The Law on Investment Partnership Is Enacted

New Federal Law “On Investment Partnership” No. 335-FZ of 28 November 2011 sets out peculiarities of “simple partnership” agreement being concluded for the purposes of joint investment activity (pursuant to the investment partnership agreement two or more persons (partners) undertake to combine their investments and carry out joint investment activity without forming a legal entity for gaining profits).  This law does not establish new legal forms for legal entities; its provisions directly regulate contractual relationships between co-investors (partners).
 
The law aims at creating legal environment for attracting investments to the Russian economy and implementing investment projects based on the investment partnership agreement. The lawmakers specified that they “wanted to provide for such organizational framework in Russian law that would be analogous to the European collective investment”. Investment partnership structure is intended to combine the advantages of business partnerships with those of simple partnerships having eliminated their respective principal disadvantages.
 
The fundamental principle of the legislative regulation of the agreement is the availability in the structure of the agreement of the maximum possible number of options for the participants of the partnership to establish rules convenient for them.
 
Both profit making and non-profit making organizations can become partners in the investment partnership. Individuals are entitled to join the investment partnership only if they are individual entrepreneurs. In accordance with provisions of the enacted law the same persons may be partners in several investment partnerships. However, it is stipulated that number of partners in the same partnership cannot be more than fifty. In addition, partners in the partnership are not entitled to advertise joint activity and engage new participants in the joint investment activity by means of public offer.
 
The law on investment partnership will become effective on 1 January 2012. Along with the Federal Law in question there was enacted the Federal Law “On Amendment of Specific Legislative Acts in Connection with Enacting of the Federal Law “On Investment Partnership” No. 336-FZ of 28 November 2011 regulating mostly taxation of parties to the agreement on the investment partnership. This Law will also become effective on 1 January 2012.