CIVIL CODE OF THE REPUBLIC OF BELARUS
December 7, 1998 No.218-Z
[Amended as of May 7, 2007]
Adopted by the Chamber of Representatives (October 28, 1998)
Approved by the Council of Republic (November 19, 1998)
CONTENTS
SECTION I. GENERAL PROVISIONS
SUBSECTION 1. BASIC PROVISIONS
CHAPTER 1. Civil Legislation
CHAPTER 2. Origin of Civil Rights and Duties, and Exercise and Defense of Civil Rights
SUBSECTION 2. PERSONS
CHAPTER 3. Citizens (Natural Persons)
CHAPTER 4. Legal persons
§ 1. Basic Provisions
§ 2. Economic Partnerships and Companies
1. General Provisions
2. General Partnership
3. Special Partnership
4. Limited Liability Company
5. Additional Liability Company
6. Joint-Stock Company
7. Subsidiary And Dependent Companies
§ 3. Production Cooperatives
§ 4. Unitary Enterprises
§ 5. Noncommercial Organizations
§ 5. State Associations
CHAPTER 5. Participation of the Republic of Belarus and its Administrative Territorial Units in Relations Regulated by Civil Legislation
SUBSECTION 3. OBJECTS OF CIVIL RIGHTS
CHAPTER 6. General Provisions
CHAPTER 7. Securities
CHAPTER 8. Nonmaterial Benefits and Defense Thereof
SUBSECTION 4. TRANSACTIONS AND REPRESENTATION
CHAPTER 9. Transactions
§ 1. Concept, Types, and Forms of Transactions
§ 2. Invalidity of Transactions
CHAPTER 10. Representation. Power of Attorney
SUBSECTION 5. TERMS. LIMITATION PERIOD
CHAPTER 11. Calculation of Terms
CHAPTER 12. Limitation Period
SECTION II. RIGHT OF OWNERSHIP AND OTHER RIGHTS IN REM
CHAPTER 13. General Provisions
CHAPTER 14. Acquisition of Right of Ownership
CHAPTER 15. Termination of Right of Ownership
CHAPTER 16. Common Ownership
CHAPTER 17. Rights In Rem in Immovable Property
CHAPTER 18. Right of Ownership and Other Rights In Rem in Dwelling Premises
CHAPTER 19. Right of Economic Management, Right of Operative Administration
CHAPTER 20. Defense of Right of Ownership and Other Rights In Rem
SECTION III. GENERAL PART OF THE LEGISLATION OF OBLIGATIONS
SUBSECTION 1. GENERAL PROVISIONS ON OBLIGATIONS
CHAPTER 21. Concept of and Parties to Obligation
CHAPTER 22. Performance of Obligations
CHAPTER 23. Securing Performance of Obligations
§ 1. General Provisions
§ 2. Penalty
§ 3. Pledge
§ 4. Retention
§ 5. Suretyship
§ 6. Guarantee
§ 7. Deposit
CHAPTER 24. Change of Persons in Obligation
§ 1. Transfer of Rights of Creditor to Another Person
§2. Transfer of Debt
CHAPTER 25. Liability for Violation of Obligations
CHAPTER 26. Termination of Obligations
SUBSECTION 2. GENERAL PROVISIONS ON CONTRACT
CHAPTER 27. Concept and Conditions of Contract
CHAPTER 28. Conclusion of Contract
CHAPTER 29. Change and Dissolution of Contract
SECTION IV. INDIVIDUAL TYPES OF OBLIGATION
CHAPTER 30. Purchase-Sale
§ 1. General Provisions on Purchase-Sale
§ 2. Retail Purchase-Sale
§ 3. Delivery of Goods
§ 4. Delivery of Goods for State Needs
§ 5. Agricultural Procurement Contract
§ 6. Electric Power Supply
§ 7. Sale of Immovable Property
§ 8. Sale of Enterprise
CHAPTER 31. Barter
CHAPTER 32. Gift
CHAPTER 33. Rent and Maintenance of Dependent for Life
§ 1. General Provisions on Rent and Maintenance of Dependent for Life
§ 2. Permanent Rent
§ 3. Rent for Life
§ 4. Maintenance of Dependent for Life
CHAPTER 34. Lease
§ 1. General Provisions on Lease
§ 2. Rental
§ 3. Lease of Means of Transport
1. Lease of Means of Transport, With Provision of Services Relating to Driving and Technical Operation (Lease of Means of Transport with Crew)
2. Lease of Means of Transport Without Provision of Services Relating to Driving and Technical Operation (Lease of Means of Transport Without Crew)
§ 4. Lease of Buildings and Installations
§ 5. Lease of Enterprise
CHAPTER 35. Rental of Dwelling Premise
CHAPTER 36. Uncompensated Use
CHAPTER 37. Independent Work
§ 1. General Provisions on Independent Work
§ 2. Domestic Independent Work
§ 3. Construction Independent Work
§ 4. Independent Work Contract for Fulfillment of Design and Survey Work
§ 5. Independent Work Contract Work for State Needs
CHAPTER 38. Fulfillment of Scientific Research, Experimental Design and Technological Work
CHAPTER 39. Compensated Rendering of Services
CHAPTER 40. Carriage
CHAPTER 41. Forwarding
CHAPTER 42. Loan and Credit
CHAPTER 43. Financing Under Cession of Monetary Demand (Factoring)
CHAPTER 44. Bank Deposit
CHAPTER 45. Bank Account
CHAPTER 46. Settlement of Accounts
CHAPTER 47. Storage
§ 1. General Provisions on Storage
§ 2. Storage in Warehouse
§ 3. Special Types of Storage
CHAPTER 48. Insurance
CHAPTER 49. Commission
CHAPTER 50. Actions in Another's Interest Without Commission
CHAPTER 51. Commission Body
CHAPTER 52. Trust Management of Property
CHAPTER 53. Complex Entrepreneurial License (franchise)
CHAPTER 54. Simple Partnership
CHAPTER 55. Public Promise of Reward
CHAPTER 56. Public Competition
CHAPTER 57. Conducting Games and Betting
CHAPTER 58. Obligations as Consequence of Causing Harm
§ 1. General Provisions on Compensation of Harm
§ 2. Compensation of Harm Caused to Life and Health of Citizen
§ 3. Compensation of Harm Caused as Consequence of Defects of Good, Work, or Service
§ 4. Compensation of Moral Harm
CHAPTER 59. Obligations as Consequence of Unfounded Enrichment
SECTION V. EXCLUSIVE RIGHTS FOR RESULTS OF INTELLECTUAL ACTIVITY (INTELLECTUAL PROPERTY)
CHAPTER 60. General Provisions
CHAPTER 61. Copyright and Neighboring Rights
CHAPTER 62. General Provisions on Right of Industrial Property
CHAPTER 63. Right to Invention, Useful Model, Industrial Standard
CHAPTER 64. Rights to New Sorts of Plants and New Breeds of Animals
CHAPTER 65. Right to Layout of Integrated Circuit
CHAPTER 66. Right to Protection of Undisclosed Information from Illegal Use
CHAPTER 67. Means of Individualization of Participants of Civil Turnover, Goods, Works or Services
§ 1. Firm Name
§ 2. Trademark and Service Mark
§ 3. Geographical Indication
CHAPTER 68. Unfair Competition
SECTION VI. INHERITANCE LAW
CHAPTER 69. General Provisions on Inheriting
CHAPTER 70. Inheritance by Will
CHAPTER 71. Inheritance by Operation of Law
CHAPTER 72. Acquisition of Inheritance
CHAPTER 73. Peculiarities of Inheriting of Individual Types of Property
SECTION VII. INTERNATIONAL PRIVATE LAW
CHAPTER 74. General provisions
CHAPTER 75. Collision Norms
§ 1. Persons
§ 2. Law Subject to Application to Personal Non-property Rights
§ 3. Transactions, Representation, Limitation Period
§ 4. Right of Ownership and Other Rights in rem
§ 5. Contractual Obligations
§ 6. Noncontractual Obligations
§ 7. Intellectual Property
§ 8. Inheritance Law
SECTION VIII. FINAL PROVISIONS
SECTION I. GENERAL PROVISIONS
SUBSECTION 1. BASIC PROVISIONS
CHAPTER 1
Civil Legislation
Article 1. Relations Regulated by Civil Legislation
1. The civil legislation determines the legal status of participants of civil turnover, the grounds of arising and the procedure of the exercise of right of ownership and other rights in rem, the rights to the results of intellectual activity, regulates the relations between the persons carrying out the entrepreneurial activity, or the activity with their participation, contractual and other obligations, as well as other property relations and personal non-property relations connected with them.
The entrepreneurial activity is an independent activity of legal and natural persons, implemented by them in civil turnover under their personal name, at their risk and under their property liability, directed at systematic obtaining of profit from using of property, selling the things made, processed or gained by the before-mentioned persons for selling, as well as from performing of works or rendering the services, if these works or services are intended for realization to other persons and are not applied for own consumption.
Family, labor, land relations, relations on using other natural resources and preservation of the environment, conforming the provisions specified in the first and the second parts of this Clause, are regulated by the civil legislation, unless otherwise is provided by the legislation on marriage and family, labor, land and other special legislation.
2. The relations connected with exercise and defense of non-alienable rights and freedoms of the person and other intangible benefits (personal non-property relations, not connected with the property relations), are regulated by civil legislation, as far as otherwise does not follow from the essence of these relations.
3. The participants of relations, regulated by the civil legislation, are the citizens of the Republic of Belarus thereinafter referred to as the citizens), legal persons of the Republic of Belarus thereinafter referred to as the legal persons), the Republic of Belarus, administrative territorial units of the Republic of Belarus thereinafter referred to as the administrative territorial units).
The rules, established by the civil legislation, are applied to the relations with participation of the foreign citizens, stateless persons, foreign and international legal persons (the organizations not being legal persons), foreign states, unless otherwise is determined by the Constitution of the Republic of Belarus and the treaties of the Republic of Belarus.
4. The civil legislation is not applied to the property relations based on administrative or other subordination of one party to another, unless otherwise is provided by the legislation.
Article 2. Main Principles of Civil Legislation.
The main principles of civil legislation include the system of principles, defining and regulating the civil relations.
The civil legislation is founded on the following principles:
all participants of the civil relations, including the state, its bodies and officials, act within the Constitution of the Republic of Belarus and acts of legislation enacted in conformity with it (the principle of supremacy of law);
the direction and co-ordination of state and private economic activity are provided by the state in social purposes (the principle of social orientation of regulation of economic activity);
the implementation of the civil rights shall not contradict the public benefit and safety, cause damage to the environment, historical and cultural values, infringe rights and interests of other persons protected by the law (the principle of priority of the public interests);
the subjects of the civil law participate in civil relations as equals, are equal before the law, cannot enjoy any advantages and privileges contradicting the law, and have the right, without any discrimination, to equal protection of the rights and legal interest (the principle of equality of participants of the civil relations);
the right of ownership, gained by legal way, is protected by the law and is preserved by the state, its inviolability is guaranteed, condemnation is allowed only on motives of the public necessity, subject to conditions and procedures determined by the law, with timely and full indemnification of cost of alienated property, or in accordance with the decision of the court (the principle of inviolability of the property);
the citizens and legal persons are free in conclusion of the contract. Compulsion to conclusion of the contract is not allowed, with the exception of cases when the liability to conclude the contract is provided by the legislation or by voluntary obligation (the principle of freedom of the contract);
honesty and reasonableness of participant of civil legal relations is expected, as far as other is not revealed (the principle of honesty and reasonableness of participant of civil legal relations);
interference in private affairs is prohibited, with the exception of the cases when such interference is implemented on the grounds of legal norms in the interest of national security, public order, protection of moralities, health of the population, rights and freedoms of the other persons (the principle to inadmissibility of arbitrary interference in private affairs);
the citizens and legal persons have the right to implement protection of the civil rights in the court (the economic court) and by other ways provided by the legislation, as well as self-defense of the civil rights, subject to the limits determined in accordance with civil legal norms (the principle of free implementation of the civil rights, ensuring the recovering of the violated rights, judicial protection of rights);
other principle specified in the Constitution of the Republic of Belarus, other acts of legislation, as well as the principles following from the contents and sense of civil legal norms.
The participants of civil legal relations obtain and implement their own civil rights by their own will and in their own interests. They are free in establishing their rights and duties on the basis of the contract, and in determination of any terms and conditions of the contract not contradicting the legislation.
Article 3. Civil Legislation
1.The civil legislation is a system of the normative legal acts containing civil law norms, including:
the legislative acts (the Constitution of the Republic of Belarus, this Code and laws of the Republic of Belarus, decrees and edicts of the President of the Republic of Belarus);
the orders of the President of the Republic of Belarus;
the decisions of the Government of the Republics of Belarus, enacted in accordance with the legislative acts;
the acts of the Constitutional Court of the Republic of Belarus, Supreme Court of the Republic of Belarus, Supreme Economic Court of the Republic of Belarus and National Bank of the Republic of Belarus, enacted within competence of these bodies for regulation of the civil relations established by the Constitution of the Republic of Belarus and other legislative acts enacted in accordance with it;
the acts of ministries, other Republic's bodies of state administration, local bodies of government and self-government, enacted in cases and within the limits provided by the legislative acts, orders of the President of the Republic of Belarus and decisions of the Government the Republic of Belarus.
2. In case of discrepancy of the legislative act with the Constitution of the Republic of Belarus, the Constitution prevails.
In case of discrepancy of the decree or edict of the President of the Republic of Belarus with this Code or another law, this Code or another law prevails only in cases when the authorities for enacting the decree or edict were provided by the law.
The norms of the civil law, contained in other laws, should conform to this Code. In case of discrepancy of those acts with this Code, the latter prevails.
In case of collision (discrepancy) of other acts of civil legislation, the rules established by the legislation of the Republic of Belarus on normative legal acts are applied.
Article 4. Operation of Civil Legislation in Time
Unless otherwise is provided by the Constitution and other legislative acts enacted in conformity with it, the acts of the civil legislation do not retroact and are applied to the relations which arose:
after putting into force of these acts;
before putting into force of these acts, in relation to the rights and duties which arose after putting into force of these acts.
The relations of the parties of a contract, concluded before putting into force of the act the civil legislation, are regulated in accordance with Article 392 of this Code.
Article 5. Application of Civil Legislation by Analogy
1. In cases when the relations provided by Article 1 of this Code are not regulated directly by acts of legislation or by agreement of the parties, the norm of the civil legislation regulating the similar relations (analogia legis) is applied to such relations, as far as such application does not contradict the essence of these relations.
2. In case of impossibility of application of analogia legis in the specified cases, the rights and duties of the parties are to be determined on the basis of main principles and the sense of the civil legislation (analogia juris).
3. It is not allowed to apply by analogy the norms limiting civil rights and establishing the liability.
Article 6. Civil Legislation and Norms of International Law
The Republic of Belarus recognizes the supremacy of generally recognized principles of international law and provides conformity of the civil legislations of the Republic of Belarus to these principles.
Provisions of the civil law, contained in the treaties of the Republic of Belarus, which have came into force, are the part of the civil legislation, which is valid on the territory of the Republic of Belarus, and subject to direct application, except for cases when it follows from the treaty that the enactment of the national legal act is required for application of these provisions. These provisions have the force of the legal act expressing the consent of the Republic of Belarus for the obligatoriness of the appropriate treaty for the Republic of Belarus.
Provisions of the civil law, contained in the treaties of the Republic of Belarus, which have not come into force, may be applied by the Republic of Belarus temporarily in accordance with the procedure established by the legislation on the treaties of the Republic of Belarus.
CHAPTER 2
Origin of Civil Rights and Duties, and Exercise
and Defense of Civil Rights
Article 7. Grounds for Civil Rights and Duties to Arise
1. Civil rights and duties shall arise from the grounds provided for by the legislation, and also from the actions of citizens and legal persons, which although not provided for by a law or such acts but by virtue of the basic principles and sense of civil legislation give rise to civil rights and duties.
In accordance therewith civil rights and duties shall arise:
1) from contracts and other transactions provided for by the legislation, and also from contracts and other transactions which although not provided for by the legislation, are not contrary thereto;
2) from acts of state bodies and bodies of local administration and self-government which have been provided for by the legislation as a ground for civil rights and duties to arise;
3) from a judicial decision which has established civil rights and duties;
4) as a result of creation and acquisition of property on the grounds not prohibited by the legislation;
5) as a result of creation of works of science, literature, art, inventions, and other results of intellectual activity;
6) as a consequence of causing of harm to another person;
7) as a consequence of unfounded enrichment;
8) as a consequence of other actions of citizens and legal persons;
9) as a consequence of events with which the legislation connects the ensuing of civil-law consequences.
2. The rights to property subject to state registration shall arise from the time of registration of the respective rights thereto, unless otherwise established by the legislation.
Article 8. Exercise of Civil Rights
1. Citizens and legal persons shall exercise the civil rights belonging to them at their discretion.
2. The refusal of citizens and legal persons to exercise rights belonging to them shall not entail the termination of those rights except for instances provided for by the legislation.
Article 9. Limits of Exercise of Civil Rights
1. The actions of citizens and legal persons effectuated exclusively with the intention to cause harm to another person, and also abuse of right in other forms, shall not be permitted.
The use of civil rights for the purposes of limiting competition, and also abuse of a dominant position in the market, shall not be permitted.
2. In the event of the failure to comply with the requirements provided for by Clause 1 of this Article, a court, economic court, or arbitration court may refuse to defend the right belonging to the person.
3. The person abusing the right must restore the position of the person, suffered as a result of abuse, and compensate damage caused.
4. In instances when a law makes the defense of civil rights dependent upon whether these rights have been exercised reasonably and in good faith, the reasonableness of the actions and the good faith of the participants of civil legal relations shall be presupposed.
Article 10. Judicial Defense of Civil Rights
1. Protection of violated or contested civil rights is effectuated by the court, the economic court, the arbitration court hereinafter referred to as the court) in accordance with the jurisdiction established by the legislation on the legal procedure, or, in cases provided by the legislation, in accordance with the contract.
2. The legislation or the contract may include provisions stipulating the settlement of the dispute between parties before reference to the court, if such provision does not contradict the legislation.
3. Protection of the civil rights in administrative procedure is effectuated only in cases provided by the legislation. The decision adopted in the administrative procedure may be appealed in the court.
Article 11. Means of Defense of Civil Rights
The defense of civil rights shall be exercised by means of:
1) recognition of the right;
2) restoration of the situation which existed before the violation of the right
3) suppression of actions violating a right or creating a threat to violate it;
4) recognition of a contested transaction to be invalid and the application of the consequences of the invalidity thereof; determination of the fact of nullity of the transaction and the application of the consequences of the invalidity thereof;
5) recognition of an act of a state body or body of local administration or self-government to be invalid;
6) self-defense of right;
7) awarding performance of a duty in kind;
8) compensation of losses;
9) recovery of a penalty;
10) compensation for moral harm;
11) termination or change of legal relation;
12) non-application by court of act of a state body or body of local administration or self-government which is contrary to the legislation;
13) other means provided for by the legislation.
Article 12. Recognizing the Act of State Body or Body of Local Administration or Self-government to be Invalid
A non-normative act of a state body or body of local administration or self-government, and in instances provided for by the legislation, also a normative act, not corresponding to the legislations and violating civil rights and interests of a citizen or legal person, protected by the legislative acts, may be recognized by a court to be invalid, subject to the claim of the person, whose rights were violated, or, in cases provided by the legislation, subject to the claim of other persons. In the event that an act is recognized by a court to be invalid, the violated right shall be subject to restoration or to defense by other means provided for by Article 11 of this Code.
Article 13. Self-Defense of Civil Rights
Defense of the civil rights by direct actions of the person, whose rights are violated, is permissible, if such actions are not connected with breach of the legislation.
Self-defense of the civil rights, effectuated with causing damage in the situation of absolute necessity or necessary defense, is not considered as breach of the legislation, if the actions of the person carrying out the defense were proportional to the character and danger of the violation and did not exceed beyond the limits of prevention or suppression of the violation.
Article 14. Compensation of Losses
1. A person whose right has been violated may demand full compensation of losses caused to him unless compensation of losses in a lesser amount has been provided for by the legislation or contract.
2. By losses are understood the expenses which the person whose right has been violated made or must make in order lo restore the violated right, loss or damage of his property (real damage), and also revenues not received which this person would have received under ordinary conditions of civil turnover if his right had not been violated (lost advantage).
If the person who has violated a right has received revenues as a consequence thereof, the person whose right was violated shall have the right to demand compensation, together with the other losses, for lost advantage in an amount of not less than such revenues.
Article 15. Compensation of Losses Caused by State Bodies
and Bodies of Local Administration or Self-government
Losses caused to a citizen or legal person as a result of the illegal actions (failure to act) of state bodies, bodies of local administration or self-government, or officials of these bodies, including the issuance of the act of a state body or body of local administration or self-government which does not correspond to the legislation, shall be subject to compensation by the Republic of Belarus or by respective administrative territorial unit in accordance with the procedure provided by the legislation.
SUBSECTION 2. PERSONS
CHAPTER 3.
Citizens (Natural Persons)
Article 16. Legal Capacity of Citizens
1. The capacity to have civil rights and to bear duties (civil legal capacity) shall be recognized in equal measure for all citizens.
2. The legal capacity of a citizen shall arise at the time of his birth and be terminated by death.
Article 17. Content of Legal Capacity of Citizens
Citizens may, in accordance with the legislation, have property by right of ownership; inherit and bequeath property; to be engaged in entrepreneurial and any other activity not prohibited by the legislation; create legal persons autonomously or jointly with other citizens and legal persons; conclude any transactions which are not contrary to a legislation, and participate in obligations; select the place of residence; have the rights of authors to works of science, literature and art, inventions and other results of intellectual activity protected by the legislation; and have other property rights and personal non-property rights.
Article 18. Name of Citizen
1.A citizen shall acquire and exercise rights and duties under his own name, including surname and own forename, and also patronymic (if any), unless it arises otherwise from the legislation.
A citizen may use a pseudonym (fictitious name) in the instances and in accordance with the procedure provided for by the legislation.
2.A citizen shall have the right to change his name in accordance with the procedure established by the legislation. The change of name by a citizen shall not be the ground for the termination or change of his rights and duties acquired under the previous name.
A citizen shall be obliged to take necessary measures in order to inform his debtors and creditors about the change of his name and shall bear the risk of the consequences caused by these persons lacking information about the change of his name.
A citizen who has changed name shall have the right to demand the making, at his expense, of respective changes in documents formalized in his previous name.
3. The name received by a citizen at birth, and also a change of name, shall be subject to registration in accordance with the procedure established for the registration of acts of civil status.
4. The acquisition of rights and duties under the name of another person shall not be permitted.
5. Harm caused to a citizen as a result of the incorrect use of his name shall be subject to compensation in accordance with this Code.
In the event of the distortion or of the use of the name of a citizen by means or in a form affecting his honour, dignity, or business reputation, the rules provided for by Article 152 of this Code shall apply.
Article 19. Place of Residence of Citizen
1.The place where a citizen permanently or primarily resides shall be deemed to be the place of residence.
The place of residence of minors who have not attained fourteen years of age or citizens under trusteeship shall be deemed to be the place of residence of their legal representatives — parents, adoptive parents, or trustees.
Article 20. Active Legal Capacity of Citizens
1. The capacity of a citizen by his own actions to acquire and exercise civil rights, to create civil duties for himself, and to perform them (civil active legal capacity) shall arise in full with the ensuing of majority, that is, upon attaining eighteen years of age.
2. When by the legislation the emancipation (Article 26 of this Code) or entry into marriage is permitted before attaining eighteen years of age, a citizen who has not attained eighteen years of age shall acquire civil active legal capacity in full from the time of adoption of the decision on emancipation or entering into marriage.
