a general partnership in Russia means that the partners share unlimited liability, and this aspect is specified in the agreement.

Key features of general partnerships in Russia

A general partnership is a flexible business structure that can be established by two or more partners. Each of the members is liable for the debts, losses, and assets of such partnership. It is very important to draw up an agreement in this regard, in which all the terms and conditions of the respective partnership are established. Compared to other business structures, the partnership is less expensive.

We invite you to learn more about how to open a company in Russia and especially a general partnership. Our local agents can provide you with information and guidance if you are interested in this business structure.

What are the benefits of a general partnership in Russia?

Local and foreign entrepreneurs can choose to open a general partnership in Russia for several reasons. We mention some benefits of this structure:

  • A general partnership can be activated as soon as the agreement is signed.
  • Investment capital can be brought into the company equally by the partners.
  • Taxation is done according to the income of each partner.
  • With the general partnership in Russia, you can reduce some liability. In this sense, several partners sharing liability might enjoy less risk of individual losses.
  • It can also be a benefit that a general partnership in Russia can be closed easily, as soon as business activities have ceased.

We invite you to discover some data about the Russian economy if you want to open a business in this country in the future:

  • In 2021, Russia was the world’s 11th economic power.
  • Russia’s total GDP was around USD 1.78 trillion in the same year.
  • Around 3.2% was the real disposable income and employment growth.

Please contact our team of company formation agents in Russia for professional assistance on the incorporation of a general partnership.  You can also contact our accountants in Russia if you want to open a company and benefit from complete services.