What is a simple partnership?

In business practice, it sometimes becomes necessary to organize a joint business, but each of their participants is already an individual entrepreneur or represents an organization. In this case, this form of cooperation, like a simple partnership, comes to the rescue. At the same time, a legal entity is not formed, but participants, like in societies, pool their contributions, and then seek to jointly achieve the goal.

It is clear that such a formation should have its own characteristics, both in legal and tax terms. Let's briefly dwell on them.

Features

It starts with the fact that a simple partnership can be formed only by commercial structures or by individual entrepreneurs. Relationships among the participants in this community are built on the basis of a special agreement. This document is very different from the usual commercial agreements, where each party pursues its benefits, and from the constituent contracts of societies. Here, participants, first, have a common economic interest and an agreed goal, and secondly, they unite deposits without forming a legal entity.

In addition, a simple partnership can not have an official name. If any symbolic name is still assigned to it, then there is nowhere to apply it. This provision fully applies to the seal of the partnership and the stamps.

Control

This partnership can be managed in three ways:

- each participant directs the work on behalf of his comrades;

- Management is conducted jointly, each time a decision is taken collectively;

- management can be carried out through authorized persons acting on the basis of a power of attorney.

It is known from practice that preference is usually given to the third option, and the principle of delegating responsibilities is usually fixed in the original agreement. However, it is possible to appoint an authorized representative and on the basis of an oral agreement.

Termination of an agreement

Naturally, the contract can be dissolved. There are many reasons for this: from the incompetence of one comrade to the achievement of the intended goal by the community. If one of the participants leaves the company, then the simple partnership may not be disbanded: just the shares change and the contract is renewed. If the completion of the work is agreed by all parties, then the accumulated property is divided, and then each one reports separately. If there are no general obligations to third parties, then no one needs to be notified.

Payment of taxes

It is noteworthy that no matter what tax system is used by each comrade, general accounting should be conducted only on the basis of the general taxation regime. And given that a simple partnership is still not a legal entity, the profit tax is paid by each participant in the formation. The profit itself, generated as a result of the activity, should be distributed proportionally to the deposits, unless otherwise stipulated in the contract. But the losses are not distributed and will not help in reducing the tax base.

Accounting of common property and operations can be conducted by one of their participants, but necessarily - a Russian legal entity.

A responsibility

The most difficult question of such formations is the responsibility of comrades. Here the law defines two options. If a simple partnership was created to carry out commercial activities, then the responsibility will be solidary. And the reason for the emergence of obligations is completely unimportant. If entrepreneurial goals are not implied, then everyone will be responsible for all obligations in accordance with the size of the deposits. Naturally, there can be nuances and with each option.