Active legal capacity acquired as a result of concluding a marriage shall be retained in full also in the event of dissolution of the marriage.
When deeming a marriage to be invalid a court may adopt a decision concerning the loss by the minor spouse of full active legal capacity from the time determined by the court.
3. All citizens shall have equal active legal capacity, unless otherwise established by the legislation.
Article 21. Inadmissibility of Deprivation and Limitation of Legal Capacity and Active Legal Capacity of Citizens
1. No one may be limited in legal capacity and active legal capacity other than in the instances and in accordance with the procedure established by the legislation.
2. The full or partial renunciation, by a citizen, of legal capacity or active legal capacity, and other transactions, directed towards a limitation of legal capacity or active legal capacity, shall be void, except for instances when such transactions are permitted by the legislation.
Article 22. Entrepreneurial Activity of Citizen
1. A citizen shall have the right to engage in entrepreneurial activity without the formation of a legal person from the time of state registration as an individual entrepreneur.
2. The rules of this Code which regulate the activity of legal persons that are commercial organizations shall apply respectively to the entrepreneurial activity of citizens effectuated without the formation of a legal person unless it arises otherwise from the legislation, or the essence of a legal relation.
3. A citizen carrying out entrepreneurial activity without the formation of a legal person in violation of the requirements of Clause 1 of this Article shall not have the right to refer with respect to transactions concluded by him to the fact that he is not an individual entrepreneur. A court may apply to such transactions the rules of this Code on obligations connected with the effectuation of entrepreneurial activity.
Article 23. Property Liability of Citizen
A citizen shall be liable for his obligations with all of the property belonging to him except for property against which execution may not be levied in accordance with the legislation.
A list of the property of citizens against which execution may not be levied shall be established by the civil procedure legislation.
Article 24. Economic Insolvency (Bankruptcy) of Individual Entrepreneur
1. An individual entrepreneur who cannot satisfy the demands of creditors connected with the effectuation by him of entrepreneurial activity may be deemed to be insolvent (bankrupt) by decision of a court.
From the time of rendering of such decision his registration as an individual entrepreneur shall lose force.
2. When effectuating the procedure for deeming an individual entrepreneur to be bankrupt his creditors with regard to obligations not connected with the effectuation of entrepreneurial activity by him also shall have the right to present their demands. The demands of the said creditors not declared by them in this procedure shall retain force after the completion of the bankruptcy proceeding of an individual entrepreneur.
3. The demands of creditors of an individual entrepreneur in the event of him being deemed bankrupt shall be satisfied at the expense of the property belonging to him against which execution may be levied.
4. After completing the settlement of accounts with creditors, the individual entrepreneur deemed to be bankrupt shall be relieved from the performance of residual obligations connected with his entrepreneurial activity and other demands presented for performance and taken into account when deeming the entrepreneur to be bankrupt.
The demands of citizens to whom the citizen declared to be bankrupt bears liability for causing harm to life or health, and also other demands of a personal character, shall retain force.
5. The grounds and procedure for a court to deem an individual entrepreneur to be bankrupt or the declaration by him of his own bankruptcy, and priority of satisfaction of the creditor’s demands shall be established by the legislation on economic insolvency (bankruptcy).
Article 25. Active Legal Capacity of Minors from Fourteen to Eighteen Years of Age
1. Minors in age from fourteen to eighteen years shall conclude transactions, except those named in Clause 2 of this Article, with the written consent of their legal representatives—parents, adoptive parents, or guardian.
A transaction concluded by such a minor shall be valid also in the event of the subsequent written approval thereof by his parents, adoptive parents, or guardian.
2. Minors in age from fourteen to eighteen years shall have the right autonomously, without the consent of the parents, adoptive parents, and guardian, to:
1) dispose of their earnings, scholarships, and other revenues;
2) exercise the rights of an author of a work of science, literature or art, invention, or other result of his intellectual activity protected by the legislation;
3) make deposits in bankd and non-bank credit and financial institutions and dispose of them in accordance with the legislation;
4) conclude petty domestic transactions and other transactions provided for by Article 27(2) of this Code.
Upon attaining sixteen years of age minors also shall have the right to be members of cooperatives in accordance with the acts of legislation on cooperatives.
3. Minors in age from fourteen to eighteen years shall bear property liability for transactions concluded by them in accordance with Clause 1 of this Article; subsidiary liability is imposed on the citizen who has given a written consent on execution of the before-mentioned transaction.
Minors in age from fourteen to eighteen years shall independently bear property liability for transactions concluded by them in accordance with Clause 1 of this Article.
For the harm caused by them such minors shall bear liability in accordance with Chapter 58 of this Code.
4. When there are sufficient grounds a court may, upon the petition of parents, adoptive parents, or guardian or the body of trusteeship and guardianship, limit or deprive a minor from fourteen to eighteen years of age of the right to autonomously dispose of his earnings, scholarship, or other revenues, except for instances when this minor acquired active legal capacity in full in accordance with Article 20(2) of this Code.
Article 26. Emancipation
1.A minor who has attained sixteen years of age may be declared to have full active legal capacity if he works under a labor contract or, with the consent of parents, adoptive parents, or guardian, engages in entrepreneurial activity.
A minor shall be declared to have full active legal capacity (emancipation) by decision of an body of trusteeship and guardianship with the consent of both parents, adoptive parents, or the guardian, or in the absence of such consent, by decision of a court.
2.Parents, adoptive parents, and a guardian shall not bear liability for obligations of an emancipated minor, in particular, for obligations which arose as a consequence of causing of harm by him.
Article 27. Active Legal Capacity of Minors at Age Below Fourteen Years (Juveniles)
1. Transactions, except for those specified in Clause 2 of this Article, may be concluded for minors who have not attained fourteen years of age (juveniles) only in their names by the parents, adoptive parents, or trustees.
The rules provided for by Article 35 (2) and (3) of this Code shall apply to transactions of the legal representatives of a minor with his property.
2. Juveniles in age from six to fourteen years shall have the right to conclude autonomously:
1) petty domestic transactions;
2) transactions directed towards receiving advantages without compensation which do not require notarial certification or state registration;
3) transactions relating to the disposition of assets granted by a legal representative or with the consent of the last by a third person for a specified purpose or for free disposition.
3. Property liability on the transactions carried out by the minor at the age below fourteen years, including the liability on the transactions made by these non-adults autonomously, is imposed on parents, adoptive parents or the trustee of the minor. Liability for the harm caused by the minor at the age below fourteen years, is determined in accordance with the rules of Chapter 58 of this Code.
Article 28. Right for Disposal of Bank Deposits on the Name of Juvenile
The deposits made by anyone on the name of the juveniles, are in the disposal of parents, adoptive parents or trustees thereof, subject to the rules stipulated in Article 35 of this Code.
Article 29. Deeming of Citizen to Lack Active Legal Capacity
1. A citizen who as a consequence of mental insanity (mental disease or dementia) can not understand the meaning of his actions or direct these actions, may be deemed by a court to lack active legal capacity in accordance with the procedure established by the civil procedure legislation. A trusteeship shall be established over him.
2. Transactions in the name of a citizen deemed to lack active legal capacity shall be concluded by his trustee.
If the grounds by virtue of which a citizen was deemed to lack active legal capacity have disappeared, the court shall deem him to have active legal capacity. The trusteeship established over him shall be vacated on the basis of the decision of a court.
Article 30. Limitation of Active Legal Capacity of Citizens
1. A citizen who as a consequence of abusing alcoholic beverages, narcotics or psychotropic substances places his family in a grave material position may be limited in active legal capacity by a court in accordance with the procedure established by civil procedure legislation. A guardianship shall be established over him.
Such citizen shall have the right autonomously to conclude petty domestic transactions.
He may conclude other transactions, and also receive earnings, pension, and other revenues and dispose of them only with the consent of the guardian. However, such citizen shall autonomously bear property liability for transactions concluded by him and for harm caused by him.
2. If the grounds by virtue of which a citizen was limited in active legal capacity have disappeared, a court shall vacate the limitation of his active legal capacity. The guardianship established over the citizen shall be vacated on the basis of the decision of a court.
Article 31. Limitation of Entrepreneurial Activity of Citizen
In the cases provided by the legislative acts, entrepreneurial activity of the citizen (the individual entrepreneur, founder, participant, owner of the property, manager of the legal person etc.) can be judicially limited for the period up to three years.
The citizen, whose entrepreneurial activity is limited, during the full term of the limitation, can not:
implement entrepreneurial activity without establishing the legal person;
by the actions thereof, acquire and implement the rights, establish and fulfill the duties of the owner of the property (the founder, participant) of the legal person;
hold the positions in the executive bodies of the legal persons;
act as the manager of the enterprise and other property used for entrepreneurial activity.
The enterprise and other property, being in the ownership of before-mentioned citizen, can be used by such citizen during the period of limitation for the purposes of entrepreneurial activity solely by transferring this property under the trust.
Article 32. Trusteeship
Trusteeship shall be established over juveniles, and also over citizens deemed by a court to lack active legal capacity as a consequence of mental insanity (mental disease or dementia).
Trustees shall be representatives of the wards by virtue of a law (legal representatives) and conclude all necessary transactions in their name and in their interests.
Article 33. Guardianship
Guardianship shall be established over minors from fourteen to eighteen years of age, and also over citizens limited in active legal capacity by a court as a consequence of abusing alcoholic beverages, narcotics or psychotropic substances.
Guardians shall give consent to the conclusion of those transactions which citizens under guardianship do not have the right to conclude autonomously.
Guardians shall render assistance to wards in the exercise by them of their rights and the performance of duties, and also protect them against abuses on the part of third persons.
Article 34. Guardians and Trustees as Representatives of Wards
The guardians and trustees are appointed in accordance with the procedure established by the legislation, and act as protectors of the rights and interests of their wards in relations with any citizens and organizations, e.g. in the court, without special authorization.
Article 35. Disposition of Property of Ward
1. Revenues of a citizen under wardship, including revenues due to the ward from the management of his property, except for revenues which the ward has the right to dispose of autonomously, shall be expended exclusively by the trustee or guardian in the interests of the ward and with the prior authorization of the body of trusteeship and guardianship.
Without the prior authorization of the body of trusteeship and guardianship the trustee or guardian shall have the right to make expenses necessary to maintain the ward at the expense of amounts which are due to the ward as his revenue.
2. A trustee shall not have the right without the prior authorization of bodies of trusteeship and guardianship to conclude, and a guardian - to give consent to the conclusion of transactions relating to the alienation, including exchange or gift, of the property of the ward, hire (lease) thereof, use free of charge, or pledge, or transactions entailing a waiver of rights which belong to the ward, the separation of his property or an apportionment of a participatory share from it, and also any other transactions entailing a reduction of the property of the ward.
The procedure for the management by a trustee or guardian of the property of a ward shall be determined by the legislation.
3. A trustee and guardian, their spouses and close relatives shall not have the right to conclude transactions with a ward except for the transfer of property to the ward as a gift or for use free of charge, and also to represent the ward when concluding transactions or conducting judicial cases between the ward and a spouse of the trustee or guardian and their close relatives.
Article 36. Trust Management of Property of Ward
1. When the permanent management of immovable and valuable movable property of a ward is necessary, the body of trusteeship and guardianship shall conclude with the manager determined by this body a contract concerning trust management of such property (Chapter 52 of this Code). In this event the trustee or guardian shall retain his powers with respect to that property of the ward which is not transferred to trust management.
In the event of the effectuation by the manager of powers relating to the management of the property of the ward the operation of the rules provided for by Articles 35(2) and (3) of this Code shall extend to the manager.
2. The trust management of the property of a ward shall be terminated on the grounds provided for by Article 907 of this Code, and also in the instances of termination of the trusteeship and guardianship.
Article 37. Patronage of Citizens Who Has Active Legal Capacity
1. At the request of a citizen who has reached majority and has active legal capacity and who by reason of state of health can not autonomously effectuate and defend his rights and perform duties, a guardianship in the form of patronage may be established over him.
2. The guardian assistant (the person carrying out a patronage) of a citizen who has reached majority and who has active legal capacity may be appointed by an body of trusteeship and guardianship only with the consent of this citizen.
3. The disposition of property belonging to a ward who has reached majority and who has active legal capacity shall be effectuated by the guardian assistant on the basis of a contract of commission or trust management concluded with the ward. The conclusion of domestic transactions and other transactions directed towards maintenance and the satisfaction of domestic requirements of the ward shall be effectuated by his guardian assistant with the consent of the ward.
4. Patronage over a citizen who has reached majority and who has active legal capacity established in accordance with Clause 1 of this Article shall be terminated at the demand of the citizen who is under patronage.
Article 38. Deeming of Citizen to be Missing
A citizen may, upon the application of interested persons, be deemed by a court to be missing if within one year there is no information at his place of residence concerning his whereabouts. When it is impossible to determine the date of receipt of the last information concerning the absent person, the commencement of calculation of the Term for deeming a person to be missing shall be considered to be the first date of the month following that in which the last information was received concerning the missing person, and when it is impossible to establish this month, the first of January of the following year.
Article 39. Consequences of Deeming Citizen to be Missing
1. The property of a citizen deemed to be missing shall, when permanent management is necessary, on the basis of the decision of a court be transferred to the person who is determined by the body of trusteeship and guardianship and shall operate on the basis of a contract on trust management concluded with this body.
2. The trustee of the property belonging to the citizen deemed to be missing undertakes performance of this citizen’s obligations, repays the debts of the citizen deemed to be missing at the expense of the property belonging to this citizen, manages this property on behalf of this citizen. Subject to the application of the interested persons, the allowance is paid for the citizens, which are subject to maintenance by the citizen deemed to be missing.
3. An body of trusteeship and guardianship may also before the expiry of a year from the date of receiving information about the whereabouts of the missing citizen appoint a manager of his property.
4. The consequences of deeming a person to be missing which are not provided for by this Article shall be determined by the legislation.
Article 40. Vacating the Decision on Deeming Citizen to be Missing
1. In the event of the appearance or discovery of the whereabouts of a citizen deemed to be missing a court shall vacate the decision deeming him to be missing. The trust management of the property of this citizen shall be vacated on the basis of the decision of the court.
2. If, after three years after the day of appointment of the trustee, the decision on deeming the citizen to be missing was not vacated, and there was no application to the court for declaring the citizen to be deceased, the body of guardianship and trusteeship must apply to the court with the application for declaring the citizen to be deceased.
Article 41. Declaration of Citizen to be Deceased
1. A citizen may be declared by a court to be deceased if there is no information at his place of residence concerning his whereabouts in the course of five years, and if he was missing under circumstances threatening death or giving grounds to suppose he perished from a specific accident, within six months.
2. A military serviceman or other citizen who is missing in connection with military actions may be declared by a court to be deceased not earlier than upon the expiry of two years from the date the military actions end.
3. The date of death of a citizen declared to be deceased shall be considered to be the date of entry into legal force of the decision of the court declaring him to be deceased. In the event a citizen is declared to be deceased who is missing under circumstances threatening death or giving grounds to suppose he perished in a specific accident, the court may deem the date of death of this citizen to be the date of the presupposed perishing.
4. Declaring the citizen to be deceased implies the same consequences in relation to the rights and duties of such citizen, as death of the citizen.
Article 42. Consequences of Appearance of Citizen Declared to be Deceased
1. In the event of the appearance or discovery of the whereabouts of a citizen declared to be deceased, the court shall vacate the decision declaring him to be deceased.
2. Irrespective of the time of his appearance, a citizen may demand from any person the return of property preserved which passed to this person without compensation after the declaration of the citizen to be deceased, except for instances provided for by Article 283(3) of this Code.
Persons to whom property of a citizen declared to be deceased has passed according to transactions for compensation shall be obliged to return this property to him if it is proved that, in acquiring the property, they knew that the citizen declared to be deceased is alive. If it is impossible to return such property in kind, the value thereof shall be compensated. If the property of the citizen, declared to be deceased, has been transferred to the state as escheat and was sold by the state with observance of conditions provided by this Article, then, after vacating of the decision on declaring the citizen to be deceased, the money sum earned as a result of selling of the property, shall be returned to the citizen.
Article 43. Registration of Acts of Civil Status
l. The following acts of civil status shall be subject to registration:
1) birth;
2) conclusion of marriage;
3) dissolution of marriage;
4) adoption;
5) establishment of maternity and/or paternity;
6) change of name;
7) death of a citizen.
2. Acts of civil status shall be registered by bodies registering acts of civil status by means of making respective entries in the book for the registration of acts of civil status and the issuance to citizens of certificates on the basis of these entries.
3. The correction and the changing of entries of acts of civil status shall be done by the body registering acts of civil status when there are sufficient grounds and the absence of a dispute between interested persons.
When there is a dispute between interested persons, or the refusal of an body for the registry of acts of civil status to correct or change an entry, the dispute shall be settled by a court.
The annulment and restoration of entries of acts of civil status shall be done by the body for the registry of acts of civil status on the basis of the decision of a court.
4. Bodies registering acts of civil status, the procedure for the registration of these acts, the procedure for the change, addition, correction, restoration, and annulment of entries of acts of civil status, the forms of the books for registration of acts of civil status, the procedure and periods for storage of such books, as well as forms of certificates on the registration of acts of civil status shall be determined by the legislation.
CHAPTER 4
Legal persons
§ 1. Basic Provisions
Article 44. Concept of Legal Person
1. A legal person shall be deemed to be an organization which has solitary property in ownership, economic management, or operative administration and is liable for its obligations with such property and may in its own name acquire and exercise property rights and personal non-property rights, bear duties, and be a plaintiff or defendant in court. Legal persons must have an autonomous balance sheet.
2. In connection with participation in the formation of the property of a legal person its founders (participants) may have rights of obligations with respect to this legal person or rights to a thing with respect to its property.
То legal persons with respect to which the participants thereof have rights of obligations shall be relegated: economic partnerships and companies; production and consumer cooperatives. The participants of such legal persons can have rights to a thing only for the property, which they have transferred to the legal persons for using as contribution to the charter capital.
To legal persons with respect to whose property the founders thereof have the right of ownership or other right to in rem shall be relegated unitary enterprises, including subsidiary enterprises, and also state associations and institutions financed by the owner.
3. To legal persons with respect to which the founders (participants) thereof do not have property rights belong: social and religious organizations (associations); charitable and other funds; associations of legal persons and (or) of individual entrepreneurs (associations and unions), and other noncommercial organizations unless otherwise established by this Code, other laws or acts of President of the Republic of Belarus.
In the instances stipulated by the laws or acts of the President of the Republic of Belarus, the administrative and territorial units may have property rights in relation to commercial organization, including when they are not their founders (participants).
Article 45. Legal Capacity of Legal Person
l. A legal person may have civil rights corresponding to the purposes of the activity provided for in its constituent documents and subject of activity specified in the constituent documents, and shall bear the duties connected with such activity. A legal person may engage in individual types of activity, a list of which is determined by the legislative acts, only on the basis of a special authorization (license).
2. A legal person may be limited in rights only in the instances and in the procedure provided for by the legislation. A decision concerning limitation of rights may be appealed by a legal person to a court.
3. The legal capacity of a legal person shall arise at the time of its creation (Article 47(2)) and shall terminate at the time of the completion of its liquidation (Article 59(8)).
The right of a legal person to carry out activity the engagement in which requires a special permit (license) shall arise from the time of the receipt of such special permit (license) or within the period specified therein and shall terminate upon the expiry of the period of its validity, unless otherwise established by the legislation.
Article 46. Commercial and Noncommercial Organizations
1. Organizations pursuing the deriving of profit as the principal purpose of their activity (commercial organizations) or not having the deriving of profit as such purpose and not distributing profit received among the participants (noncommercial organizations) may be legal persons.
2. Legal persons which are commercial organizations may be created in the form of economic partnerships and companies, production cooperatives, unitary enterprises, and peasant (farming) households and in other forms stipulated by this Code.
The activity of peasant (farming) households is regulated by this Code and other acts of legislation.
3. Legal persons which are noncommercial organizations may be created in the form of consumer cooperatives, social or religious organizations (associations), institutions financed by the owner, charitable and other funds, and also in other forms provided for by the acts of legislation.
The noncommercial organizations can be formed for achievement of social, nature-protective, charitable, cultural, educational, scientific and managing purposes, health care, development of physical culture and sport, satisfaction of spiritual and other non-material needs of the citizens, protection of the rights and legal interests of the citizens and legal persons, solving of disputes and conflicts, rendering legal assistance in accordance with the legislation, and for other purposes, aimed on achievement of the public wealth.
The nonprofit organizations can be formed for satisfaction of material (property) needs of the citizens, or citizens and legal persons, in cases provided by this Code and other legislative acts.
The nonprofit organizations may effectuate entrepreneurial activity only insofar as this is necessary for their charter purposes for which these organizations were formed, correspond with these purposes and meet the subject of activity of the noncommercial organization, or insofar such activity is necessary for the accomplishment of missions meaningful for the state, stipulated in their constituent documents, corresponds with these missions and meets the subject of activity of these organizations. For some specific forms of noncommercial organizations, the requirements can be stipulated by the legislative acts, providing for the right for engaging in entrepreneurial activity only by means of forming of commercial organization and (or) participation in such organization.
4. It is permitted the creation of associations of commercial organizations and (or) of individual entrepreneurs, as well as associations of commercial and (or) noncommercial organizations in the form of associations and unions and associations of commercial organizations and (or) of individual entrepreneurs in the form of state association.
In accordance with the legislative acts, the legal persons of the Republic of Belarus may form the associations, including those with participation of the foreign legal persons, in the form of financial-industrial and other economic groups, in accordance with the procedure and subject to conditions determined by the legislation on such groups.
In the instances provided for by the legislative acts, the associations of commercial and noncommercial organizations and/or natural persons may be created in other forms.
Article 47. State Registration of Legal Persons
1. A legal person shall be subject to state registration in accordance with the procedure determined by the legislation. The data of state registration, including, for commercial organizations, the firm name, shall be included, in accordance with the legislation, in the Unified State Register Of Legal persons And Individual Entrepreneurs, which shall be available for general familiarization. A violation of the procedure established by the legislation for the formation of a legal person or the failure of its constituent documents to conform to law shall entail refusal of the state registration of the legal person. The refusal of state registration for reasons of unpracticality is not allowed unless otherwise provided by legislative acts. The refusal of state registration, and also the evasion of such registration, may be appealed to a court.
2.The legal person shall be considered to be created from the time of the state registration thereof.
3. The legal person shall be subject to re-registration in cases provided by the legislative acts.
4. The natural person or the legal person shall be entitled to obtain the information, being kept in the Unified State Register of Legal persons and Individual Entrepreneurs, in accordance with the procedure and in cases defined by the legislation.
Article 471. Charter Capital of Commercial Organization
1. At the formation of the commercial organization, the charter capital of this organization shall be formed in accordance with the procedure established by the legislation. The amount of the charter capital for the commercial organization shall not be less than the minimum amount stipulated by the legislation.
2. The contribution in the charter capital of the commercial organization may include things, including money and securities, other property, including the property rights, or other alienable rights, having the money evaluation.
The money evaluation of the contribution in the charter capital of the commercial organization is subject to the expert investigation in cases and in accordance with the procedure provided by the legislation.
The property cannot be contributed in the charter capital of the commercial organization, if the right for alienation of this property is limited by the owner, by the legislation or by the contract.
The legislative acts may establish other restrictions concerning the property contributed in the charter capital of the commercial organization.
3. If, after expiration of the second and of each following fiscal year, the cost of net assets of the commercial organization is less than the charter capital, such organization shall be obliged to declare and register, in accordance with existing procedure, the reduction of its charter capital. If the cost of these assets is less than the minimum amount of the charter capital stipulated by the legislative acts, the commercial organization is subject to liquidation in accordance with existing procedure.
Article 48. Constituent Documents of Legal Person
1. A legal person shall operate on the basis of a charter, or the Articles of Incorporation and a charter, or the Articles of Incorporation only.
The Articles of Incorporation of a legal person shall be concluded, and the charter shall be confirmed, by its founders (participants).The legislative acts may establish other procedure for the confirmation of the Articles of Incorporation of legal persons.
A legal person created in accordance with this Code by single founder shall operate on the basis of a charter confirmed by this founder.
2. The name of the legal person, its location, the purposes of activity, the procedure for the management of the activity of the legal person must be determined in the constituent documents of the legal person, and also they shall contain other information provided for by the law for legal persons of the respective type. The subject of activity of the legal person must be determined in the constituent documents of noncommercial organizations and unitary enterprises, and in the instances provided for by the legislation, also in the constituent documents of other commercial organizations. The subject of the activity of a commercial organization may be determined by the constituent documents of other commercial organizations also in instances when according to the legislation this is not obligatory.
In the Articles of Incorporation the founders shall undertake to create a legal person and determine the procedure for joint activity relating to its creation and the conditions for the transfer of their property to it and participation in its activity. The conditions and procedure for distribution among the participants of profit and losses, the management of activity of the legal person, and the withdrawal of founders (participants) from the composition thereof shall also be determined by the Articles of Incorporation. Other terms and conditions can be included in the Articles of Incorporation, subject to the consent of the founders.
3. Changes of constituent documents shall acquire force for third persons from the time of state registration, and in the instances established by the legislation, from the time of informing the body carrying out state registration of such changes. However, legal persons and their founders (participants) shall not have the right to refer to the lack of registration of such changes in relations with third persons who have acted taking these changes into consideration.
Changes of constituent documents of Republic's state-social associations shall acquire force for third persons from the time of the entry into force of legal acts which approve such changes.
Article 49. Bodies of Legal Person
1. A legal person shall acquire civil rights and assume civil duties through its bodies operating in accordance with the legislation and the constituent documents. The procedure for the appointment or election of the bodies of a legal person shall be determined by the legislative acts and the constituent documents.
2. In the instances provided for by the legislative acts a legal person may acquire civil rights and assume civil duties through its participants.
3. A person who by virtue of a law or constituent documents of a legal person acts in its name must operate in the interests of the legal person represented by him in good faith and reasonably. He shall be obliged at the demand of the founders (participants) of the legal person, unless otherwise provided by the legislative acts or contract, to compensate losses caused by him to the legal person.
Article 50. Name and Location of Legal Person
1. A legal person shall have its own name containing an indication of its organizational legal form. The names of noncommercial organizations and unitary enterprises, and in the instances provided for by the legislative acts, of other commercial organizations, must contain an indication of the character of activity of the legal person.
Inclusion of the references to the official full or shortened name of the Republic of Belarus in the name of the legal person, inclusion of such name or the elements of the national symbols in the requisites of the documents or in the advertising materials of the legal person is allowed in accordance with the procedure determined by the President of the Republic of Belarus.
2. The location of a legal person shall be determined by the place of its state registration, unless otherwise established in accordance with a law in the constituent documents of the legal person.
3. The name and location of a legal person shall be specified in its constituent documents.
4. A legal person which is a commercial organization must have a firm name.
A legal person whose firm name has been registered in the established procedure shall have the exclusive right to the use thereof.
The procedure for registration and use of firm names shall be determined by the legislative acts.
A person who unlawfully uses another's registered firm name shall be obliged, at the demand of the possessor of the right to the firm name, to terminate the use thereof and compensate the losses caused.
Article 51. Representative Offices and Branches
1. A solitary subdivision of a legal person situated outside the location thereof which represents the interests of the legal person and effectuates the defense thereof shall be a representative office.
2. A solitary subdivision of a legal person situated outside the location thereof and carrying out all or part of its functions, including the function of representative office, shall be a branch.
Representative offices and branches shall not be legal persons. They shall be endowed with property by the legal person which created them and shall operate on the basis of Regulations confirmed by it.
The property of the representative offices or branches of the legal person is considered separately on the balance of the legal person, which has created these representative offices or branches.
The heads of representative offices and branches shall be appointed by the legal person and operate on the basis of the power of attorney thereof.
Representative offices and branches must be specified in the constituent documents of the legal person which has created them.
Article 511. Representative Offices of Foreign Organization
The representative office of the foreign organization is the solitary subdivision of this organization, located on the territory of the Republic of Belarus, carrying out the defense and representation of interests of the foreign organization and other functions not contradicting the legislation.
Forming of the representative offices of the foreign organization, the activity of which is aimed on overthrowing or forcible change of the constitutional system, breach of integrity and safety of the state, propaganda of war or violence, promotion of national, religious and racial hostility, and of the foreign organizations, the activity of which can cause damage for the rights and legal interests of the citizens, is prohibited.
2. The representative office of the foreign organization is considered formed on the territory of the Republic of Belarus since the date of obtaining the permission for its formation in accordance with the procedure established by the legislation.
In the legislation, the restrictions on entrepreneurial and other activities of the representative offices of the foreign organizations can be stipulated.
3. The representative office of the foreign organization shall have the name, containing the indication of the foreign organization, which has formed this representative office.
Article 52. Liability of Legal Person
1. Legal persons, except for those being financed by the owner of institutions, shall be liable for their obligations with all of the property belonging to them.
2. A fisc enterprise and an institution being financed by the owner shall be liable for its obligations in accordance with the procedure and on the conditions established by Article 113(5) and Articles 115 and 120 of this Code.
3. The founder (participant) of a legal person or the owner of its property shall not be liable for obligations of the legal person, and the legal person shall not be liable for the obligations of the founder (participant) or owner, except for the instances provided for by legislative acts or by the constituent documents of the legal person.
If the economic insolvency (bankruptcy) of a legal person has been caused by the owner of the property of the legal person, by the founders (participants) or or by other persons, including the head of the legal person, who have the right to give instructions which are binding upon this legal person or have the possibility to determine otherwise its actions, subsidiary liability for its obligations may be placed upon such persons in the event of insufficiency of the property of the legal person.
Article 53. Reorganization of Legal Person
1. The reorganization of a legal person (merging, affiliation, splitting-up, splitting-off, transformation) may be effectuated by decision of its founders (participants) or the body of the legal person authorized therefor by the constituent documents.
2. In the instances established by the legislative acts the reorganization of a legal person shall be effectuated by decision of authorized state bodies, including the decision of a court.
If the founders (participants) of a legal person, body authorized by them, or body of the legal person authorized to reorganize it by its constituent documents does not effectuate the reorganization of the legal person within the period specified in the decision of the authorized state body, the court upon the suit of the said state body shall appoint an external administrator of the legal person and charge him with carrying out the reorganization of this legal person. From the time of appointment of the external administrator to him shall pass the powers relating to managing the affairs of the legal person. The external administrator shall act in the name of the legal person in court, draw up the splitting balance sheet or the transfer act and transfer it for consideration of the court together with the constituent documents of the legal persons arising as a result of the reorganization. The confirmation by the court of the said documents shall be the grounds for state registration of the newly arisen legal persons.
3. In the instances established by the legislative acts the reorganization of legal persons may be effectuated only with the consent of authorized state bodies.
4. The legal person shall be considered to be reorganized, except for instances of reorganization in the form of affiliation, from the time of state registration of the legal persons which have arisen anew.
In the event of the reorganization of a legal person in the form of affiliation thereto of another legal person, the first of them shall be considered to be reorganized from the time of making an entry in the Unified State Register of Legal persons and Individual Entrepreneurs concerning the termination of the activity of the affiliated legal person.
Article 54. Legal Succession in Event of Reorganization of Legal persons
1. In the event of merging of legal persons the rights and duties of each of them shall pass to the legal person which newly arises in accordance with the act of transfer.
2. In the event of affiliation of a legal person to another legal person, to the latter shall pass the rights and duties of the affiliated legal person in accordance with the act of transfer.
3. In the event of splitting-up of a legal person its rights and duties shall pass to the legal persons which newly arise in accordance with the splitting balance sheet.
4. In the event of splitting-off from a legal person of one or several legal persons, to each of them shall pass the rights and duties of the reorganized legal person in accordance with the splitting balance sheet.
5. In the event of transformation of a legal person of one type into a legal person of another type (change of organizational legal form), to the legal person which arises anew shall pass the rights and duties of the reorganized legal person in accordance with the act of transfer.
Article 55. Act of Transfer and Splitting Balance Sheet
1. The act of transfer and splitting balance sheet must contain provisions concerning legal succession regarding all obligations of the reorganized legal person with respect to all creditors and debtors thereof, including obligations being contested by the parties.
2. The act of transfer and splitting balance sheet shall be confirmed by the founders (participants) of the legal person or by the body which adopted the decision concerning reorganization of the legal persons and shall be submitted together with the constituent documents for the registration of the legal persons which newly arose or for making changes in the constituent documents of existing legal persons.
The failure to submit with the constituent documents the act of transfer or splitting balance sheet respectively, and also the absence therein of provisions concerning legal succession with regard to the obligations of the reorganized legal person, shall entail a refusal of state registration of the legal persons which newly arose.
Article 56. Guarantees of Rights of Creditors of Legal Person in the Event of its Reorganization
1. The founders (participants) of the legal person or body which adopted the decision concerning the reorganization of a legal person shall be obliged to inform in writing the creditors of the legal person being reorganized thereof.
The creditor of the legal person being reorganized shall have the right to demand for the termination or the performаnсе of the obligation before due time, the debtor with regard to which this legal person is, and for compensation of losses.
3. If the splitting balance sheet does not make it possible to determine the legal successor of the reorganized legal person, the legal persons which newly arose shall bear joint and several liability for the obligations of the reorganized legal person to its creditors.
Article 57. Liquidation of Legal Person
1. The liquidation of a legal person shall entail the termination thereof without the transfer of rights and duties by way of legal succession to other persons.
2. A legal person may be liquidated by:
1) decision of its founders (participants) or the body of the legal person authorized by the constituent documents, including such decision in connection with the expiry of the term for which the legal person was created, achievement of the purpose for which it was created, or the deeming by a court of the registration of the legal person to be invalid in connection with violations of the legislations committed during its creation if such violations cannot be eliminated;
2) decision of a court in the event of
failure to adopt the decision on liquidation in accordance with Subclause 1 of this Clause because of expiration of the term, for which the legal person was created, or achieving the purposes, for which the legal person was created;
reduction of the cost of net assets of the commercial organization, in accordance with the results of the second and each following fiscal year, below minimum amount of the charter capital, established by the legislation;
effectuation of the activity without special permit (license), or activity prohibited by the legislation, or other repeated or gross violations of the legislation, or systematic effectuation of activity, contradictory to the statute purposes of the legal person, or declaring the registration of the legal person void and null by the court because of violations of the legislation, which were committed during creation of the legal person, and in other cases provided by the legislative acts;
3) decision of other bodies, in cases provided by the legislative acts.
3. A demand concerning liquidation of a legal person on the grounds specified in Clause 2 of this Article may be presented to a court by a state body or body of local administration or self-government to which the right to submit such demand has been granted by the legislation.
Duties relating to the effectuation of the liquidation of a legal person may be placed by decision of a court concerning the liquidation of a legal person on its founders (participants), or body authorized to liquidate the legal person by its constituent documents.
4. A legal person which is a commercial organization or operating in the form of a consumer cooperative, charitable or other fund shall also be liquidated in accordance with Article 61 of this Code as a consequence of its being deemed to be insolvent (bankrupt).
If the value of the property of such a legal person is insufficient to satisfy the demands of creditors, it may be liquidated only in accordance with the procedure provided for by Article 61 of this Code.
The provisions on the liquidation of legal persons as a consequence of economic insolvency (bankruptcy) shall not extend to fisc enterprises.
5. In the instances established by the legislation the liquidation of legal persons may be carried out only with consent of authorized state bodies.
Article 58. Duties of Person Which Adopted Decision Concerning Liquidation of the Legal Person
1. The founders (participants) of a legal person or body which adopted the decision concerning liquidation of the legal person shall be obliged to notify immediately, in writing, the body which effectuates the state registration of legal persons, which shall place the information in the Unified State Register of Legal persons and Individual Entrepreneurs, concerning the fact that the legal person is being liquidated.
2. The founders (participants) of a legal person or body which has adopted the decision concerning the liquidation of a legal person shall appoint by agreement with the body carrying out the state registration of legal persons a liquidation commission (liquidator) and establish in accordance with this Code the procedure and periods of liquidation.
3. From the time of the appointment of the liquidation commission the powers relating to the management of the affairs of the legal person shall pass to it. The liquidation commission shall act in the court in the name of the legal person being liquidated.
Article 59. Procedure for Liquidation of Legal Person
l. The liquidation commission shall place in printed media in which the data concerning the registration of legal persons are published, a publication concerning liquidation of the legal person and the procedure and periods for declaring demands by its creditors. This period may not be less than two months from the time of the publication concerning liquidation.
The liquidation commission shall take measures to elicit creditors and receive debtor indebtedness, and also inform creditors in writing concerning the liquidation of a legal person.
2. After expiration of the term for submission of demands by creditors, the liquidation commission shall draw up the intermediate liquidation balance sheet, which shall contain information concerning the composition of the property of the legal person being liquidated, a list of demands submitted by creditors, and also the results of consideration of these demands.
The intermediate liquidation balance sheet shall be confirmed by the founders (participants) of the legal person or body which adopted the decision concerning the liquidation of the legal person.
3. If the monetary means of legal person being liquidated (except for institutions) are insufficient to satisfy the demands of creditors, the liquidation commission shall effectuate the sale of the property of the legal person at public sales in accordance with the procedure established for the execution of judicial decisions.
4. The payment of monetary amounts to creditors of a legal person being liquidated shall be by the liquidation commission in the order of priority established by Article 60 of this Code and in accordance with the intermediate liquidation balance sheet, starting from the date of its confirmation, except for creditors of the fifth priority, payment to whom shall be made upon the expiry of a month from the date of confirmation of the intermediate liquidation balance sheet.
5. After completion of the settlement of accounts with creditors, the liquidation commission shall draw up the liquidation balance sheet, which shall be confirmed by the founders (participants) of the legal person or by the body which adopted the decision concerning the liquidation of the legal person.
6. In the event that the property of a fisc enterprise being liquidated, or the monetary means of the institution being liquidated are insufficient for satisfaction of the demands of creditors, the latter shall have the right to bring suit in a court to satisfy the remaining part of the demands at the expense of the owner of the property of this enterprise or institution.
7. The property of legal person, remaining after the satisfaction of the demands of creditors, shall be transferred to the founders (participants) thereof, having rights to a thing in this property or rights of obligations with respect to this legal person, unless otherwise provided by the legislative acts or the constituent documents of the legal person.
8. The liquidation of a legal person shall be considered to be completed and the legal person to have terminated existence after the making of entries thereof in the Unified State Register of Legal persons and Individual Entrepreneurs.
Article 60. Satisfaction of Demands of Creditors
l. When liquidating a legal person the demands of its creditors shall be satisfied in accordance with the following priority:
1) first, the demands of citizens to whom the legal person being liquidated bears liability for the causing of harm to life or health by means of capitalizing the respective time payments shall be satisfied;
2) second, accounts shall be settled with regard to the payment of severance benefits and the payment for labor with persons who work under a labor contract and with regard to the payment of remuneration under authors' contracts;
3) third, the indebtedness relating to obligatory payments to the budget and extrabudgetary funds shall be paid;
4) fourth, the demands of creditors relating to obligations secured by the pledge of property of the legal person being liquidated shall be satisfied;
5) fifth, accounts shall be settled with other creditors in accordance with the legislation.
The priority of satisfaction of demands of creditors in the course of liquidation of banks and non-bank credit and financial institutions is determined takin in account specific features stipulated by banking legislation.
2. The demands of each priority shall be satisfied after the full satisfaction of demands of the preceding priority.
3. In the event the property of a legal person being liquidated is insufficient, it shall be distributed among the creditors of the respective priority in proportion to the amounts of demands subject to satisfaction, unless otherwise established by the legislative acts.
4. In the event of the refusal of the liquidation commission to satisfy the demands of a creditor or the evasion of the consideration thereof, a creditor shall have the right before confirmation of the liquidation balance sheet of the legal person to bring suit against the liquidation commission in court. By decision of the court the demands of the creditor may be satisfied at the expense of the residual property of the legal person being liquidated.
5. Demands of a creditor submitted after the expiry of the term established by the liquidation commission for the submission thereof shall be satisfied from the property of the legal person being liquidated remaining after the satisfaction of the demands of creditors submitted within the specified term.
Demands of creditors not satisfied because of the insufficiency of the property of the legal person being liquidated shall be considered to be paid, except for the case provided for in the Article 62 of this Code. Demands of creditors not recognized by the liquidation commission, if the creditor has not brought suit in court, and also demands, the satisfaction of which has been refused to a creditor by decision of a court, also shall be considered to be paid.
Article 61. Economic Insolvency (Bankruptcy) of Legal Person
1. A legal person which is a commercial organization, except for a fisc enterprise, and also a legal person operating in the form of a consumer cooperative or charitable or other fund, may, by decision of a court, be deemed to be insolvent (bankrupt) if it can not satisfy the demands of creditors.
The deeming of a legal person to be bankrupt by a court shall entail its sanation, or, in case of impossibility or absence of grounds for continuation of its activity, liquidation.
In case of declaring the legal person to be economically insolvent (the bankrupt), the legal person is subject to the sanation, or, in case of impossibility or absence of grounds for continuation of the activity, the legal person is subject to the liquidation.
2. The grounds for deeming a legal person to be bankrupt by a court, or declaring its own bankruptcy, and also the procedure for its sanation or liquidation shall be established by the legislation on economic insolvency (bankruptcy).
Article 62. Levying the Execution upon the Property Belonging to the Legal Person after the Liquidation of this Person
If, after liquidation of the legal person, it would be proved that this legal person, with the purposes of avoidance of the liability to the creditors, has transmitted to other person or otherwise has intentionally hidden at least part of the property, the creditors, which have not obtained complete satisfaction of the claims within the limits of liquidation proceedings, have the right to levy execution upon this property for the non-paid part of the debt. In this case, the provisions of Article 284 of this Code are accordingly applied. The person, to which the property was transferred, is considered to be unfair, if this person was informed or should have been informed on the intention of the legal person to hide the property from the creditors.
§ 2. Economic Partnerships and Companies
1. General Provisions
Article 63. Basic Provisions on Economic Partnerships and Companies
1. Commercial organizations with a charter capital divided into participatory shares (stocks) of the founders (participants) shall be deemed to be economic partnerships and companies. The property created at the expense of contributions of the founders (participants), and also produced and acquired by the economic partnership or company in the process of its activity, shall belong to it by right of ownership.
2. Economic partnerships may be created in the form of a general partnership and special partnership.
3. Economic companies may be created in the form of a joint-stock company, limited liability company, or additional liability company.
4. Individual entrepreneurs and (or) commercial organizations may be participants of general partnerships and may be general partners in special partnerships.
Citizens and/or legal persons may be participants of economic companies and contributors to special partnerships.
State bodies and bodies of local administration or self-government shall not have the right to act as participants of economic companies and contributors to special partnerships unless otherwise established by the legislation.
Unitary enterprises, state associations and institutions financed by owners may be participants of economic companies and contributors to special partnerships with the authorization of the owner (body authorized by the owner) unless otherwise established by the legislative acts.
The participation of individual categories of citizens in economic partnerships and companies may be prohibited or limited by the legislation.
5. Economic partnerships and companies may be the founders (participants) of other economic partnerships and companies except for instances provided for by the legislation.
6. The monetary value of the contribution of a participant of an economic company shall be made by agreement between the participants (founders) of the company and in the instances provided for by laws shall be subject to expert verification.
7. Excluded.
Article 64. Rights and Duties of Participants of Economic Partnership or Company
1. The participants of an economic partnership or company shall have the right to:
1) participate in the management of the affairs of the partnership or company, except for instances provided for by Article 83(2) of this Code and by the legislative acts;
2) receive information concerning the activity of the partnership or company and familiarize themselves with its bookkeeping records and other documentation in accordance with the procedure established by the constituent documents;
3) take part in the distribution of profit;
4) receive in the event of the liquidation of the partnership or company the part of the property remaining after the settlement of accounts with creditors or the value thereof.
The participants of an economic partnership or company also may have other rights provided for by the legislation on economic partnerships and companies, or constituent documents of a partnership or company.
2. In case of withdrawal or expulsion of the participant from the business partnership or company (with the exception of the participant of the join-stock company), the cost of the part of property of the company, corresponding to the share of this participant in the charter capital (unless otherwise is provided by the constituent documents) and the part of profit corresponding to the share of the participant, is paid to the participant. Subject to the agreement of the withdrawing (expulsed) participant with the remained participants of the business partnership or company, instead of payment of the cost of property, the property in kind can be delivered for the participant.
The part of property of the business partnership or company, which is due to the withdrawing (expulsed) participant, or the cost of this part is determined on the basis of the balance drawn up at the date of withdrawal (expulsion); the part of profit due to withdrawing (expulsed) participant is determined at the date of settlement.
Payment of the cost of property or delivering the property in kind to the withdrawing (expulsed) participant of the limited liability company is carried out after the expiration of the fiscal year and after the approval of the annual report for the year of withdrawal (expulsion) from the company, within twelve months from the date of submitting the application for withdrawal or making the decision on expulsion, unless otherwise is provided by the constituent documents.
3. The participants of an economic partnership or company shall be obliged to:
1) make contributions in accordance with the procedure and amounts, by the means, and within the periods provided for by the constituent documents;
2) not divulge confidential information concerning the activity of the partnership or company;
3) perform another duties provided by the legislative acts.
The participants of an economic partnership or company may also bear other duties provided for by its constituent documents.
Article 65. Transformation of Economic Partnerships and Companies
1. Economic partnerships and companies of one type may be transformed into economic partnerships and companies of another type or into production cooperatives by decision of the general meeting of participants in cases and in accordance with the procedure, established by the legislative acts; also, the business partnerships and companies can be transformed to the unitary enterprises, when only one participant remains in the partnership or company.
In the event of the transformation of a partnership into a company, each full partner who has become a participant (stockholder) of the company shall for two years bear subsidiary liability with all of its property for obligations which passed to the company from the partnership. The alienation by a former partner of participatory shares (stocks) belonging to it shall not relieve it from such liability. The rules set out in this Clause shall apply respectively when transforming a partnership into a production cooperative or into unitary enterprise.
2. General Partnership
Article 66. Basic Provisions on General Partnership
1. A partnership whose participants (general partners) in accordance with a contract concluded between them engage in entrepreneurial activity in the name of the partnership and, jointly and severally with each other, bear subsidiary liability for its obligations with all of the property belonging to them, shall be deemed to be a general partnership.
2. A person may be a participant of only one general partnership.
3. The firm name of a general partnership must contain either the names of all its participants, and the words "general partnership", or the name of one or several participants with the addition of the words "and company," and the words "general partnership".
Article 67. Articles of Incorporation of General Partnership
l. A general partnership shall be created and operate on the basis of the Articles of Incorporation. The Articles of Incorporation shall be signed by all of its participants.
2. The Articles of Incorporation of a general partnership must contain, in addition to the information specified in Article 48(2) of this Code, the conditions concerning the amount and composition of the charter capital of the partnership; the amount and procedure for changing the participatory shares of each of the participants in the charter capital; the amount, composition, periods, and procedure for making contributions by them; the liability of the participants for a violation of the duties relating to making contributions.
Article 68. Management in General Partnership
1. The management of the activity of a general partnership shall be effectuated by the common consent of all the participants. Instances when a decision is adopted by a majority vote of the participants may be provided for by the Articles of Incorporation of the partnership.
2. Each participant of a general partnership shall have one vote unless another procedure for determining the number of votes of its participants has been provided for by the Articles of Incorporation.
3. Each participant of a partnership, irrespective of whether he is authorized to conduct the affairs of the partnership, shall have the right to familiarize himself with all of the documentation relating to conducting the affairs. A waiver of this right or limitation thereof, including those by agreement of the participants of the partnership, shall be void.
Article 69. Conducting the Affairs of General Partnership
1. Each participant of a general partnership shall have the right to operate in the name of the partnership unless it has been established by the Articles of Incorporation that all of its participants conduct the affairs jointly, or the conducting of affairs has been entrusted by them to individual participants.
In the event of the joint conducting of the affairs of the partnership by its participants, the consent of all participants of the partnership shall be required in order to conclude each transaction.
If the conduct of the affairs of the partnership is entrusted by its participants to one or several of them, the remaining participants must, in order to conclude transactions in the name of the partnership, have a power of attorney from the participant(s) to whom the conducting of the affairs of the partnership has been entrusted.
In relations with third persons the partnership shall not have the right to refer to provisions of the Articles of Incorporation limiting the powers of the participants of the partnership, except for instances when the partnership proves that the third person at the time of concluding the transaction knew or knowingly should have known about the lack of the participant of the partnership's right to operate in the name of the partnership.
2. The powers to conduct the affairs of the partnership granted to one or several participants may be terminated by a court upon the demand of one or several other participants of the partnership when there are serious grounds, in particular, as a consequence of a flagrant violation by an authorized person(s) of his duties or of discovering that he is not capable of reasonably conducting affairs. Necessary changes shall be made in the Articles of Incorporation of the partnership on the basis of a judicial decision.
Article 70. Duties of Participant of General Partnership
l. The participant of a general partnership shall be obliged to participate in its activity in accordance with the conditions of the Articles of Incorporation.
2. The participant of a general partnership, shall be obliged to make not less than half of his contribution to the charter capital of the partnership at the time of registration thereof. The remaining portion must be contributed by the participant within the periods established by the Articles of Incorporation. In the event of the failure to fulfill the said duty the participant shall be obliged to compensate the losses caused to the partnership, unless other consequences have been established by the Articles of Incorporation.
3. The participant of a general partnership shall not have the right without the consent of the remaining participants to conclude in his name and in his interests or in the interests of third persons a transaction of the same nature as that which comprises the subject of activity of the partnership.
In the event of a violation of this rule, the partnership shall have the right at its discretion to demand from such participant either compensation for losses caused to the partnership, or the transfer to the partnership of all advantage acquired under such transactions.
Article 71. Distribution of Profit and Losses of General Partnership
1. Profit and losses of a general partnership shall be distributed between the participants thereof in proportion to their participatory shares in the charter capital unless otherwise provided by the Articles of Incorporation or other agreement of the participants. An agreement concerning the exclusion of any of the participants of the partnership from participation in the profits or in the losses shall not be permitted.
2. If as a consequence of losses incurred by the partnership, the value of its net assets becomes less than the amount of its charter capital, the profit received by the partnership shall not be distributed among the participants so long as the value of the net assets does not exceed the amount of charter capital.
Article 72. Liability of Participants of General Partnership for its Obligations
1. The participants of a partnership shall jointly and severally bear subsidiary liability with all of their property for the obligations of the partnership.
2. The participant of a general partnership who is not a founder thereof shall be liable equally with the other participants also for obligations which arose before his joining the partnership.
A participant who has withdrawn from the partnership shall be liable for the obligations of the partnership which arose before the time of his withdrawal equally with the remaining participants for two years from the date of confirmation of the report on the activity of the partnership for the year in which he withdrew from the partnership.
3. An agreement of the participants of the partnership concerning the limitation or elimination of the liability provided for in this Article shall be void.
Article 73. Change of Composition of Participants of General Partnership
1. Changing the composition of participants of the general partnership does not mean liquidation of the general partnership, unless otherwise is stipulated in the Articles of Incorporation of the general partnership.
2. Changing the composition of participants of the general partnership can happen as a result of:
1) withdrawal of the participant;
2) expulsion of the participant;
3) concession of the participant’s share to another person;
4) joining a new participant;
5) deeming the participant to be a bankrupt;
6) death of the participant, declaring the participant deceased, deeming the participant to be missing, deeming lack of active legal capacity or limitation of active legal capacity, or liquidation of the participant being a legal person.
3. In case of leaving of one of the participants from the general partnership, the shares of the remained participants in the charter capital of the general partnership are changed proportionally to the amount of contributions of these participants to the charter capital, unless otherwise is provided by the Articles of Incorporation or another agreement of the participants.
Article 74. Withdrawal of Participant from General Partnership
1. The participant of a general partnership, founded without specification of the term of operation, shall have the right to withdraw therefrom, having declared his refusal to participate in the partnership not less than six months before the actual withdrawal from the partnership.
The pre-term refusal to participate in the general partnership, founded for a specific term, is allowed in cases specified in the Articles of Incorporation, or, if there are no such provisions in the Articles of Incorporation, only subject to justifiable reasons. In case of dispute, the matter on withdrawal is resolved judicially.
2. Any agreement between the participants of a partnership to waive the right to withdraw from the partnership shall be void.
Article 75. Expulsion of Participant from the General Partnership
1. In case of non-fulfilling or improper fulfilling the duties by the participant of the general partnership, the participants of the general partnership have the right to appeal to the court for expulsion of such participant from the general partnership.
2. The expulsion of the participant from the general partnership takes place also in case of levying the execution upon the whole share of the participant in the general partnership. In such a case, the judicial decision on expulsion is not required.
Article 76. Concession of Participatory Share in General Partnership to Another Person
1. The participant of the general partnership has the right, subject to consent of all other participants, to transfer his share in the charter capital or part thereof to another participant of the general partnership participant or to the third party.
In such a case, other participants of the general partnership have the right of priority purchase of this share (part thereof) over other persons in accordance with the procedure determined by the Articles of Incorporation.
2. In case of transfer of the participatory share (part thereof) to another person, the liabilities of the participant transferring the participatory share (part thereof) are transferred, in full or in appropriate part, to the before-mentioned another person.
Transferring the participatory share in full by the participant of the partnership to another person means termination of participation in the partnership.
Article 77. Joining New Participant to General Partnership
The person has the right to become the participant of the general partnership, subject to consent of other participants of the general partnership, and subject to making a contribution to the charter capital of the general partnership in accordance with the Articles of Incorporation of the general partnership.
Article 78. Changing the Composition of Participants of the General Partnership in Consequence of the Participant’s Death,
Declaring the Participant to be Deceased, Deeming the Participant to be Missing, Lack of Active Legal Capacity or
Limitation of Active Legal Capacity, or Liquidation of the Participant Being a Legal Person
1. In case of the participant’s death or declaring the participant to be deceased, the heir of the participant has the right (but not obliged) to join the general partnership, subject to consent of other participants.
Settlements with the heir, not joined the general partnership, are carried out in accordance with Article 64(2) of this Code.
2. In case of liquidation of the legal person, being the participant of the general partnership, or deeming the participant to be missing or deeming lack of active legal capacity, or limitation of active legal capacity of the participant, the participatory share of such participant in the general partnership is separated in accordance with Article 64(2) of this Code.
Article 79. Levying Execution on Participatory Share of Participant in Charter Capital of General Partnership
Levying execution on the participatory share of a participant in the charter capital of a general partnership regarding the own debts of the participant shall be permitted only when his other property is insufficient to cover the debts. Creditors of such a participant shall have the right to demand of the general partnership the apportionment of the part of the property of the partnership corresponding to the participatory share of the debtor in the charter capital for the purpose of levying execution on this property.
The part of the property of the partnership subject to apportionment or the value thereof shall be determined according to the balance sheet drawn up at the time of the creditors submitting the demand concerning the apportionment.
Article 80. Liquidation of General Partnership
A general partnership shall be liquidated on the grounds specified in Article 57 of this Code, and also when a sole participant remains in the partnership. Such participant shall have the right within three months from the time when he became the sole participant of the partnership to transform such partnership into a unitary enterprise in accordance with the procedure established by this Code.
3. Special Partnership
Article 81. Basic Provisions on Special Partnership
1. A special partnership shall be deemed to be a partnership in which together with participants carrying out entrepreneurial activity in the name of the partnership and liable for the obligations of the partnership with their property (general partners) there are one or several participants (contributors, special partners) who shall bear the risk of losses connected with the activity of the partnership within the limits of the amounts of the contributions made by them and shall not take part in the effectuation by the partnership of entrepreneurial activity.
2. The status of general partners participating in a special partnership and their liability for the obligations of the partnership shall be determined by the legislation on the participants of a general partnership.
3. A person may be a full partner only in one special partnership.
A participant of a general partnership may not be a full partner in a special partnership.
A full partner in a special partnership may not be a participant of a general partnership.
4. The firm name of a special partnership must contain either the name(s) of all of the general partners and the words "special partnership", or the name of at least one full partner with the addition of the words "and company" and the words "special partnership". If the name of a contributor is included in the firm name of a special partnership, subject to the consent of this contributor, such contributor becomes a full partner.
5. The rules of this Code on the general partnership shall apply to a special partnership insofar as this is not contrary to the rules of this Code on the special partnership.
Article 82. The Articles of Incorporation of Special Partnership
1. A special partnership shall be created and shall operate on the basis of the Articles of Incorporation. The Articles of Incorporation shall be signed by all of the general partners.
The Articles of Incorporation of a special partnership must contain, besides the information specified in Article 48(2) of this Code, the conditions concerning the amount and composition of the charter capital of the partnership; the amount and procedure for changing the participatory shares of each of the general partners in the charter capital; the amount, composition, periods, and procedure for the making of contributions by them, their liability for a violation of the duties relating to the making of contributions; the aggregate amount of the contributions to be made by the contributors.
Article 83. Management in Special Partnership and Conducting its Affairs
1. The management of the activity of a special partnership shall be effectuated by the general partners. The procedure for the management and conducting of the affairs of such partnership by its general partners shall be established by them according to the legislation on the general partnership.
2. The contributors shall not have the right to participate in the management and conducting of the affairs of a special partnership, nor to act in its name, other than under a power of attorney. They shall not have the right to contest the actions of the general partners relating to the management and the conducting of the affairs of the partnership.
Article 84. Rights and Duties of Contributor to Special Partnership
1. The contributor to a special partnership shall be obliged to make a contribution to the charter capital. Making of a contribution shall be certified by a certificate of participation issued to the contributor by the partnership.
2. The contributor to a special partnership shall have the right to:
1) receive part of the profit of the partnership due for his participatory share in the charter capital in accordance with the procedure provided for by the Articles of Incorporation;
2) familiarize himself with the annual reports and balance sheets of the partnership;
3) at the end of the financial year withdraw from the partnership and receive his contribution in accordance with the procedure provided for by the Articles of Incorporation;
4) transfer his participatory share in the charter capital or part thereof to another contributor or to a third person. The contributors shall enjoy a preferential right of purchase against third persons of the participatory share (part thereof) according to the conditions and procedure provided for by Article 92(2) of this Code. The transfer by the contributor of his entire participatory share to another person shall terminate his participation in the partnership.
Other rights of a contributor also may be provided for by the Articles of Incorporation of a special partnership.
Article 85. Liquidation of Special Partnership
1. A special partnership shall be liquidated in the event of the withdrawal of all the contributors who participated therein. However, the general partners shall have the right instead of liquidation to transform the special partnership into a general partnership, or into the unitary enterprise, when only one participant remains in the partnership.
A special partnership shall be liquidated also on the grounds of liquidation of a general partnership (Article 80). However, a special partnership shall be preserved if at least one full partner and one contributor remain therein.
2. In the event of the liquidation of a special partnership, including in the event of economic insolvency (bankruptcy), contributors shall have the preferential right before the general partners to receive contributions from the property of the partnership remaining after the satisfaction of the demands of its creditors.
The property of the partnership remaining thereafter shall be distributed between the general partners and the contributors in proportion to their participatory shares in the charter capital of the partnership unless another procedure has been established by the Articles of Incorporation or by agreement of the general partners and the contributors.
4. Limited Liability Company
Article 86. Basic Provisions on Limited Liability Company
1. A limited liability company shall be deemed to be a company founded by one or several persons, the charter capital of which is divided into participatory shares of amounts determined by the constituent documents. The participants of a limited liability company shall not be liable for its obligations and shall bear the risk of losses connected with the activity of the company within the limits of the value of the contributions made by them.
The participants of a company who have not made contributions in full shall bear joint and several liability for its obligations within the limits of the value of the unpaid portion of the contribution of each of the participants.
2. The firm name of a limited liability company must contain the name of the company, and also the words "limited liability company".
3. The legal status of a limited liability company and the rights and duties of its participants shall be determined by the legislation on limited liability companies.
Article 87. Participants of Limited Liability Company
1. The number of participants of a limited liability company must not exceed the limit established by the legislative acts. Otherwise it shall be subject to reorganization within a year, and upon the expiry of this period, it shall be subject to liquidation in a judicial proceeding if the number of its participants is not reduced to up to the limit established by the legislative acts.
2. A limited liability company may not have a sole participant.
Article 88. Constituent Documents of Limited Liability Company
1. The constituent documents of a limited liability company shall be the Articles of Incorporation signed by its founders and the charter confirmed by them.
2. The constituent documents of a limited liability company must contain, in addition to the information specified in Article 48(2) of this Code, conditions concerning the amount of the charter capital of the company; concerning the amount of the participatory shares of each participant; the amount, composition, periods, and procedure for the making of contributions by them, the liability of the participants for a violation of the duties relating to making the contributions; the composition and competence of the management bodies of the company, and the procedure for the adoption of decisions by them, including on questions with regard to which decisions shall be adopted unanimously or by a qualified majority of votes, and also other information provided for by the legislation on limited liability companies.
Article 89. Charter Capital of Limited Liability Company
1. The charter capital of a limited liability company shall be comprised of the value of the contributions of its participants.
The charter capital shall determine the minimum amount of the property of the company guaranteeing the interests of its creditors.
2. The relieving of a participant of a limited liability company from the duty to make a contribution to the charter capital of the company, including by means of setting off demands against the company, shall not be permitted except for the instances established by the legislative acts.
3. The charter capital of a limited liability company must at the time of registration of the company be paid up by its participants by not less than half. The remaining unpaid portion of the charter capital of the company shall be subject to being paid up by its participants within one year of the activity of the company. In the event of a violation of this duty the company must either declare a reduction of its charter capital and register this reduction in the established procedure, or terminate its activity by way of liquidation.
4. Deleted.
5. Reduction of the charter capital of a limited liability company shall be permitted after informing all of its creditors. The latter shall have the right in this event to demand the termination or performance, before due time, of the respective obligations of the company and the compensation of losses to them.
6. An increase of charter capital of the company shall be permitted after making of contributions in full by all of its participants.
Article 90. Management in Limited Liability Company
1. The supreme body of the management of a limited liability company shall be the general meeting of its participants.
An executive body (collegial and(or) one-man) carrying out the current direction of its activity and accountable to the general meeting of its participants shall be created in a limited liability company. A one-man management body of the company also may be elected not from among its participants.
In the limited liability company may be created, by the decision of its founders (participants) in accordance with constituent documents, board of directors (supervisory board).
2. The competence of the management bodies of the company, and also the procedure for the adoption of decisions by them and acting in the name of the company, shall be determined in accordance with the legislation on limited liability companies and by the charter of the company.
3. There shall be relegated to the exclusive competence of the general meeting of participants of a limited liability company:
1) change of the charter of the company, change of the amount of its charter capital;
2) formation of executive bodies of the company and termination of their powers before time;
3) confirmation of the annual reports and bookkeeping balance sheets of the company and distribution of its profits and losses;
4) decision concerning the reorganization or liquidation of the company;
5) election of the audit commission (the auditor) of the company.
Deciding of other questions may be relegated also by the legislation on limited liability companies to the exclusive competence of the general meeting.
Questions relegated to the exclusive competence of the general meeting of participants of the company may not be transferred by it for decision of the executive body of the company.
4. In order to verify and confirm the correctness of the annual financial report of the limited liability company, it shall have the right annually to engage auditing organization (auditor – individual entrepreneur) not connected by property interests with the company or its participants (external audit). The audit verification of the yearly financial report of the company may also be carried out subject to the demand of any of its participants.
The procedure for conducting audit verifications of the activity of the company shall be determined by the legislation and by the charter of the company.
5. The information on the results of the company affairs (public accounting) is subject to publishing in cases provided by the legislation.
Article 91. Reorganization and Liquidation of Limited Liability Company
1. A limited liability company may be voluntarily reorganized or liquidated by the unanimous decision of its participants.
Other grounds for the reorganization and liquidation of the company, and also the procedure for its reorganization and liquidation, shall be determined by the legislative acts.
2. A limited liability company may transform itself into a joint-stock company, additional liability company, economic partnership or production cooperative, and, if only one participant remains in the company, into the unitary enterprise.
Article 92 Transfer of Participatory Share in Charter Capital of Limited Liability Company to Another Person
1. The participant of a limited liability company may sell or otherwise alienate his participatory share (part of the share) in the charter capital of the company to one or several participants of this company or the company itself.
2. The alienation by the participant of a company of his participatory share (part of the share) to third persons shall be permitted unless otherwise provided by the charter of the company.
The participants of the company shall enjoy a preferential right to purchase the participatory share of the participant (part of the share) in proportion to the amounts of their participatory shares unless the charter of the company or an agreement of its participants has provided a different procedure for exercising this right. If the participants of the company refuse their preferential right or do not take advantage of their preferential right within a month from the date of notification or within another period provided for by the charter of the company or by agreement of the participants thereof, the participatory share (part of the share) of the participant may be alienated to the company itself. If the participants of the company do not take advantage of their preferential right or the company itself does not take advantage of the right to buy the participatory share (part of the share) of the participant, the participatory share (part of the share) of the participant may be alienated to a third person.
3. If in accordance with the charter of a limited liability company the alienation of the participatory share of a participant (part of the share) to third persons is impossible, and the other participants of the company refuse to purchase it, the company shall be obliged to pay the participant its actual value or to issue the property in kind to him which corresponds to such value.
4. The participatory share of the participant of a limited liability company may be alienated until the payment thereof in full only in that part which has been already paid up.
5. In the event of the acquisition of the participatory share of a participant (part of the share) by the limited liability company itself, it shall be obliged either to distribute the participatory share which it bought out for it own funds among other participants in proportion to their shares or to realize it to the other participants or to third persons within periods and in accordance with the procedure provided for by the legislation on limited liability companies and by the constituent documents of the company, or to reduce its charter capital in accordance with Article 471 (3) and Article 89 (5) of this Code.
6. The participatory shares in the charter capital of a limited liability company shall pass to the heirs of citizens and to the legal successors of legal persons who are participants of the company unless the constituent documents of the company have provided that such transfer shall be permitted only with the consent of the other participants of the company. A refusal to consent to the transfer of a participator share shall entail the duty of the company to pay to the heirs (legal successors) of that participant its real value or to issue property in kind to them for such value in accordance with the procedure and on the conditions provided for by the legislation on limited liability companies and the constituent documents of the company.
Article 93. Withdrawal of Participant of Limited Liability Company from the Company
A participant of a limited liability company shall have the right at any time to withdraw from the company irrespective of the consent of its other participants.
5. Additional Liability Company
Article 94. Basic Provisions on Additional Liability Company
1. An additional liability company shall be deemed to be a company founded by one or several persons, whose charter capital has been divided into participatory shares of the amounts determined by the constituent documents. The participants of such a company shall bear subsidiary liability jointly and severally for its obligations with their property within the limits, defined by the constituent documents of the company, but not less than within the amount, established by the legislative acts. In the event of the economic insolvency (bankruptcy) of one of the participants, his liability for the obligations of the company shall be distributed among the remaining participants in proportion to their contributions unless another procedure for the distribution of liability has been provided for by the constituent documents of the company.
2. The firm name of an additional liability company must contain the name of the company and the words "additional liability company".
3. The rules of this Code on the limited liability company shall apply to the additional liability company insofar the legislative acts do not provide otherwise.
Article 95. Change of Amount of Additional Liability
The additional liability company has the right, subject to the notification of creditors, to reduce the amount of additional liability of the participants of the company (however, as a result of such reduction, the amount of additional liability of the participants should not become less than the amount established by the legislative acts), or to increase the amount of additional liability of the company participants.
The creditors of the additional liability company have the right, in case of reduction of the size of additional liability of participants of the company, to demand for the termination or the performаnсе of the respective obligations of the company before due time, and for the compensation of losses.
6. Joint-Stock Company
Article 96. Basic Provisions on Joint-Stock Company
1. A joint-stock company shall be deemed to be a company whose charter capital has been divided into a determined number of stocks having equal par value. The participants of a joint-stock company (stockholders) shall not be liable for its obligations and shall bear the risk of losses connected with the activity of the company within the limits of the value of the stocks belonging to them.
Stockholders who have not fully paid up stocks shall bear joint and several liability for the obligations of the joint-stock company within the limits of the unpaid portion of the value of the stocks belonging to them.
2. The firm name of a joint-stock company must contain its name and an indication that the company is a joint-stock company.
3. The legal status of a joint-stock company and the rights and duties of the stockholders shall be determined in accordance with the legislation on joint-stock companies.
Article 97. Open and Closed Joint-Stock Companies
1. A joint-stock company whose participants may alienate the stocks belonging to them without the consent of other stockholders to the non-limited set of persons, shall be deemed to be an open joint-stock company. Such a joint-stock company shall have the right to conduct an open subscription for the stocks issued by it and the free sale thereof on the conditions established by the legislation on securities.
An open joint-stock company is obliged to publish annually for general information a yearly report in the scope stipulated by the legislation.
2. The joint-stock company, the participant of which can alienate stocks belonging thereof only subject to the consent of other shareholders and (or) to the limited set of persons, shall be deemed to be a closed joint- stock company. Closed joint-stock company has the right to carry out only closed (among a limited number of persons) placing of additionally issued shares.
3. The number of participants of a closed joint-stock company may not exceed the number established by the legislative acts. Otherwise it is to be reorganized within a year, and upon the expiry of this period, be liquidated in a judicial procedure unless the number of participants is reduced to the limit established by the legislative acts.
4. In the instances provided for by the legislative acts on joint-stock companies a closed joint-stock company may be obliged to publish the documents, specified in Clause 1 of this Article, for general information.
5. The stockholders of a closed joint-stock company shall have a preferential right to acquire stocks being sold by other stockholders of this company.
If nobody of the shareholders would take advantage of this preferential right within five days from the date of the notification or within other period established by the charter, the joint-stock company has the right to purchase itself these stocks at the price agreed with the holder of these stocks. In case of refusal of the joint-stock company to purchase the stocks, or in case of failure to come to an agreement on the price of the stocks, these stocks may be alienated to any third party.
6. In case of pledge of stocks of the closed joint-stock company and subsequent levying execution on these stocks by the pledgee, the rules of Clause 5 of this Article are accordingly applied. However, the pledgee has the right to keep the stocks, instead of alienation of the stocks to the third party.
7. The shares of the closed joint-stock company are transferred to the heirs of the citizen or the to the legal successors of the legal person, which was the stockholder, if there is no provision in the charter of the company specifying that such passing is permitted only subject to the consent of the company. In the latter case, in case of refusal in transferring the stocks, these stocks shall be purchased by other stockholders or by the company itself in accordance with the rules of Clause 5 of this Article. However, the heirs (legal successors) have the right to keep the stocks, instead of alienation of the stocks to the third party.
Article 98. Formation of Joint-Stock Company
1. The founders of a joint-stock company shall conclude between themselves a contract determining the procedure for the effectuation by them of joint activity relating to the creation of the company; the amount of the charter capital of the company; the categories of stocks to be issued and the procedure for placing them, and also other conditions provided for by the legislation on joint-stock companies.
The contract concerning the creation of a joint-stock company shall be concluded in writing.
2. The founders of a joint-stock company shall bear joint and several liability for the obligations which arose before the registration of the company.
The company shall undertake liability for the obligations of the founders connected with its creation only in the event of subsequent approval of their actions by the general meeting of stockholders.
3. The constituent document of a joint-stock company shall be its charter, confirmed by the founders.
The charter of a joint-stock company must, in addition to the information specified in Article 48(2) of this Code, contain conditions concerning the categories of stocks to be issued by the company, their par value and quantity; the amount of the charter capital of the company; the rights of stockholders; the composition and competence of the management bodies of the company and the procedure for the adoption of decisions by them, including questions, the decisions regarding which shall be adopted unanimously or by a qualified majority of votes. The charter of the joint-stock company also must contain other data provided for by the legislation on joint-stock companies. The list of participants of the closed joint-stock company is enclosed with the charter.
4. The procedure for the performance of other actions relating to the creation of a joint-stock company, including the competence of the constituent meeting, shall be determined by the legislation on joint-stock companies.
5. The peculiarities of creating joint-stock companies in the event of privatization of state property shall be determined by the legislation on privatization.
6. A joint-stock company may not be created by one person or consist of one person. In case of acquisition of all the stocks of the company by one stockholder, the company is subject to liquidation or transformation to the unitary enterprise in accordance with the legislation.
Article 99. Charter Capital of Joint-Stock Company
l. The charter capital of a joint-stock company shall comprise the par value of the stocks of the company. The charter capital of the company shall determine the minimum amount of the property of the company, guaranteeing the interests of its creditors.
2. Relieving a stockholder from the duty to pay up the stocks of the company, including relieving it of this duty by means of setting off demands against the company, is not permitted except for the instances established by the legislative acts.
3. An open subscription for the stocks of a joint-stock company shall not be permitted until the charter capital is fully paid up. When a joint-stock company is founded, all of its stocks must be distributed among the founders.
4. Deleted.
5. The legislative acts or the charter of the company may establish limitations on total par value and the number of common (ordinary) and/or privileged stocks belonging to one stockholder or on the share of stocks belonging to one stockholder in the total amount of the charter capital of the joint-stock company.
Article 100. Increase of Charter Capital of Joint-Stock Company
1. A joint-stock company shall have the right by decision of the general meeting of stockholders to increase the charter capital by means of increasing the par value of the stocks or the issuance of additional stocks.
2. An increase of the charter capital of a joint-stock company shall be permitted after it is paid up in full. An increase of charter capital of the company in order to cover losses incurred by it shall not be permitted.
3. In the instances, provided for by the legislative acts, a preferential right of stockholders, who possess common (ordinary) or other voting stocks, to purchase stocks, additionally to be issued by the company, may be established by the charter of the company.
Article 101. Reduction of Charter Capital of Joint-Stock Company
1. A joint-stock company shall have the right by decision of the general meeting of stockholders to reduce the charter capital by means of reducing the par value of the stocks, or by means of purchasing a part of the stocks for the purposes of reducing the total number thereof.
A reduction of charter capital of a company shall be permitted after informing all of its creditors in accordance with the procedure determined by the legislation on joint-stock companies. In this connection the creditors of the company shall have the right to demand the termination and the performance, before the due time, of the respective obligations of the company and compensation of losses to them.
2. A reduction of the charter capital of a joint-stock company by means of purchasing a part of stocks by this company for the purposes or reducing their total number is permissible if such possibility has been provided for in the charter of the company.
Article 102. Limitations on Issuance of Securities and Payment of Dividends of Joint-Stock Company
1. The share of preferred stocks in the overall amount of the charter capital of a joint-stock company must not exceed 25%.
2. A joint-stock company shall have the right to issue bonds for an amount not exceeding the charter capital.
3. A joint-stock company has no right to adopt decision on declaring and paying dividends, as well as to pay dividends:
1) until all of the charter capital is paid up in full;
2) if the value of net assets of the joint-stock company is less than its charter capital and reserve fund or becomes less than the amount thereof as a result of the payment of dividends;
3) in other instances provided for by the legislative acts.
Article 103. Management in Joint-Stock Company
1. The supreme management body of a joint-stock company shall be the general meeting of its stockholders.
There shall be relegated to the exclusive competence of the general meeting of stockholders:
1) change of the charter of the company, including change of the amount of its charter capital;
2) election of members of the board of directors (supervisory board) and inspection commission (inspector) of the company, and termination of their powers before the appointed time;
3) deleted
4) confirmation of the yearly reports; bookkeeping balance sheets, profits and losses accounts of the company, and distribution of its profits and losses;
5) decision concerning reorganization or liquidation of the company.
The deciding of other questions also may be relegated to the exclusive competence of the general meeting of stockholders by the legislative acts.
Questions relegated by the legislation to the exclusive competence of the general meeting of stockholders may not be transferred by them for decision of the executive bodies of the company.
2. In a company with more than 50 stockholders a board of directors (supervisory board) shall be created.
In the event a board of directors (supervisory board) is created, its exclusive competence must be determined by the charter of the company in accordance with the legislation on joint-stock companies. Questions relegated by the charter to the exclusive competence of the board of directors (supervisory board) may not be transferred by them for decision of executive bodies of the company.
3. The executive body of a company may be collegial (board, directorate) and(or) one-man (director, director general). It shall effectuate current direction over the activity of the company and be accountable to the board of directors (supervisory board) and general meeting of stockholders.
To the competence of the executive body of the company shall be relegated the deciding of all questions which do not constitute the exclusive competence of other management bodies of the company specified by the legislative acts or by the charter of the company.
By decision of the general meeting of stockholders the powers of an executive body of the company may be transferred under a contract to another commercial organization or individual entrepreneur (manager).
4. The competence of the management bodies of a joint-stock company, and also the procedure for the adoption of decisions by them and of acting in the name of the company, shall be determined in accordance with the legislation on joint-stock companies and by the charter of the company.
5. A joint-stock company, obliged in accordance with the legislation on joint-stock companies to publish for general information the documents specified in Article 97(1) of this Code, must, in order to verify and confirm the correctness of the yearly financial reports, annually engage an auditing organization (auditor – individual entrepreneur) not connected by property interests with the company or the participants thereof.
The audit verification of the activity of a joint-stock company, including those not obliged to publish for general information the documents specified in Article 97(1) of this Code, must be conducted at any time at the demand of the stockholders which possess in the aggregate ten percent or more of the stocks of this company.
The procedure for conducting audit verifications of the activity of a joint-stock company shall be determined by the legislation and by the charter of the company.
Article 104. Reorganization and Liquidation of Joint-Stock Company
1. A joint-stock company may be voluntarily reorganized or liquidated by decision of the general meeting of stockholders.
Other grounds and the procedure for reorganization and liquidation of the joint-stock company shall be determined by the acts of legislation.
2. A joint-stock company shall have the right to be transformed into a limited liability company, additional liability company, economic partnership or a production cooperative, and also into the unitary enterprise, if only one participant remains in the transformed company.
7. Subsidiary And Dependent Companies
Article 105. Subsidiary Economic Company
1. An economic company shall be deemed to be a subsidiary if another (principal) economic company or partnership by virtue of predominant participation in its charter capital, or in accordance with a contract concluded between them, or otherwise has the possibility to determine the decisions adopted by that company.
2. A subsidiary company shall not be liable for the debts of its principal company (partnership).
The principal company (partnership) which has the right to give to the subsidiary company instructions binding upon it, including those under a contract with it, shall be liable jointly and severally with the subsidiary company with regard to transactions concluded by the latter in performance of such instructions.
In the event of the economic insolvency (bankruptcy) of the subsidiary company through the fault of the principal company (partnership) the latter shall bear subsidiary liability for its debts.
3. The participants (stockholders) of a subsidiary company shall have the right to demand compensation by the principal company (partnership) for losses caused through its fault to the subsidiary company unless otherwise established by the legislation on economic companies.
Article 106. Dependent Economic Company
l. An economic company is deemed to be dependent if another economic company has the share in the charter capital (stocks) of this company corresponding twenty or more percent of votes of the total number of votes which it can use at the general meeting of the participants of such company.
2.The limits of mutual participation of economic companies in the charter capital of one another and the number of votes which one of such companies may use at the general meeting of participants or stockholders of the other company shall be determined by the legislative acts.
§ 3. Production Cooperatives
Article 107. Concept of Production Cooperative
1. A production cooperative (artel) shall be deemed to be a commercial organization, the participants of which should make the property share contributions, take personal labor participation in its activity and bear subsidiary liability on the obligations of the production cooperative in equal portions, unless otherwise is determined in the charter, within the limits, determined by the charter, but not less than the value of the annual income gained in the production cooperative.
2. The firm name of a cooperative must contain its name and the words "production cooperative" or "artel".
3. The legal status of production cooperatives and the rights and duties of their members shall be determined in accordance with the legislation on the production cooperatives.
Article 108. Formation of Production Cooperatives
1. The constituent document of a cooperative shall be its charter, confirmed by the general meeting of its members.
2. The charter of a cooperative must contain, in addition to the information specified in Article 48(2) of this Code, the conditions concerning the amount of the charter capital, the amount of the share contributions of the members of the cooperative; the composition and procedure for the making of share contributions by members of the cooperative and their liability for a violation of the obligation to make share contributions; the character and procedure of labor participation of its members in the activity of the cooperative and their liability for a violation of the obligation relating to personal labor participation; the procedure for the distribution of profits and losses of the cooperative; the amount and conditions of subsidiary liability of its members for the debts of the cooperative, the composition and competence of the management bodies of the cooperative and the procedure for the adoption of decisions by them, including on questions the decisions regarding which shall be adopted unanimously or by a qualified majority of votes.
3. The number of members of a cooperative must be not less than three.
Article 109. Property of Production Cooperative
1. Property in the ownership of a production cooperative shall be divided into shares of its members in accordance with the charter of the cooperative.
It may be established by the charter of the cooperative that a determined part of the property belonging to the cooperative shall comprise the indivisible funds to be used for the purposes determined by the charter.
A decision concerning the formation of the indivisible funds shall be adopted by the members of the cooperative unanimously unless otherwise provided by the charter of the cooperative.
2. The member of a cooperative shall be obliged to contribute not less than 10% of his share contribution at the time of registration of the cooperative, and the remaining portion within a year from the time of registration, if the shorter period is not provided by the constituent document of the cooperative.
3. The profit of a cooperative shall be distributed among its members in accordance with their labor participation unless a different procedure has been provided by the legislation and by the charter of the cooperative.
The property remaining after the liquidation of the cooperative and the satisfaction of the demands of its creditors shall be distributed in accordance with the same procedure.
Article 110. Management in Production Cooperative
1. The supreme management body of a cooperative shall be the general meeting of its members.
The executive bodies of a cooperative shall be the board and (or) its chairman. They shall effectuate current direction over the activity of the cooperative and shall be accountable to the supervisory board and the general meeting of the members of the cooperative.
Only members of the cooperative may be members of the supervisory board and board of the cooperative, and also the chairman of the cooperative. A member of the cooperative may not simultaneously be a member of the supervisory board and a member of the board or the chairman of the cooperative.
2. The competence of the management bodies of a cooperative and the procedure for the adoption of decisions by them shall be determined by the legislation and by the charter of the cooperative.
3. There shall be relegated to the exclusive competence of the general meeting of members of the cooperative:
change of the charter of the cooperative;
formation of the supervisory board and termination of the powers of its members, and also the formation and termination of powers of the executive bodies of the cooperative unless this right according to the charter of the cooperative has been transferred to the supervisory board;
admission and expulsion of members of the cooperative;
confirmation of the annual reports and bookkeeping balance sheets of the cooperative, distribution of its profits and losses;
decision concerning reorganization and liquidation of the cooperative;
The deciding of other questions also may be relegated to the exclusive competence of the general meeting by the legislation on production cooperatives and by the charter of the cooperative.
Questions relegated to the exclusive competence of the general meeting or supervisory board of a cooperative may not be transferred by them for decision of the executive bodies of the cooperative.
4. A member of a cooperative shall have one vote when decisions are adopted by the general meeting.
Article 111. Termination of Membership in Production Cooperative and Transfer of Share
l. The member of a cooperative shall have the right at his discretion to withdraw from the cooperative. In this event the value of the share must be paid or the property corresponding to his share issued to him, and also other payments provided for by the charter of the cooperative effectuated.
The payment of the value of the share or the issuance of other property to a withdrawing member of a cooperative shall be done at the end of the financial year and after confirmation of the bookkeeping balance sheet of the cooperative unless otherwise provided by the charter of the cooperative.
2. A member of a cooperative may be expelled from the cooperative upon the decision of the general meeting in the event of the failure to perform or the improper performance of the duties placed on him by the charter of the cooperative, and also in other instances provided for by the legislation on production cooperatives and by the charter of the cooperative.
A member of the supervisory board or executive body may be expelled from the cooperative by the decision of the general meeting in connection with his membership in the similar cooperative.
A member of a cooperative expelled therefrom shall have the right to receive the share and other payments provided for by the charter of the cooperative in accordance with Clause 1 of this Article.
3. The member of a cooperative shall have the right to transfer his share or part thereof to another member of the cooperative unless otherwise provided by the legislation and by the charter of the cooperative.
The transfer of a share (part thereof) to a citizen, who is not a member of the cooperative, shall be permitted only with the consent of the cooperative. In this event the other members of the cooperative shall enjoy the preferential right to purchase such share (part thereof).
4. In the event of the death of a member of a production cooperative his heirs may be admitted as members of the cooperative unless otherwise provided by the charter of the cooperative. Otherwise the cooperative shall pay to the heirs the value of the share of the deceased member of the cooperative.
5. The levying of execution on the share of a member of a production cooperative shall be permitted with regard to the own debts of a member of the cooperative, in accordance with the procedure provided for by the legislation and by the charter of the cooperative, only if his other property is insufficient to cover such debts. Execution may not be levied for debts of a member of a cooperative on the indivisible funds of the cooperative.
Article 112. Reorganization and Liquidation of Production Cooperatives
1. A production cooperative may be voluntarily reorganized or liquidated by decision of the general meeting of its members.
Other grounds and the procedure for the reorganization and liquidation of a cooperative shall be determined by the legislation.
2. A production cooperative may, by unanimous decision of its members, be transformed into an economic partnership or company if less than three members remain in the cooperative, or into the unitary enterprise if only one member remains in the cooperative.
§ 4. Unitary Enterprises
Article 113. Unitary Enterprise
1. A commercial organization not endowed with the right of ownership to property consolidated to it by the owner shall be deemed to be a unitary enterprise. The property of a unitary enterprise shall be indivisible and may not be distributed according to contributions (participatory shares, shares), including distribution among the employees of the enterprise.
The charter of a unitary enterprise must contain, in addition to the information specified in Article 48(2) of this Code, information concerning the subject and purposes of activity of the enterprise, and also the amount of the charter fund of the enterprise and the procedure and sources for forming it.
The state (Republic's or communal) unitary enterprises or private unitary enterprises may be created in the form of unitary enterprises.
2. The property of the unitary enterprise shall be in the state ownership or private ownership of natural person or legal person.
The property of the Republic's unitary enterprise shall be in the ownership of the Republic of Belarus; this property shall belong to the enterprise by right of economic management or operative administration.
The property of the communal unitary enterprise shall be in the ownership of the administrative territorial unit; this property shall belong to the enterprise by right of economic management.
The property of the private unitary enterprise shall be in the private ownership of the natural person (joint ownership of the spouses or of the members of peasant (farming) household) or of the legal person; this property shall belong to the enterprise by right of economic management.
The property of the affiliated unitary enterprise shall be in the ownership of the owner of property of the founding enterprise; shall belong to the affiliated enterprise by right of economic management.
The shared ownership to the property of the unitary enterprise is not permitted.
In case of division of the property, being in joint ownership of the spouses or of the members of peasant (farming) household, as well as in case of transferring the right of ownership to the property of the unitary enterprise in accordance with the procedure of heir, legal succession or by other ways, not contradictory to the legislation, to two and more persons:
the unitary enterprise may be reorganized by splitting-up (splitting-off) or transformation into the business partnership or company in accordance with the procedure, established by the legislation and by the agreement of the parties;
the property of the unitary enterprise is transferred into the ownership of one legal person or natural person (into joint ownership of the spouses or of the members of peasant (farming) household) with payment of compensation to other persons in proportion to their share in the common property, determined in accordance with the rules, established for property, for which the shared ownership is permitted;
the unitary enterprise is subject to liquidation in accordance with the procedure, established by the legislation, if reorganization or transferring the property into the ownership of one person is contradictory with the legislation or impossible because of other reasons.
3. The firm name of a unitary enterprise must contain an indication of the pattern of ownership.
4. The body of a unitary enterprise shall be the head, who shall be appointed by the owner or by the body authorized by the owner and accountable to it.
5. A unitary enterprise shall be liable for its obligations with all of the property belonging to it.
A unitary enterprise shall not bear liability for the obligations of the owner of its property, except for the cases provided for by this Code.
6. The legal status of unitary enterprises shall be determined by the legislation on the unitary enterprises.
Article 114. Unitary Enterprise Based on the Right of Economic Management
1. The unitary enterprise based on the right of economic management shall be founded by the decision of the owner of its property, or of the unitary enterprise, based on the right of economic management, or of the authorized state body or local administrative or self-government body.
2. The constituent document of the unitary enterprise, based on the right of economic management, shall be its Charter, approved by the founder of the unitary enterprise.
3. Deleted.
4. Before the state registration of the unitary enterprise, based on the right of economic management, the charter capital of the enterprise must be paid in full by the owner of property of the enterprise.
5. Deleted.
6. In case of adoption of the decision by the founder of the unitary enterprise on reduction of the charter capital, the unitary enterprise shall notify its creditors about such decision in writing.
The creditor of unitary enterprise has the right to claim for the termination or performing of the obligations, for which the unitary enterprise is a debtor, before due date, and for the compensation of losses.
7. The unitary enterprise, based on the right of economic management, may form, as a legal person, subject to a consent of the owner of its property, another unitary enterprise by transferring the part of its property for economic management (the affiliated enterprise) in accordance with existing procedure.
The founder shall approve the charter of the affiliated enterprise and shall appoint its head.
8. The owner of property of the unitary enterprise, based on the right of economic management, is not liable for the obligations of the enterprise, with the exception of the cases, provided by Article 52(3) of this Code.
Article 115. Unitary Enterprise , Based on Right of Operative Administration (Fisc Enterprise)
1. In the instances provided for by the legislation on the unitary enterprises, by decision of the Government of the Republic of Belarus, a unitary enterprise based on the right of operative administration (fisc enterprise) may be formed on the base of property being in the ownership of the Republic of Belarus.
2. The constituent document of a fisc enterprise shall be its charter confirmed by the Government of the Republic of Belarus.
3. The firm name of the enterprise based on the right of operative administration must contain an indication that this enterprise is a fisc enterprise.
4. The rights of a fisc enterprise to the property consolidated to it shall be determined in accordance with Articles 277 and 278 of this Code.
5. The Republic of Belarus shall bear subsidiary liability for the obligations of the fisc enterprise if its property is insufficient.
6. A fisc enterprise may be reorganized or liquidated by decision of the Government of the Republic of Belarus.
§ 5. Noncommercial Organizations
Article 116. Consumer Cooperative
1. A voluntary association of citizens and legal persons on the basis of membership for the purpose of satisfying material (property) and other requirements of participants to be effectuated by means of combining the property share contributions of the members thereof shall be deemed to be a consumer cooperative.
2. The charter of a consumer cooperative must contain, in addition to the information specified in Article 48(2) of this Code, the conditions and the procedure of admission of members to the cooperative and of termination of membership in the cooperative; the rights and duties of the members of the cooperative; the conditions concerning the amount of share contributions of the members of the cooperative; the composition and procedure for making of share contributions by members of the cooperative and their liability for a violation of the obligation relating to making of the share contributions; the composition and competence of the management bodies of the cooperative and the procedure for the adoption of decisions by them, including on questions, the decisions regarding which are adopted unanimously or by a qualified majority of votes; and the procedure for the covering by members of the cooperative of losses incurred by it.
3. The name of the consumer cooperative must contain an indication of the principal purpose of its activity, and also either the word "cooperative" or the words "consumer union" or "consumer company".
4. The members of the consumer cooperative shall be obliged within three months after confirmation of the annual balance sheet to cover losses, which have formed, by means of additional contributions. In the event of the failure to fulfill this duty, the cooperative may be liquidated in a judicial proceeding at the demand of the creditors.
The members of a consumer cooperative shall bear jointly and severally subsidiary liability for its obligations within the limits of the uncontributed portion of the additional contribution of each member of the cooperative.
5. The revenues and income received by the consumer cooperative may not be distributed among its members.
6. The legal status of consumer cooperatives (the consumer companies, or unions of such companies), shall be determined by this Code and other legislation on consumer cooperation.
The legal status of other consumer cooperatives (housing cooperatives, housing construction cooperatives, youth housing complexes, collectives of individual builders, garage cooperatives, gardening partnerships etc.) shall be determined by this Code and other legislation.
Article 117. Public and Religious Organizations (Associations)
1. Public and religious organizations (associations) shall be deemed to be voluntary associations of citizens who have combined in accordance with the procedure established by legislation on the basis of their common interests in order to satisfy spiritual and other nonmaterial requirements.
Public and religious organizations shall be noncommercial organizations. They shall have the right to effectuate entrepreneurial activity only for the achievement of the purposes for which they were created; the entrepreneurial activity of such organizations shall comply with these purposes.
2. The participants (members) of public and religious organizations shall not retain rights to property transferred in ownership by them to such organizations, including membership dues. They shall not be liable for the obligations of public and religious organizations in which they participate as members, and the said organizations shall not be liable for the obligations of their members.
3. The peculiarities of the legal status of public and religious organizations as participants of civil relations shall be determined by the legislation.
Article 1171. Republic's State-social Associations
1. Republic's state-social associations shall be deemed noncommercial organization based on the membership the purposes of which are the accomplishment of missions meaningful for the state.
2. Founders of a Republic's state-social association and its members may be natural and legal persons, as well as the Republic of Belarus in the person of authorized state bodies and legal persons acting on its behalf.
3. The charter of a Republic's state-social association is adopted by its founders or the highest body of this association and to be approved by the President of the Republic of Belarus or, under his instructions, by the Government of the Republic of Belarus.
4. The creation of the Republic's state-social association is carried out by the decision of the founders or as the result of the reorganization of a existing noncommercial organization in the form of the public association on the conditions determined by the President of the Republic of Belarus or, under his instructions, by the Government of the Republic of Belarus.
5. The Republic's state-social association may create, in the established order, its organizational divisions, including in the form of legal persons, and create other legal persons or to participate in legal persons in accordance with the charter of the Republic's state-social association or other legislation.
6. The legal status of Republic's state-social associations is determined by this Code and other legislation on Republic's state-social associations.
Article 118. Funds
1. For the purposes of this Code, a fund shall be deemed to be a noncommercial organization not having membership, founded by citizens (a citizen) and(or) legal persons (a legal person) on the basis of voluntary property contributions, and pursuing social, charitable, cultural, educational, sport-promoting, scientific and other publicly useful purposes specified in the charter of the fund.
The name of a fund shall contain the word “fund” and indication to the nature of activities and type of the fund.
The property transferred to the fund by its founder(s) shall belong to the founder(s) on the right of the ownership (right of economic management, operative administration), be necessary and appropriate for the use in the activities of the fund.
The sources of the formation of property of a fund are the property being transferred to the fund by its founder(s), proceedings from events held in accordance with the charter of the fund, incomes derived from entrepreneurial activity carried out in accordance with the charter and other proceeding not prohibited by legislation.
The property transferred to a fund by its founder(s) is the ownership of the fund. The founder(s) are not liable for the obligations of the fund created, and the fund is not liable for the obligations of its founder(s).
The rules effective in relation to creation, activity, reorganization and liquidation of funds, established by this Code, do not cover the funds created or being created according to a decision of the President of the Republic of Belarus, Parliament of the Republic of Belarus, Council of Ministers of the Republic of Belarus unless otherwise stipulated in acts of legislation on creation of such funds.
2. The fund shall use property for the purposes determined in its charter.
For carrying out entrepreneurial activity, funds are entitled to create unitary enterprises, economic companies or to participate in them, except for limited liability companies.
A fund is obliged to publish annually reports on the use of its property. The procedure for publication and the content of data are established by legislation.
3. The bodies of a fund are the board (council), directorate (director) and trustee council.
The charter of the fund may envisage other bodies necessary for carrying out it activity.
The board (council) of the fund is a highest collegiate body of the fund formed by its founder(s). The main function of the board (council) is to ensure observance by the fund of purposes for attainment of which it is created.
The exclusive competence of the board (council) includes:
making changes and/or additions to the charter of the fund;
formation (nomination) of an executive body of the fund – directorate (director) and premature termination of its powers;
creation and liquidation of representations, affiliates of the fund, determination of their terms of reference;
approval of the annual report and balance sheet of the fund;
reorganization of the fund if the possibility of a reorganization is stipulated by its charter.
The directorate (director) of the fund is an executive body of the fund carrying out current management of its activity. The directorate (director) of the fund is accountable in its activity to the board (council) of the fund.
The trustee council of the fund is a body effectuating control over activity of the fund, which is formed by its founder(s) at the moment of establishing the fund, and subsequently, if it is stipulated by the charter of the fund, by the board (council) of the fund.
The exclusive competence of the trustee council of the fund includes:
control over compliance of the activity of fund with legislation and the charter of the fund;
control over fulfillment of resolutions of the highest collegiate body of the fund, the executive body of the fund;
control over the use of monetary funds and other property of the fund in accordance with its charter objectives;
preliminary discussion of and consent to the annual report of the fund.
4. A fund acts on the basis of the charter approved by the founder(s) of the fund.
The charter of the fund must, in addition to the information specified in Article 48(2) of this Code, contain: data about founder(s) of the fund;
tasks and methods of activity of the fund;
composition and procedure for formation of the bodies of the fund;
procedure for the formation, terms of reference and term of powers of the trustee council of the fund;
procedure for the appointment and dismissal of officials of the fund;
procedure for introduction of changes and/or additions to the charter of the fund;
sources and procedure for the formation of fund property;
time period for which the fund is created or the indication to its activity unlimited in time;
data on representations and/or affiliates created by the fund, including the name of representations, affiliated and their location (governing bodies of representations, affiliates);
data on intended use of the property of the fund in the event of its liquidation. At that such property shall be intended for the purposes for the attainment of which the fund was created;
other provisions stipulated by legislation and not contradicting this Code.
5. Other provisions connected with creation, activity, reorganization and liquidation of a fund not stipulated by this Article and Article 119 of this Code are determined by legislative acts.
Article 119. Change of Charter and Liquidation of Fund
1. The charter of a fund may be changed by the board of the fund in the order stipulated by the charter.
Respective changes and/or additions to the charter of the fund shall be introduced and presented in the established order for the state registration within a month period in the case of:
change of purposes of the fund;
change of the name of the fund;
change of the type of the fund;
change of location of the fund (governing body of the fund);
creation or liquidation of representations and/or affiliates of the fund;
change of data about bodies of the fund, including the trustee council, procedure for appointment and dismissal of officials of the fund, procedure for formation of the fund property, as well as about other factual circumstances the reference to which shall be contained in the charter of the fund in accordance with legislation;
change of legislation in accordance with which the introduction of changes and/or additions to the charter of the fund is required unless other periods are established by that legislation.
2. The reorganization of a fund if its possibility is envisaged by the charter of the fund may be carried out in the form of:
merger with another fund;
affiliation to another fund;
affiliation of another fund;
splitting-off from the fund of a legal person of any organizational and legal form;
splitting-up in two or more funds.
A fund may not be reorganized in the form of transformation.
The cost of the remaining property of the fund reorganized in the form of splitting-off may not be less than the minimum amount necessary of the creation and activity of the fund.
3. A fund may be liquidated upon the application of the interested persons by a court decision:
in the case of non-presentation to the registering body of documents on the transfer by its founder(s) in the ownership of the fund of the property in the form of non-monetary contributions at the formation of the fund property in the amount not less then the minimum amount required for the creation and activity of the fund in full amount or in part in the form of non-monetary contributions within three months after the state registration of the fund;
in the case of non-fulfillment of the obligation on creation, in the established period after the state registration of the fund, of representations and/or affiliates and non-presentation for the state registration of changes and/or additions being introduced to the charter of the fund in connection with the change of its type;
if, at the end of a calendar year, the value of the fund property is less than the minimum amount required for the creation and activity of the fund, and that value has not been increase till the minimum amount required for its creation and activity;
if the purposes of the fund can not be attained, and necessary changes of those purposes can not be made;
in the case the fund evades in its activity from the purposes stipulated by the charter;
in the case of carrying out activity prohibited by legislation or activity with repeated or serious violations of legislation and the charter of the fund;
n other cases stipulated by the legislation.
4. The property remaining after the liquidation of a fund, including after the satisfaction of claims of creditors is to be used for the purposes for the attainment of which the fund was created. In the case when such use of the property is impossible it shall be transferred in equal parts to funds created for the attainment of similar purposes provided that the funds submitted written applications to the court which has taken the decision to liquidate the fund.
In the absence of such applications, the property remaining after the liquidation of the fund is to be transferred in the ownership of the Republic of Belarus and used for the purposes for the attainment of which the fund was created.
Article 120. Institutions
1. An institution shall be deemed to be an organization created by the owner in order to effectuate management, social and cultural, or other functions of a noncommercial character, and financed by the owner wholly or partially.
The rights of an institution to property consolidated to it shall be determined in accordance with Article 279 of this Code.
2. An institution shall be liable for its obligations with the monetary means being at its disposal. The owner of the respective property shall bear subsidiary liability for obligations of the institution in the event of insufficiency of such monetary means.
3. The peculiarities of the legal status of individual types of state and other institutions shall be determined by the legislation.
Article 121. Associations of Legal Persons and(or) Individual Entrepreneurs (Associations and Unions)
1. Commercial organizations and (or) individual entrepreneurs, for the purpose of co-ordination of entrepreneurial activity, and for representation and protection of their common property interests, may, by the contract between them, establish the associations in the form of associations or unions, being non-commercial organizations.
If by decision of the participants the conducting of entrepreneurial activity is placed on an association (union), such association (union) shall be transformed into an economic company or partnership in accordance with the procedure provided for by the legislation, or may create an economic company in order to effectuate entrepreneurial activity or participate in such company.
2. Public and other noncommercial organizations, including institutions, may voluntarily unite into associations (unions) of these organizations.
An association (union) of noncommercial organizations shall be a noncommercial organization.
3. Association (union) shall be a legal person.
Members of an association (union) shall retain their autonomy and rights of a legal person or individual entrepreneur.
4. An association (union) shall not be liable for the obligations of its members. Members of an association (union) shall bear subsidiary liability for its obligations in the amount and in accordance with the procedure provided for by the constituent documents of the association.
5. The name of an association (union) must contain an indication of the principal subject of the activity of its members with inclusion of the word "association" or "union".
Article 122. Constituent Documents of Associations and Unions
1. The constituent documents of an association (union) shall be the Articles of Association, signed by its members, and the charter confirmed by them.
2. The constituent documents of an association must contain, in addition to the information specified in Article 48(2) of this Code, the procedure of forming the property of the association (union), the procedure of making changes in the constituent documents of the association (union), the conditions concerning the composition and competence of managing bodies of the association (union) and the procedure of adoption of decisions by them, including questions, the decisions with regard to which shall be adopted unanimously or by a qualified majority of votes of members of the association (union), and the procedure for the distribution of property remaining after liquidation of the association (union).
Article 123. Rights and Duties of Members of Associations and Unions
l. The members of an association (union) shall have the right to use its services free of charge.
2. The member of an association (union) shall have the right at its discretion to withdraw from the association (union) at the end of the financial year. In this event it shall bear subsidiary liability for obligations of the association (union) in proportion to its contribution for two years from the time of withdrawal, if these obligations arose during its membership in the association..
The member of an association (union) may be expelled therefrom by decision of the remaining participants in the instances and in accordance with the procedure established by the constituent documents of the association (union). Rules relating to withdrawal from an association (union) shall apply with respect to the liability of the expelled member of the association (union).
3. With the consent of the members of the association (union), a new participant may join. The joining of an association (union) by a new member may be conditioned by its subsidiary liability for obligations of the association (union) which arose before its joining.
§ 5. State Associations
Article 1231. Basic Provisions on State Association
1. A state association (concern; industrial, scientific and industrial or other association) shall be deemed an association of state legal persons, state and other legal persons, as well as state and other legal persons and individual entrepreneurs created on the decision of the President of the Republic of Belarus, Government of the Republic of Belarus, and , under their instruction (authorization), by other Republic bodies of state governance or by decisions of bodies of local government and self-government.
2. A state association shal be created, as a rule, on a industry branch principle for the purposes of carrying out general direction, general management of activities, coordination of activities and representation of interests of legal persons and individual entrepreneurs being part of the association.
3. A state association is subordinated to the Government of the Republic of Belarus, Republic body of state governance, body of local government and self-government or a state organization which executes certain functions of a Republic body of state governance.
4. State associations are noncommercial organization, except for the cases of adopting, in accordance with the legislation, decision on recongnising them commercial organizations.
5. The owner of the property of a state association is not liable for the obligations of the state association except for cases stipulated by legislative acts.
6. The legal status of state associations, rights and duties of legal persons and individual entrepreneurs being their part shall be determinde by this Code and other acts of legislation on such associations, and by their charters.
Article 1232. Participants of a State Assocation
1. A state association may be joined by state unitary enterprises and (or) state institutions, on the decision of the body (official) which took the decision on the creation of the state association or of the body authorised by it, as well as by other organizations, individual entrepreneurs, voluntarily, on the conditions and according to the order determined by the charter of the state association. Legal persons may join the state assoation in accordance with the legislation.
The decision on the possibility of joining a state association by individual entrepreneurs and non-state legal persons is to be taken by the state body (official) which took decision on the creation of the state association or by a body authorised by it.
2. The participants of state associations retain rights of legal persons and individual entrepreneurs, which may be limited or otherwise changed in accordance with the legislation.
3. State unitary enterprises and state institutions being part of a state association on the decision of a state body (official) which took decision on the creation of the state association or by a body authorised by it may be excluded from it on the decision of this body (official).
4. Decisions of state associations on matters provided by charters of state assocations and by acts of legislation on such associations are obligatory for their participants.
5. State association are not liable for obligations of their participants, and participants of a state association are not liable for obligations of this state association except for the cases stipulated by the legislation.
Article 1233. Property of State Association
1. The property of a state association in in the state ownership and belongs to it on the right of economic management or on the right of operative administration. The state body (official), which took the decision on the creation of the state association, or the body authorised by it, as well as the charter of the state association, shall determine the right on which the property belongs to the state association.
2. The property of the participants of a state association does not make part of the property of the state association.
Article 1234. Charter of State Association
1. The charter of a state association shall be approved by the state body (official) which took decision on its creation or by a body authorised by it and is a costituent document of this association.
2. The charter of a state association shall determine the order and sources of the generation of the property of the state association.
3. The charter of the state association, which is a commercial organization, along with data specified in part one of Article 48 (2) of this Code shal contain the data on the subject of activities of the state association.
CHAPTER 5.
Participation of the Republic of Belarus and its Administrative Territorial Units in Relations Regulated by Civil Legislation
Article 124. The Republic of Belarus, its Administrative Territorial Units as the Subjects of Civil Legislation
l. The Republic of Belarus, its administrative territorial units shall participate in relations regulated by civil legislation on equal principles with other participants of these relations—citizens and legal persons.
2. Unless it arises otherwise from a legislation or the peculiarities of the particular subjects, the norms determining the participation of legal persons in relations regulated by civil legislation shall apply to the subjects of civil legislation specified in Clause 1 of this Article.
Article 125. Procedure of Participation of the Republic of Belarus and its Administrative Territorial Units in Relations Regulated by Civil Legislation
1. The state bodies within the frameworks of their competence established by acts determining the status of these bodies may by their actions acquire and exercise property rights and duties and personal non-property rights and duties and act in court in the name of the Republic of Belarus.
2. Bodies of local administration or self-government within the frameworks of their competence established by acts determining the status of these bodies may by their actions acquire and exercise the rights and duties specified in Clause 1 of this Article in the name of the administrative territorial units.
3. In the instances and in accordance with the procedure provided for by legislation of the Republic of Belarus, other state bodies (not mentioned in this Article), legal persons and citizens may act in the name of the Republic of Belarus and its administrative territorial units, subject to special order of the Republic of Belarus and its administrative territorial units.
Article 126. Liability for Obligations of the Republic of Belarus and its Administrative Territorial Units
1. The Republic of Belarus and its administrative territorial units shall be liable for its obligations with the property belonging to it by right of ownership, except for property which may be only in state or communal ownership.
2. The Republic of Belarus and its administrative territorial units shall not be liable for obligations of legal persons created by them except for instances provided for by the legislation.
3. The Republic of Belarus shall not be liable for obligations of administrative territorial units.
4. Administrative territorial units shall not be liable for obligations of one another, nor for obligations of the Republic of Belarus.
5. The rules of Clauses 2-5 of this Article shall not extend to instances when the Republic of Belarus has assumed a guarantee (suretyship) for the obligations of the administrative territorial unit or legal person, or the said subjects have assumed a guarantee (suretyship) with regard to the obligations of the Republic of Belarus.
Article 127. Peculiarities of the Republic of Belarus and Administrative Territorial Units in Relations
Being Regulated by Civil Legislation with Participation of Foreign Legal Persons, Citizens, and States
The peculiarities of the liability of the Republic of Belarus and the administrative territorial units in relations regulated by civil legislation with the participation of foreign legal persons, citizens, and states shall be determined by the legislative acts.
SUBSECTION 3. OBJECTS OF CIVIL RIGHTS
CHAPTER 6.
General Provisions
Article 128. Types of Objects of Civil Rights
To objects of civil rights shall be relegated
things, including money and securities, other property, including property rights;
work and services;
protected information;
exclusive rights on the results of intellectual activity (intellectual property);
non-material benefits.
Article 129. Turnability of Objects of Civil Rights
1. Objects of civil rights may be freely alienated or be transferred from one person to another by way of universal legal succession (inheritance, reorganization of legal person) or by other means unless they have been withdrawn from turnover or are limited in turnover.
2. Types of objects of civil rights whose being in turnover is not permitted (objects withdrawn from turnover) must be expressly specified in a law.
Types of objects of civil rights which may belong only to determined participants of turnover or being of which in turnover is permitted by a special authorization (objects of limited turnability) shall be determined in accordance with the procedure established by the legislation.
3. Land and other natural resources may be alienated or pass from one person to another by other means to the extent that their turnover is permitted by legislation on land and other natural resources.
Article 130. Immovable and Movable Things
l. To immovable things (immovable property, immovable) shall be relegated land plots, subsoil plots, solitary water objects, and all that is firmly connected with the land, that is, objects whose movement without incommensurate damage to the purpose thereof is impossible, including forests, perennial plantings, buildings, and installations.
To immovable things also shall be relegated the enterprise as a whole (as the property complex), the aircrafts and sea vessels subject to the state registration, inland vessels, river-marine vessels, and space objects. Other property also may be relegated by the legislation to immovable things.
2. Things which are not relegated to immovable, including money and securities, shall be deemed to be movable property. The registration of rights to movable things shall not be required except for instances specified in a law.
Article 131. State Registration of Immovable Property, Rights to it and Transactions with it
l. The immovable property, rights to it and transactions with it are subject to the state registration in cases, provided by the legislative acts.
2. In the instances provided for by the legislation a special registration or recording of individual types of immovable property may be effectuated together with the state registration.
3. The body carrying out state registration of the immovable property, rights to it and transactions with it shall be obliged to certify the registration made by means of the issuance, for the applicant, of the certificate (certification card) on the state registration, or by execution of the registration record on the original of the document, expressing the content of the registered transaction.
4. The state registration of the immovable property, rights to it and transactions with it shall be public. The bodies, carrying out the state registration of the immovable property, rights to it and transactions with it, shall be obliged to provide necessary information for any person only about the rights and restrictions (burdening) of the rights on the specific object of the immovable property, existing at the date of providing the information. Summary information on the rights on objects of the immovable property is delivered only in cases, provided by the legislative acts.
5. A refusal of state registration of the immovable property, rights to it or transaction with it or the evading of registration by the respective body may be appealed to a court.
6. The procedure for state registration and the grounds for refusal of registration shall be established by the legislation on registration of the rights to immovable property and transactions with it.
Article 132. Enterprise
1. An enterprise as an object of rights shall be deemed to be a property complex used to effectuate entrepreneurial activity.
Within an enterprise as a property complex shall be all types of property intended for its activity, including land plots, buildings, installations, equipment, tools, raw material, products, rights of demand, debts, and also rights to designation which individualize the enterprise, its products, works and services (firm name, trademarks, service marks), and other exclusive rights, unless otherwise provided by the legislation or contract.
2. An enterprise as a whole or part thereof may be the object of a purchase-sale, pledge, lease, and other transactions connected with the establishment, change, and termination of rights to a thing.
Article 133. Indivisible Things
A thing, the division of which in kind is impossible without changing the purpose thereof, shall be deemed to be indivisible.
The peculiarities of the partition of a share in the right of ownership to an indivisible thing shall be determined by Articles 255 and 261 of this Code.
Article 134. Complex Things
If various thing form a single whole presupposing the use thereof for a common purpose, they shall be considered to be one thing (complex thing).
The operation of a transaction concluded with regard to a complex thing shall extend to all of its parts unless otherwise provided by a contract.
Article 135. Principal Thing and Appurtenance
A thing intended to serve another, principal thing and connected therewith by a common purpose (appurtenance) shall follow the fate of the principal thing unless otherwise provided by contract.
Article 136. Yield, Products, and Revenues
Proceeds received as a result of the use of property (yield, product, revenues) shall belong to the person using this property on legal grounds unless otherwise provided by the legislation, or by the contract concerning the use of this property.
Article 137. Animals
To animals shall apply the general rules on property insofar as not otherwise established by the legislation.
When exercising rights the cruel treatment of animals contrary to the principles of humaneness shall not be permitted.
Article 138. Individually-Determined Things and Things, Defined by Generic Attributes
1. An individually-determined thing shall be deemed to be a thing, distinguished from the other things on the grounds of the attributes, peculiar to this thing only. Individually-determined things are irreplaceable.
2. Things defined by generic attributes shall be deemed to be the things, having the attributes, peculiar to all thing of the same kind, and defined by the number, weight or measure. The things defined by generic attributes are replaceable.
Article 139. Protected Results of Intellectual Activity
In the instances and in accordance with the procedure established by this Code and other legislation an exclusive right (intellectual property) of a citizen or legal person shall be recognized to the protected results of intellectual activity and the means of individualization of the legal person equated to them or the means of individualization of a product or the work fulfilled or services (firm name, trademark, service mark, and others).
The use of the results of intellectual activity and means of individualization which are the object of exclusive rights may be exercised by third persons only with the consent of the possessor of the right.
Article 140. Official Secret and Commercial Secret
1. Information shall constitute an official or commercial secret when the information has real or potential commercial value by virtue of its being unknown to third persons, there is no free access to it on legal grounds, and the possessor of the information takes measures to protect its confidentiality. Information which cannot constitute an official or commercial secret shall be determined by the legislation.
2. Information constituting an official or commercial secret shall be protected by the means provided for by the legislation.
Persons who have received information which constitutes an official or commercial secret by illegal methods shall be obliged to compensate the losses caused. The same duty shall be placed on the employees who, contrary to the labor contract, have divulged an official or commercial secret, and on contracting parties who have done so despite a civil contract.
3. This Article is applied to protection of the state secrets, if it is not contradictory with the legislation on the state secret.
Article 141. Money (Currency)
1. The Belarusian Ruble shall be the legal means of payment obligatory for acceptance at nominal value throughout the entire territory of the Republic of Belarus.
Payments on the territory of the Republic of Belarus shall be effectuated in the form of cash and cashless settlements.
2. The instances, procedure, and conditions for the use of foreign currency on the territory of the Republic of Belarus shall be determined by the legislation.
Article 142. Currency Valuables
The types of property deemed to be currency valuables and the procedure for concluding transactions with them shall be determined by the legislation.
The right of ownership in currency valuables shall be defended in the Republic of Belarus on the common grounds.
CHAPTER 7
Securities
Article 143. Security
1. A security shall be a document certifying, in compliance with the established form and obligatory requisites, property rights, effectuation or transfer of which shall be possible only when presenting it. With the transfer of the security shall pass all rights in aggregate which are certified by it.
2. In the instances provided for by the legislation or in accordance with the procedure established by it, in order to exercise and transfer the rights certified by a security evidence of its being registered in a special register (ordinary or computerized) shall be sufficient.
Article 144. Types of Securities
There shall be relegated to securities: state bond, bond, bill of exchange, cheque, deposit certificate and savings certificate, bank savings book to the bearer, bill of lading, stock, privatization securities, and other documents which have been relegated to securities by the legislation on securities or in accordance with the procedure established by this legislation.
The securities may be issuing and non-issuing.
The issuing securities include bonds, stocks and other securities, relegated to such by the legislation.
Article 145. Requirements for Security
l. The types of rights which shall be certified by securities, the obligatory requisites of securities, the requirements for the form of a security, and other necessary requirements shall be determined by the legislation or in accordance with the procedure established by it.
2. The absence of obligatory requisites of a security or the failure of the security to conform to the form established for it shall entail the nullity thereof.
Article 146. Subjects of Rights Certified by Security
1. Rights certified by a security may belong to:
the bearer of the security (bearer security), or
the person named on the security (inscribed security), or
the person named on the security, who may himself exercise these rights or appoint by his instruction (order) another authorized person (order security).
2. The possibility of the issuance of securities of a specified type as inscribed, or (and) as order, or (and) as bearer securities may be excluded by the legislation.
Article 147. Transfer of Rights Relating to Security
1. In order to transfer to another person the rights certified by a bearer security it shall be sufficient to hand over the security to this person.
2. The rights certified by an inscribed security shall be transferred in the procedure established for the assignment of demands (cession). In accordance with Article 361 of this Code a person who has transferred the right relating to a security shall bear liability only for the invalidity of the respective demand, but not for the failure to perform it.
3. The rights relating to an order security shall be transferred by means of making an inscription of transfer on this security—an endorsement. The endorser shall bear liability not only for the existence of the right, but also for the effectuation thereof.
An endorsement made on a security shall pass all the rights certified by the security to the person to whom or to the order of whom the rights relating to the security are transferred—the endorsee. An endorsement may be in blank (without specifying the person to whom performance must be made) or to order (specifying the person to whom or to the order of whom performance must be made).
An endorsement may be limited only to a commission to exercise the rights certified by the security without the transfer of these rights to the endorsee (endorsement of entrustment). In this event the endorsee shall act as a representative.
Article 148. Performance Relating to Security
1. The person who has issued a security and all the persons who have endorsed it shall be liable to the legal possessor thereof jointly and severally. In the event of the satisfaction of the demand of the legal possessor of the security concerning the performance of the obligation certified by it by one or several persons from among those who are obliged before him according to the security, they shall acquire the right of a demand for indemnification (regression) against the other persons who are obliged with regard to the security.
2. A refusal to perform an obligation certified by a security by referring to the absence of grounds of the obligation or to its invalidity shall not be permitted. The possessor of a security who has discovered a forgery or a counterfeit security shall have the right to submit to the person who transferred the security to him a demand for proper performance of the obligation certified by the security and for compensation of losses.
Article 149. Reinstatement of Security
The rights relating to lost bearer securities and order securities shall be reinstated by a court in accordance with the procedure provided for by procedural legislation.
Article 150. Paperless Securities
1. In the instances determined by the legislation or in accordance with the procedure established by it, a person who has received a special permit (license) may fix the rights consolidated by an inscribed or order security, including such fixation in paperless form (with the assistance of computers etc.). The rules established for securities shall apply to this form of fixation of rights unless it arises otherwise from the peculiarities of the fixation.
The person who has effectuated the fixation of the right in paperless form shall be obliged upon the demand of the possessor of the right to issue a document to him certifying the consolidated right. The rights certified by means of the said fixation, the procedure for the official fixation of rights and rightholders, the procedure for the documentary confirmation of entries, and the procedure for performing operations with paperless securities shall be determined by the legislation.
2. Operations with paperless securities may be performed only by having recourse to the person who has officially performed the entry of the rights. The transfer, granting, and limitation of rights must be officially fixed by this person, who shall bear liability for the preservation of official entries, ensuring their confidentiality, the submission of correct data concerning such entries, and the performance of official entries concerning operations carried out.
CHAPTER 8
Nonmaterial Benefits and Defense Thereof
Article 151. Nonmaterial Benefits
1. Life and health, the dignity of the person, personal inviolability, honour and good name, business reputation, inviolability of private life, personal and family secrecy, the right of free movement, and choice of place of sojourn and residence, the right to name, copyright, other personal non-property rights and other nonmaterial benefits which belong to a citizen from birth or by virtue of the act of legislation shall be inalienable and not transferable by other means. In the instances and in accordance with the procedure provided for by the legislation, personal non-property rights and other nonmaterial benefits which belonged to a deceased person may be effectuated and defended by other persons, including heirs of the possessor of the right.
2. Nonmaterial benefits shall be defended in accordance with the civil legislation in the instances and procedure provided for by this legislation, and also in those instances and within those limits in which the use of the means of the defense of civil rights (Article 11) arises from the essence of the violated nonmaterial right and the character of the consequences of this violation.
Article 152. Compensation of Moral Harm
If moral harm has been caused to a citizen (physical or moral suffering) by actions violating his personal non-property rights or infringing on other nonmaterial benefits belonging to a citizen, and also in other instances provided for by the legislation, the citizen has the right to demand monetary compensation of the said harm from the offender.
When determining the amounts of contributory compensation of moral harm the court shall take into account the degree of fault of the offender and other circumstances deserving of attention. The court must also take into account the extent of physical and moral suffering connected with the individual peculiarities of the person to whom harm was caused.
Article 153. Defense of Honour, Dignity, and Business Reputation
1. A citizen shall have the right to demand through a court the refutation of information defaming his honour, dignity, or business reputation, unless the spreader of such information proves that it corresponds to reality.
Upon the demand of interested persons the defense of the honour and dignity of a citizen shall also be permitted after his death.
2. If information defaming the honour, dignity, or business reputation of the citizen has been spreaded in the mass media, it must be refuted in the same mass media.
If the said information is contained in a document issued by an organization, the document shall be subject to replacement or recall.
The procedure for refutation in other instances shall be established by a court.
3. A citizen with respect to whom the mass media have published information impinging upon his rights or interests protected by the legislation shall have the right to publication of his reply in the same mass media.
If the decision of a court has not been fulfilled, the court shall have the right to impose a fine on the offender to be recovered in the amount and in accordance with the procedure provided for by procedural legislation to the revenue of the Republic of Belarus. The payment of the fine shall not relieve the offender from the duty to fulfill the action provided for by the court decision.
5. A citizen with respect to whom information has been spreaded which defames his honour, dignity or business reputation shall have the right, together with the refutation of such information, to demand compensation of losses and moral harm caused by the spreading thereof.
6. If it is impossible to establish the person who has spreaded information defaming the honour, dignity, or business reputation of a citizen, the person with respect to whom such information has been spreaded shall have the right to apply to a court with a statement concerning recognition that the information being spreaded does not correspond to reality.
7. The rules of this Article concerning the defense of business reputation of a citizen respectively shall apply to the defense of the business reputation of a legal person, except for compensation of moral harm.
SUBSECTION 4.
TRANSACTIONS AND REPRESENTATION
CHAPTER 9
Transactions
§ 1. Concept, Types, and Forms of Transactions
Article 154. Concept of Transaction
The actions of citizens and legal persons directed towards the establishment, change, or termination of civil rights and duties shall be deemed to be transactions.
Article 155. Contracts and Unilateral Transactions
1. Transactions may be bilateral or multilateral (contracts), and unilateral.
2. A transaction, for the conclusion of which in accordance with the legislation or by agreement of the parties the expression of the will of one party is necessary and sufficient shall be considered to be unilateral.
3. The expression of the concordant will (actions) of two parties (bilateral transaction), or of three or more parties (multilateral transaction) shall be necessary for the conclusion of a contract.
Article 156. Duties Regarding Unilateral Transaction
A unilateral transaction shall create duties for the person who has concluded the transaction. It may create duties for other persons only in the instances established by the legislative acts or by agreement with those persons.
Article 157. Legal Regulation of Unilateral Transactions
The general provisions on obligations and on contracts shall apply to unilateral transactions respectively insofar as this is not contrary to a legislation or to the unilateral character and essence of the transaction.
Article 158. Transactions Concluded Under a Condition
1. A transaction shall be considered to be concluded under a condition suspensive if the parties have made the arising of rights and duties dependent upon a circumstance relative to which it is unknown as to whether this will ensue or not.
2. A transaction shall be considered to be concluded under a condition resolutive if the parties have made the termination of rights and duties dependent upon a circumstance relative to which it is unknown whether this will ensue or not.
3. If the ensuing of the condition is obstructed by a party not in good faith for whom the ensuing of the condition is disadvantageous, the condition shall be deemed to have ensued.
If the ensuing of the condition is facilitated by a party not in good faith for whom the ensuing of the condition is advantageous, the condition shall be deemed not to have ensued.
Article 159. Form of Transactions
1. Transactions shall be concluded orally or in written form (simple or notarial).
2. A transaction which may be concluded orally shall be considered to be concluded also when from the behaviour of the person his will to conclude the transaction is obvious.
3. Silence shall be deemed to be an expression of will to conclude a transaction in the instances provided for by the legislation or by agreement of the parties.
Article 160. Oral Transactions
1. A transaction for which the written (simple or notarial) form has not been established by the legislation or by agreement of the parties may be concluded orally.
2. Unless otherwise established by agreement of the parties, all transactions to be performed by those who concluded them themselves may be concluded orally, except for transactions for which the notarial form has been established and transactions the failure to comply with the simple written form of which entails their invalidity.
3. Transactions in performance of a contract concluded in written form may, by agreement of the parties, be concluded orally unless this is contrary to the legislation and a contract.
Article 161. Written Form of Transaction
I. A transaction in written form must be concluded by means of drawing up a document reflecting the content thereof and signed by the person or persons concluding the transaction, or by persons duly authorized by them.
Bilateral (multilateral) transactions may be concluded by the means established by Article 404(2) and (3) of this Code.
Additional requirements to which the form of the transaction must conform may be established by the legislation, and by agreement of the parties (conclusion on a letterhead of a specified form, affixing of seal, and others), and consequences provided for the failure to comply with these requirements. If such consequences have not been provided, the consequences of the failure to comply with the simple written form of a transaction shall apply (Article 163(1)).
2. The use when concluding a transaction of a facsimile reproduction of a signature with the assistance of mechanical or other means of copying, electronic digital signature, or other analogue of a signature in one's own hand shall be permitted in the instances and procedure provided for by the legislation, or by agreement of the parties.
3. If a citizen as a consequence of physical defect, illness, or illiteracy can not sign in his own hand, then at his request another citizen may sign the transaction. The signature of the last must be certified by a notary or by another official having the right to perform such a notarial action, specifying the reasons by virtue of which the person concluding the transaction could not sign it in his own hand. However, when concluding the transactions specified in Article 186(4) of this Code and powers of attorney to conclude them, the signature of he who signs the transaction may be certified also by the organization in which the citizen who can not sign in his own hand works or studies, by the organization which carries out the operation and maintenance of housing facilities in the place of residence or by the administration of the inpatient treatment institution in which the citizen undergoes treatment.
Article 162. Transactions Concluded in Simple Written Form
There must be concluded in simple written form, except for transactions requiring notarial certification:
1) transactions of legal persons between themselves and with citizens;
2) transactions of citizens between themselves for an amount exceeding not less than ten times the basic value, established by the legislation, unless otherwise provided by the legislation.
Compliance with the simple written form shall not be required for transactions which in accordance with Article 160 of this Code may be concluded orally.
Article 163. Consequences of Failure to Comply with Simple Written Form of Transaction
1. The failure to comply with the simple written form of a transaction shall deprive the parties of the right in the event of a dispute to refer in confirmation of the transaction and its conditions to witness testimony, but shall not deprive them of the right also to cite written and other evidence, not being the witness testimony.
2. In the instances expressly specified in a legislation or in the agreement of the parties the failure to comply with the simple written form of a transaction shall entail its invalidity.
3. The failure to comply with the simple written form of a foreign economic transaction shall entail the invalidity of the transaction
Article 164. Notarially Certified Transactions
1. The notarial certification of a transaction shall be effectuated by means of the performing on the document of an endorsement of certification corresponding to the requirements of Article 161 of this Code by a notary or other official having the right to perform such a notarial action.
2. Notarial certification of transactions shall be obligatory:
1) in the instances specified in a legislation;
2) in the instances provided for by agreement of the parties, although according to a legislation for transactions of the particular type this form is not required.
Article 165. State Registration of Transactions
1. Transactions with immovable property shall be subject to state registration in accordance with the procedure provided for by this Code and the legislation on the registration of immovable property, rights to it and transactions with it.
2. State registration of transactions with movable property of determined types may be established by the legislation.
Article 166. Consequences of Failure to Comply with Notarial Form of Transaction and Requirements for Registration Thereof
The failure to comply with the notarial form or the requirements concerning state registration of a transaction shall entail its invalidity. Such a transaction shall be considered to be void.
If one of the parties wholly or partially has performed a transaction requiring notarial certification, and the other party has evaded such certification of the transaction, the court shall have the right at the demand of the party who performed the transaction to deem the transaction to be valid. In this event subsequent notarial certification of the transaction shall not be required.
If a transaction requiring state registration has been concluded in the proper form but one of the parties evades the registration thereof, a court shall have the right at the demand of the other party to render a decision concerning registration of the transaction. In this event the transaction shall be registered in accordance with the decision of the court.
In the instances provided for by Clauses 2 and 3 of this Article the party who unjustifiably evades notarial certification or state registration of a transaction must compensate the other party for losses caused by the delay in concluding or registering the transaction.
§ 2. Invalidity of Transactions
Article 167. Contested and Void Transactions
1. A transaction shall be invalid on the grounds established by this Code or other legislative acts by virtue of being deemed such by a court (contested transaction) or irrespective of such deeming (void transaction).
2. A demand to establich the fact of voidness of the transaction and to apply the consequences of the invalidity may be submitted by any interested persons. The court has the right to establish the fact of voidness of the transaction at its own initiative. In this case the court apllies the consequences of the invalidity of the void transaction.
3. A demand to invalidate a contested transaction may be brought by the persons specified in this Code or in other legislative act, establishing the contestability of the transaction.
Article 168. General Provisions on Consequences of Invalidity of Transaction
1. An invalid transaction shall not entail legal consequences, except for those which are connected with its invalidity, and shall be invalid from the time of its conclusion. However, If it follows from the content of the transaction that it may be only terminated for a future time, the court deeming the transaction to be invalid shall terminate its operation for a future time.
2. In the event of the invalidity of a transaction, each of the parties shall be obliged to return to the other everything received according to the transaction, and if it is impossible to return that received in kind (including when that received is ex pressed in the use of property, work fulfilled, or service rendered), to compensate its value in money, unless other consequences of the invalidity of the transaction have been provided for by this Code or other legislative acts.
Article 169. Invalidity of Transaction Not Conforming to the Legislation
A transaction not corresponding to the requirements of the legislation shall be void unless the legislation establishes that such a transaction is contestable or provides other consequences for the violation.
Article 170. Invalidity of Transaction, Conclusion of Which is Prohibited by the Legislation
A transaction conclusion of which is prohibited by the legislation, shall be void.
When both parties to such a transaction have intent, in the event of performance of the transaction by both parties, everything received by them under the transaction shall be recovered to the revenue of the Republic of Belarus, and in the event of the performance of the transaction by one party, from the other party, everything received and everything due from it to the first party (in compensation of that received) shall be recovered for the revenue of the Republic of Belarus.
When only one party of such a transaction has intent, everything received by it under the transaction must be returned to the other party, and everything received by the latter or due to it in compensation of that performed shall be recovered to the revenue of the Republic of Belarus.
Article 171. Invalidity of Fictitious and Sham Transactions
l. A fictitious transaction, that is, a transaction concluded only for form, without the intention to create legal consequences corresponding to it, shall be void.
2. A sham transaction, that is, a transaction which is concluded for the purpose of concealing another transaction, shall be void. To the transaction which the parties actually had in view, taking into account the essence of the transaction, shall apply the rules relevant thereto.
Article 172. Invalidity of Transaction Concluded by Citizen Deemed to Lack Active Legal Capacity
1. A transaction concluded by a citizen deemed to lack active legal capacity as a consequence of mental insanity shall be void.
Each of the parties to such a transaction shall be obliged to return to the other everything received in kind, and if it is impossible to return that received in kind, to compensate its value in money.
The party having active legal capacity shall be obliged, in addition, to compensate to the other party the real damage incurred by it if the party having active legal capacity knew or should have known about the lack of active legal capacity of the other party.
2. In the interests of a citizen deemed to lack active legal capacity as a consequence of mental insanity, the transaction concluded by him may, at the demand of his trustee, be deemed by a court to be valid if it was concluded to the advantage of this citizen.
Article 173. Invalidity of Transaction Concluded by Minor Who Has Not Attained Fourteen Years of Age
1. A transaction concluded by a minor who has not attained fourteen years of age (juvenile) shall be void. To such transaction shall apply the rules provided for by Article 172(1), parts two and three, of this Code.
2. In the interests of the juvenile, a transaction concluded by him may at the demand of his parents, adoptive parents, or trustee be deemed by a court to be valid if it was concluded to the advantage of the juvenile.
3. The rules of this Article shall not extend to petty domestic and other transactions of juveniles which they have the right to conclude autonomously in accordance with Article 27 of this Code.
Article 174. Invalidity of Transaction of Legal Person Exceeding the Limits of Its Legal Capacity
A transaction concluded by a legal person which is contrary to the purposes of its activity, or by a legal person not having a special permit (license) to engage in the respective activity, may be deemed by a court to be invalid upon the suit of the founder (participant) of this legal person, or the state body carrying out control or supervision over the activity of the legal person, if the other party to the transaction knew or was obliged to know, by virtue of the act of legislation, about the illegality of transaction, but has concluded the deal intentionally or by negligence.
Article 175. Consequences of Limitation of Powers to Conclude Transaction
If the powers of a person to conclude a transaction have been limited by a contract, or the powers of the body of a legal person have been limited by its constituent documents, in comparison with those as determined in a power of attorney or in a legislation, or which may be considered to be obvious from the situation in which the transaction was concluded, and when concluding it such person or body exceeded these limitations, the transaction may be deemed by a court to be invalid upon the suit of the person in whose interests the limitations were established.
Article 176. Invalidity of Transaction Concluded by Minor from Fourteen to Eighteen Years of Age
A transaction concluded by a minor from fourteen to eighteen years of age without the consent of his parents, adoptive parents, or guardian, in the instances when such consent is required in accordance with Article 25 of this Code, may be deemed by a court to be invalid upon the suit of the parents, adoptive parents, or guardian. If such transaction is deemed to be invalid, the rules provided for by Article 172(1), paragraphs two and three, of this Code shall apply respectively.
Article 177. Invalidity of Transaction Concluded by Citizen Not Capable to Understand the Meaning of His Actions or Guide These Actions
1. A transaction concluded by a citizen, although having active legal capacity but being, at the time of concluding, in such a state that this citizen was not capable to understand the meaning of his actions or to guide these actions, may be deemed by a court to be invalid upon the suit of this citizen or other persons whose rights or interests protected by legislation have been violated as a result of the conclusion thereof.
2. A transaction concluded by a citizen who is subsequently deemed to lack active legal capacity may be deemed by a court to be invalid upon the suit of his trustee if it is proved that at the time of concluding the transaction the citizen was not capable to understand the meaning of his actions or guide these actions.
3. If a transaction is deemed to be invalid on the grounds of this Article, the rules provided for by Article 172(1), paragraphs two and three, of this Code shall apply respectively.
Article 178. Invalidity of Transaction Concluded by Citizen Limited by Court in Active Legal Capacity
1. A transaction relating to the disposition of property concluded without the consent of the guardian by a citizen limited by a court in active legal capacity as a consequence of the abusing alcoholic beverages, narcotics or psychotropic substances may be deemed by a court to be invalid upon the suit of the guardian. If such transaction has been deemed to be invalid, the rules provided for by Article 172(1), paragraphs two and three, of this Code shall apply respectively.
2. The rules of this Article shall not extend to petty domestic transactions which a citizen limited in active legal capacity has the right to conclude autonomously in accordance with Article 30 of this Code.
Article 179. Invalidity of Transaction Concluded Under Influence of Delusion
l. A transaction concluded under the influence of delusion having material significance may be deemed to be invalid by a court upon the suit of the party who acted under the influence of delusion.
Delusion relative to the essence of the transaction, the identity or such qualities of its subject which significantly reduce the possibility of using it for its purpose shall have material significance. Delusion relative to the motives for the transaction shall not have material significance.
2. If the transaction is deemed to be invalid as concluded under the influence of delusion, the rules provided for by Article 168(2) of this Code shall apply respectively.
In addition, the party at whose suit the transaction was deemed to be invalid shall have the right to demand from the other party compensation for real damage caused to it, if it would prove that the delusion arose through the fault of the other party. If this would not be proved, the party at whose suit the transaction was deemed to be invalid shall be obliged to compensate the other party at its demand for real damage caused to it, even if the delusion arose through circumstances not dependent upon the deluded party.
Article 180. Invalidity of Transaction Concluded Under Influence of Fraud, Coercion,
Threat, or Ill-intentioned Agreement of Representative of One Party with Other Party or Confluence of Grave Circumstances
1. A transaction concluded under the influence of fraud, coercion, threat, or ill- intentioned agreement of a representative of one party with the other party, and also a transaction which a person was forced to conclude as a consequence of the confluence of grave circumstances on conditions extremely disadvantageous for himself which the other party took advantage of (bondage transaction) may be deemed by a court to be invalid upon the suit of the victim.
2. If the transaction was deemed invalid on one of the grounds specified in Clause 1 of this Article, then the other party shall return to the victim everything received by it under the transaction, and if it is impossible to return everything received in kind, the value thereof shall be compensated in money. Property received under a transaction by the victim from the other party, and also that due to it in compensation of that transferred to the other party, shall be recovered to the revenue of the Republic of Belarus. If it is impossible to transfer the property to the revenue of the state in kind, the value thereof in money shall be recovered. In addition, the victim shall be compensated by the other party for real damage caused to it.
Article 181. Consequences of Invalidity of Part of Transaction
The invalidity of part of the transaction shall not entail the invalidity of its other parts if it is possible to suppose that the transaction would have been concluded also without including the invalid part thereof.
Article 182. Periods of Limitations Regarding Invalid Transactions
1. A suit concerning recognizing the fact that the transaction is void, and the application of the consequences of the invalidity of a void transaction may be brought within ten years from the date when the performance thereof commenced.
2. A suit to deem a contested transaction to be invalid or concerning the application of the consequences of its invalidity may be brought within a year from the date of the termination of the coercion or threat, under influence of which the transaction was concluded (Article 180(1)), or from the date when the plaintiff knew or should have known about other circumstances which are the grounds for deeming the transaction to be invalid.
CHAPTER 10.
Representation. Power of Attorney
Article 183. Representation
1. A transaction concluded by one person (representative) in the name of another person (person represented) by virtue of a power based on a power of attorney, legislation, or act of an authorized state body or body of local administration or self- government shall directly create, change, and terminate civil rights and duties of the person represented.
A power also may be obvious from the situation in which the representative acts (seller in retail trade, cashier, and others).
2. Persons acting, although in the interests of another but in their own name (executors in the event of inheritance, and so on), and also persons authorized to enter into negotiations relative to possible future transactions and temporal (anti-crisis) managers within the procedure of bankruptcy are not considered representatives.
3. A representative may not conclude transactions in the name of the person represented with respect to the representative himself personally. He also may not conclude such transactions with respect to another person whose representative he is simultaneously, except for instances of commercial representation.
4. The conclusion through a representative of a transaction which by its character may be concluded only personally, and likewise other transactions specified in a law, shall not be permitted.
Article 184. Conclusion of Transaction by Unauthorized Person
1. In the absence of powers to act in the name of another person or in the event of exceeding such powers, the transaction shall be considered to be concluded in the name of and in the interests of the person who concluded it unless the other person (person represented) subsequently approves expressly the particular transaction.
2. Subsequent approval of a transaction by the person represented shall create, change, and terminate civil rights and duties for him with regard to the particular transaction from the time of its conclusion.
Article 185. Commercial Representation
1. A person who permanently and autonomously is representing in the name of entrepreneurs when they conclude contracts in the sphere of entrepreneurial activity shall be a commercial representative.
2. The simultaneous commercial representation of various parties in a transaction shall be permitted with the consent of these parties and in other instances provided for by the legislation. In so doing, the commercial representative shall be obliged to perform the commissions given to him with the care of an ordinary entrepreneur.
A commercial representative shall have the right to demand the payment of stipulated remuneration and compensation for costs incurred by him when performing the commission from the parties to the contract in equal shares unless otherwise provided by agreement between them.
3. A commercial representation shall be effectuated on the basis of a contract concluded in written form and containing an indication of the powers of the representative, and in the absence of such indications, also a power of attorney.
A commercial representative shall be obliged to preserve the confidence of the information which became known to him concerning trade transactions also after the performance of the commission given to him.
4. The peculiarities of commercial representation in individual spheres of entrepreneurial activity shall be established by the legislation.
Article 186. Power of Attorney
1. A power of attorney shall be deemed to be a written power issued by one person to another person for representation to third persons, certified in accordance with the procedure, provided by this Article. The written power to conclude a transaction by a representative may be presented by the person represented directly to the respective third person.
2. A power of attorney to conclude transactions requiring the notarial form must be notarially certified, except for instances provided for by the legislative acts.
3. There shall be equated to notarially certified powers of attorney:
1) powers of attorney of military servicemen and other persons being treated in military hospitals, sanatoriums, and other military medical institutions certified by the head of such institution, his deputy for medical affairs, the senior doctor or doctor on duty;
2) powers of attorney of military servicemen, and, in places of location of military units, formations, institutions, and military training establishments, where there are not state notarial offices or other bodies which perform notarial actions, also the powers of attorney of workers and employees, working in these military units, formations, institutions and establishments, members of their families and members of the families of military servicemen, certified by the commander (head) of this unit, formation, institution, or educational establishment;
3) powers of attorney of persons held in institutions for the service of punishment in the form of arrest, restriction of freedom, deprivation of freedom, or places of detention, certified by heads of the respective institutions for the service of punishment or chiefs of administrations of the places of detention;
4) powers of attorney of full-age citizens with active legal capacity being in institutions for the social protection of the populace, which are certified by the administration of these institutions or the directors (their deputies) of respective bodies of social protection of the populace.
4. A power of attorney to receive earnings and other payment connected with labor relations, to receive the remuneration of authors and inventors, pensions, benefits, and scholarships, deposits of citizens in banks and non-bank credit and financial institutions and to receive mail (including money, send by mail, and parcels), may be certified also by the organization in which the principal works or studies, the organization which carries out the operation and maintenace of housing facilities in his place of residence, and the administration of the inpatient treatment institution in which he is being treated.
The powers of attorney to receive payments in banks may be also certified by the bank in which the current (clearing) account is open or the bank deposit is placed.
5. A power of attorney in the name of a legal person shall be issued over the signature of its director or other person authorized by the constituent documents to do so, with the seal of this organization affixed.
A power of attorney in the name of a legal person based on the ownership of the Republic of Belarus or its administrative territorial units for the receipt or issuance of money and other property valuables must be signed also by the chief (senior) accountant of this organization.
Article 187. Term of Validity of Power of Attorney
1. The term of validity of a power of attorney may not exceed three years. If the term has not been specified in the power of attorney, it shall retain force for a year from the date of the conclusion thereof. A power of attorney in which the date of its conclusion has not been specified shall be void.
2. A power of attorney certified by a notary and intended for the performance of actions abroad and not containing an indication of the term of its operation shall retain force until the revocation thereof by the person who has issued the power of attorney.
Article 188. Transfer of Power of Attorney
1. A person to whom the power of attorney was issued must personally perform those actions for which he is authorized. This person may transfer the performing of these actions to another person if authorized to do so by the power of attorney or forced to do it by virtue of circumstances in order to protect the interests of the person who issued the power of attorney.
2. A power of attorney issued by way of transfer must be notarially certified, except for instances provided for by Article 186(4) of this Code.
3. A term of validity of a power of attorney issued by way of transfer may not exceed the term of validity of the power of attorney on the basis of which it was issued.
4. The person who transferred the power of attorney to another person must notify the person who issued the power of attorney thereof and communicate to him necessary information about the person to whom the powers have been transferred. The failure to perform this duty shall place on the person who transferred the power liability for the actions of the person to whom he transferred the power as they were his own.
Article 189. Termination of Power of Attorney
1. The operation of a power of attorney shall terminate as a consequence of:
1) expiry of the term of validity of the power of attorney;
2) revocation of the power of attorney by the person who issued it;
3) renunciation by the person to whom the power of attorney was issued;
4) termination of the legal person in whose name the power of attorney was issued;
5) termination of the legal person to whom the power of attorney was issued;
6) death of the citizen who issued the power of attorney, deeming him to lack active legal capacity, limited active legal capacity, or to be missing;
7) death of the citizen to whom the power of attorney was issued, deeming him to lack active legal capacity, limited active legal capacity, or to be missing.
2. A person who issued the power of attorney may at any time revoke the power of attorney or the transfer of the power of attorney, and the person to whom the power of attorney was issued, may renounce it. An agreement concerning the waiver of these rights shall be void.
3. The transfer of a power of attorney shall lose force with the termination of the power of attorney.
Article 190. Consequences of Termination of Power of Attorney
1. A person who has issued a power of attorney and subsequently revoked it shall be obliged to notify the person to whom the power of attorney was issued about the revocation thereof, as well as third persons known to him with respect to whom the power of attorney was issued for representation. The same duty shall be placed on the legal successors of the person who issued a power of attorney in instances of the termination thereof on the grounds provided for in Article 189(1), Subclauses (4) and (6), of this Code.
2. The rights and duties which arose as a result of the actions of the person to whom a power of attorney is issued before this person knew or should have known about its termination shall retain force for the person who issued the power of attorney and his legal successors with respect to third persons. This rule shall not apply if the third person knew or should have known that the operation of the power of attorney had terminated.
3. With regard to the termination of a power of attorney the person to whom it was issued or his legal successors shall be obliged immediately to return the power of attorney.
SUBSECTION 5
TERMS. LIMITATION PERIOD
CHAPTER 11. Calculation of Terms
Article 191. Determination of Term
A term established by the legislation, a transaction, or designated by a court shall be determined by a calendar date or by the expiry of a period of time which shall be calculated by years, months, weeks, days, or hours.
A term may also be determined by specifying an event which must inevitably ensue.
Article 192. Commencement of Term Determined by Period of Time
The running of a term determined by a period of time shall commence on the following day after the calendar date or ensuing of the event by which its commencement is determined.
Article 193. Ending of Term Determined by Period of Time
1. A term calculated by years shall expire in the corresponding month and date of the last year of the term.
The rules for terms calculated by months shall apply to a term calculated by a half-year. For these purposes, a half-year is considered as equal to six months.
2. To a term calculated by quarters of a year shall apply the rules for terms calculated by months. The quarter shall be considered to be equal to three months, and the quarters shall be calculated from the beginning of the year.
3. A term calculated by months shall expire on the corresponding date of the last month of the term.
A term determined as a half-month shall be considered as a term calculated by days and shall be considered to be equal to fifteen days.
If the ending of a term calculated by months comes in such month in which there is no corresponding date, the term shall expire on the last day of that month.
4. A term calculated by weeks shall expire on the corresponding day of the last week of the term.
Article 194. Ending of Term on Non-Working Day
If the last day of a term comes on a non-working day, the next working day following shall be considered to be the day of ending of the term.
Article 195. Procedure for Performing Actions on Last Day of Term
1. If a term has been established for performing any action whatever, it may be fulfilled up to 24:00 of the last day of the term.
However, if this action had to be performed in an organization, the term shall expire at that hour when in this organization the respective operations terminate according to the established rules.
2. Written applications and notifications handed in to the post office, telegraph or other communication institution before 24:00 of the last day of the term shall be considered to be made within the term.
CHAPTER 12
Limitation Period
Article 196. Concept of Limitation Period
The term for the defense of a right upon the suit of a person whose right has been violated shall be deemed to be a Limitation Period.
Article 197. General Limitation Period
The general limitation period shall be three years.
Article 198. Special Limitation Periods
1. Special limitation periods may be established for individual types of demands by the legislation which are reduced or extended in comparison with the general period.
2. The rules of Articles 199-208 of this Code also cover special limitation period unless otherwise established by the legislation.
Article 199. Invalidity of Agreement to Change of Limitation Period
Limitation periods and the procedure for their calculation may not be changed by agreement of the parties.
The grounds for the suspension and interruption of the running of limitation periods shall be established by the legislative acts.
Article 200. Application of Limitation Period
1. A demand concerning the defense of a violated right shall be accepted for consideration by a court irrespective of the expiry of the limitation period.
2. Limitation period shall be applied by a court only upon the declaration of the party to the dispute to be made before the court renders the decision.
The expiry of the limitation period, about the application of which the party to the dispute has made the declaration, shall be the ground for the court to render a decision to reject the suit.
Article 201. Commencement of Limitation Period
1. The limitation period shall commence on the day when the person knew or should have known about the violation of its right. Exceptions from this rule shall be established by the legislative acts.
2. With regard to obligations with a specified period of performance, the limitation period shall commence upon the end of the period of performance.
With regard to obligations the term for the performance of which has not been determined or has been determined by the time of demand, the limitation period shall commence when the right arises for the creditor to submit a demand concerning the performance of the obligation, and if the debtor is granted an exemption term for performance of such demand, the calculation of limitation period shall commence upon the ending of the said term.
3. With regard to regressive obligations the limitation period shall commence on the moment of performance of the principal obligation.
Article 202. Limitation Period in Event of Change of Persons in Obligation
The change of persons in an obligation shall not entail a change of the limitation period and the procedure for its calculation.
Article 203. Suspension of Limitation Period
1. The limitation period shall be suspended;
1) if the bringing of suit has been hindered by an extraordinary and unavoidable circumstance under the particular conditions (force majeure);
2) if the plaintiff or defendant is in the Armed Forces of the Republic of Belarus, being under the martial law;
3) by virtue of a deferral for the performance of obligations established on the basis of a legislative act by the Government of the Republic of Belarus (moratorium);
4) by virtue of the suspension of the operation of the act of legislation regulating the respective relation.
2. The limitation period shall be suspended on condition that the circumstances specified in this Article arose or have continued to exist during the last six months of the limitation period, and if this period is equal to six months or less than six months, within the limitation period.
3. The running of the period shall continue from the date of termination of the circumstances being the grounds for suspension of the limitation. The remaining part of the period shall be extended up to six months, and if the limitation period is equal to six months or less than six months, up to the limitation period.
Article 204. Interruption of Running of Limitation Period
The running of the limitation period shall be interrupted by bringing suit in the established procedure, and also by the performance of actions by the obliged person which testify to recognition of the debt.
After the interruption, the running of the limitation period shall commence anew. The time which elapsed before interruption shall not be taken into consideration in the new period.
Article 205. Running of Limitation Period in Event of Leaving Suit Without Consideration
If a suit has been left without consideration by a court, then the running of the limitation period which commenced before bringing suit shall continue in the general procedure.
If a suit brought in a criminal case has been left by a court without consideration then the running of the limitation period which commenced before bringing suit shall be suspended until the entry into legal force of the judgment by which the suit was left without consideration. The time during which the limitation period was suspended shall not be included in the limitation period. In so doing, if the remaining part of the period is less than six months, it shall be extended up to six months.
Article 206. Restoration of Limitation Period
In exceptional instances, when the court deems the reason for the lapsing of the limitation period to be justifiable with regard to circumstances connected with the person of the plaintiff (grave illness, helpless state, illiteracy, and the like), the violated right of the citizen shall be subject to defense. The reasons for the lapse of a limitation period may be deemed to be justifiable if they occurred in the last six months of the limitation period, and if this period is equal to six months or less than six months, during the limitation period.
Article 207. Performance of Duty Upon Expiry of Limitation period
A debtor or other obliged person who has performed a duty upon the expiry of the limitation period shall not have the right to demand back that which has been performed, even though at the time of performance the said person did not know about the expiry of the limitation period.
Article 208. Application of Limitation Period to Additional Demands
The limitation period regarding additional demands (penalty, pledge, suretyship, and the like) shall expire with the expiry of the limitation period regarding the principal demand.
Article 209. Demands to Which Limitation Period Do Not Extend
Limitation period shall hot extend to:
1) demands concerning the defense of personal non-property rights and other nonmaterial benefits, except for instances provided for by the legislation;
2) demands of depositors against a bank concerning the issuance of deposits;
3) demands concerning compensation of harm caused to the life or health of a citizen. However, demands brought upon the expiry of three years from the time of the arising of the right to compensation for such harm shall be satisfied for not more than three years preceding the bringing of suit;
4) demands of the owner or other possessor concerning the elimination of any violations of his right, even though these violations were not connected with a deprivation of possession (Article 285);
5) other demands in the instances established by the legislative acts.
SECTION II. RIGHT OF OWNERSHIP AND OTHER RIGHTS IN REM
CHAPTER 13
General Provisions
Article 210. Content of Right of Ownership
l. The rights of possession, use, and disposition of his property shall belong to the owner.
2. The owner shall have the right at his discretion to perform with respect to property belonging to him any actions which are not contrary to a legislation, public benefit and security, not causing harm for the environment, historical and cultural valuables, not infringing the rights and the interests, protected by the legislation, of other persons, including the right to alienate his property in ownership to other persons, to transfer to other persons while remaining the owner the rights of possession, use, and disposition of the property, to pledge out property and to encumber it by other means, and to otherwise dispose of it.
The right of ownership of the property acquired by a unitary enterprise, state association or institution on contracts or other grounds is acuired by the owner of the property of this unitary enterprise, state association or institution.
3. The possession, use, and disposition of land and other natural resources to the extent that their turnover is permitted by the legislation shall be effectuated by the owner thereof freely unless this causes damage to the environment and violates the rights and legal interests of other persons.
4. The owner may transfer his property in trust management to another person (trustee manager). The transfer of property to trust management shall not entail the transfer of the right of ownership to the trust manager, who shall be obliged to effectuate the management of the property in the interests of the owner or a third person specified by the owner.
5. The right of ownership shall not be limited in time.
Article 211. Burden of Maintenance of Property
The owner shall bear the burden of maintenance of the property belonging to him unless otherwise provided by legislation or contract.
Article 212. Risk of Accidental Perishing of Property
The risk of accidental perishing or accidental damaging of property shall be borne by the owner thereof unless otherwise provided by legislation or by contract.
Article 213. Forms and Subjects of Right of Ownership
1. The property may be the state property or the private property.
2. The subjects of the right of the state property are the Republic of Belarus and administrative territorial units.
3. The subjects of the right of the private property are the natural persons and non-state legal persons.
The peculiarities of the acquisition and termination of the right of ownership to property and the possession, use, and disposition of it depending upon whether the property is in the ownership of a citizen or legal person or in the ownership of the Republic of Belarus or administrative territorial units, may be established by the legislation, or, in cases provided for by the Constitution of the Republic of Belarus, only by the law.
4. The rights of all owners shall be protected equally.
Article 214. Right of Ownership of Citizens and Legal Persons
1. Any property may be in the ownership of citizens and legal persons, except for individual types of property which in accordance with the legislation may not belong to citizens or legal persons.
2. The quantity and value of property in the ownership of citizens and legal persons shall not be limited, except for instances when such limitations have been established by the law for the purposes of national security, public order, protection of moralities, health of the population, rights and freedoms of the other persons. For the legal persons, such limitations can be established by the legislative acts.
3. The property, transferred as contributions (dues) by the founders (the participants, the members) to the commercial and noncommercial organizations (with the exception of the property transferred to the unitary enterprises, state associations or to the institutions, financed by the owner), as well as property, acquired by these legal persons, is in the ownership of these legal persons.
4. The founders (the participants, the members) of the commercial organization, in relation to the property, being in the ownership of this organization, have rights of obligation, defined in the constituent documents of this organization.
5. Public and religious organizations, charitable and other funds shall be the owners of property acquired by them and may use it only in order to achieve the purposes provided for by the constituent documents thereof.
The founders (participants, members) of these organizations shall lose the right for property transferred by them to the ownership of the respective organization. In the event of the liquidation of such organization the property thereof remaining after satisfaction of the demands of creditors shall be used for the purposes specified in its constituent documents.
Article 215. Right of State Ownership
1. The state property appears as the Republic's property (the property of the Republic of Belarus) and communal property (the property of administrative territorial units).
2. The Republic's property consists of the treasury of the Republic of Belarus and the property, consolidated to the Republic's legal persons in accordance with the acts of legislation.
The funds of the Republic's budget, gold and currency holdings, the other objects, being only in the ownership of the state, and other state property, not consolidated to the Republic's legal persons, form the treasury of the Republic of Belarus.
3. The communal property consists of the treasury of the administrative territorial unit and the property, consolidated to the communal legal persons in accordance with acts of legislation. The funds of the local budget and other communal property, not consolidated to the communal legal persons, form the treasury of the respective administrative territorial unit.
Article 216. The Property of the State Legal Persons
The property, being in the state ownership, may be consolidated to the state legal persons by the right of economic management or operative administration.
Article 217. Rights in rem of Persons Who Are Not Owners
1. The rights to a thing, in addition to the right of ownership, are, in particular
1) the right of economic management and the right of operative administration (Articles 276 and 277);
2) the right of inheritable possession for life of a land plot;
3) the right of permanent use of a land plot;
4) servitudes (Article 268).
2. The transfer of the right of ownership in property to another person shall not be grounds for the termination of other rights to a thing in this property.
3. The rights to a thing of a person who is not an owner shall be protected against the violation thereof in accordance with the procedure provided for by Article 286 of this Code.
Article 218. Privatization of State Property
Privatization of the property, being in the state ownership, is effectuated in accordance with the procedure, provided by the legislation on privatization.
For privatization of the property, being in the Republic's and communal ownership, the provisions, provided for by this Code, regulating the procedure of the acquisition and termination of the right of ownership, shall apply unless the legislation on privatization provide otherwise.
CHAPTER 14
Acquisition of Right of Ownership
Article 219. Grounds for Acquisition of Right of Ownership
1. The right of ownership to a new thing manufactured or created by a person for himself in compliance with the legislation shall be acquired by this person.
The right of ownership to yield, products, and revenues received as a result of the use of property shall be acquired on the grounds provided for by Article 136 of this Code.
2. The right of ownership to property having an owner may be acquired by another person on the basis of a contract of purchase-sale, barter, gift, or other transaction concerning the alienation of this property.
In the event of the death of a citizen the right of ownership to the property belonging to him shall pass by inheritance to other persons in accordance with the will or a law.
In the event of the reorganization of a legal person the right of ownership to the property belonging to it shall pass to the legal persons - legal successors of the reorganized legal person (Article 54).
Alienation of property to other person against the will of the owner is not permitted, with the exception of cases, provided by the legislation.
3. In the instances and in accordance with the procedure provided for by the legislation, a person may acquire the right of ownership in property which has no owner, in property whose owner is unknown, or in property which the owner has renounced or to which the owner has lost the right of ownership on other grounds provided for by the legislation.
4. The member of a housing cooperative, housing construction cooperative, country cottage (dacha) cooperative, garage cooperative or other consumer cooperative, other persons having the right to accumulation of share, who have fully made their share contribution to an apartment, country cottage (dacha), garage, or other premise granted to these persons by the cooperative shall acquire the right of ownership to the said property since the time of registration of this right in accordance with existing procedure.
Article 220. Arising of Right of Ownership in Newly Created Immovable Property
1. The right of ownership in a buildings or installations under construction and other newly created immovable property shall arise from the time of the end of creation, unless otherwise established by the legislation.
2. In the instances when newly created immovable property is subject to the state registration, the right of ownership shall arise from the time of such registration, unless otherwise established by the legislation.
3. Before the end of creation of the immovable property, or, in the respective cases, before its state registration, the rules on the right of ownership in the materials and other property, of which the immovable property is created, are applied to the property, unless otherwise established by the legislation.
Article 221. Converting
1. Unless otherwise provided by a contract, the right of ownership to a new movable thing manufactured by the person by means of converting materials which do not belong to him shall be acquired by the owner of the materials. However, if the value of the converting significantly exceeds the value of the materials, the right of ownership to a new thing shall be acquired by the person who, acting in good faith, has effectuated the converting for himself.
2. Unless otherwise provided by a contract, the owner of materials who has acquired the right of ownership in a thing, manufactured from these materials, shall be obliged to compensate the value of the converting to the person who has effectuated it, and in the event of the acquisition of the right of ownership to the new thing by this person, the latter shall be obliged to compensate the owner of the materials for the value thereof.
3. The owner of the materials who has lost them as a result of the actions not in good faith of the person who effectuated the converting shall have the right to demand the transfer of the new thing to his ownership and compensation of losses caused to him.
Article 222. Transferring to Ownership of Things Generally Accessible for Gathering
In the instances when in accordance with the legislation, general authorization by a particular owner, or in accordance with local custom the gathering of berries, fishing, and gathering or extraction of other generally accessible things and fauna is permitted in forests, waters, or on other territories, the right of ownership in the respective things shall be acquired by the person carrying out the gathering or extraction thereof.
Article 223. Unauthorized Building and Its Consequences
1. The unauthorized building (the unauthorized construction) is a construction, as well as extension, rising, reconstruction of the house, another building or structure, or creation of other immovable property on the land plot, which is not allocated for this purpose in accordance with the procedure, established by the legislation, or any before-mentioned actions, effectuated without obtaining the necessary permissions, or with the substantial deviations from the project, or with substantial violations of norms and rules of town-planning.
2. A person who has effectuated the unauthorized building shall not acquire the right of ownership in it. He shall not have the right to use and to dispose of the building, i.e. to sell, gift, lease out, or conclude other transactions.
The unauthorized construction shall be immediately terminated. The decision on continuation of the construction or on commissioning the building and its registration, with granting (if necessary) the land plot to the person, that have effectuated the unauthorized construction, or on demolition of the unauthorized building or on bringing it in the initial condition (being before extension, rising or reconstruction), shall be adopted by the corresponding bodies of local administration or self-government.
The demolition of the unauthorized building or bringing it in the initial condition shall be carried out by the person, that has effectuated the unauthorized construction, or at the expense of this person. The recovery of expenses for the demolition of the unauthorized building or bringing it in the initial condition, when the person which carried out the unauthorized building, refuses to fulfill the corresponding decision, is to be performed in the court order upon the demant of the body of local government and self-government or other persons in accordance with legislative acts.
3. The right of ownership in the unauthorized building may be recognized by a court for the person who has effectuated the building on a land plot not belonging to him on condition that this plot is granted to this person in accordance with the established procedure for the building constructed.
The right of ownership in the unauthorized building may not be recognized for the said persons if retention of the structure violates the rights and the interests, protected by the legislation, of the other persons, or creates a threat to the life and health of citizens.
Article 224. Time of Origin of Right of Ownership for Acquirer under Contract
l. The right of ownership for the acquirer of a thing under a contract shall arise from the time of the transfer thereof unless otherwise provided by the legislation or by a contract.
2. In instances when the contract on alienation of property is subject to state registration, the right of ownership for the acquirer shall arise from the time of such registration, unless otherwise established by the legislation.
Article 225. Transfer of Thing
1. The handing over of a thing to the acquirer shall be deemed to be the transfer, and likewise the handing over to a carrier for dispatch to the acquirer, or to the handing over a communications office for sending to the acquirer of a thing alienated without the obligation of delivery.
A thing shall be considered to be handed over to the acquirer from the time of its actual receipt in the possession of the acquirer or person specified by him.
2. If at the time of concluding a contract on the alienation of a thing it is already in the possession of the acquirer, the thing shall be deemed to be transferred to him from this time.
3. The transfer of a bill of lading or other document of goods disposition therefor shall be equated to the transfer of a thing.
Article 226. Ownerless Things
1. A thing which has no owner, or a thing the owner of which is unknown, or a thing, the right of ownership of which has been renounced by the owner, shall be ownerless.
2. Unless this is excluded by the rules of this Code on the acquisition of the right of ownership to a thing which the owner has renounced (Article 227), on find (Articles 228, 229), on neglected animals (Articles 231, 232), and treasure (Article 234), the right of ownership in ownerless movable things may be acquired by virtue of acquisitive prescription (Article 235).
3. Ownerless immovable things shall be accepted for recording by the bodies carrying out state registration of the immovable property, right to it and transactions with it upon the application of the respective state body.
Upon the expiry of three years from the day of the ownerless immovable property being registered, the body authorized to manage communal property may apply to a court with a demand to recognize the right of communal ownership in this thing.
A ownerless immovable property not deemed by decision of a court to have entered into communal ownership may be accepted anew into the possession, use, and disposition of the owner who left it, or acquired in ownership by virtue of acquisitive prescription (Article 235).
Article 227. Movable Things Which Owner Has Renounced
1. Movable things abandoned by the owner or otherwise left by him (abandoned things) with a view to renouncing the right of ownership may be transferred by other persons into their ownership in accordance with the procedure provided for by Clause 2 of this Article.
2. The person in whose ownership, possession, or use а land plot, water, or other object is, where the abandoned thing is situated, the value of which is obviously lower than an amount corresponding to five times the basic value, or abandoned scrap metal, defective products, the rejected products, the sunk logs (of wood floating), the dumps and the drains of mining, the production wastes and other kinds of wastes are located, has the right to transfer these things into the ownership thereof by starting to use them, or by performing the other actions, being the evidence of transferring the thing into ownership.
Other abandoned things shall enter into the ownership of the person who has entered into possession of them if they have been deemed to be ownerless by a court upon the application of this person.
Article 228. Find
l. The finder of a lost thing shall be obliged immediately to inform the person who lost it thereof or the owner of the thing or some other person known to him as having the right to receive it and shall return the found thing to this person.
If a thing has been found in a premise or on transport it shall be subject to being handed over to a person representing the possessor of this premise or means of transport. In this event the person to whom the find has been handed over shall acquire the rights and bear the duties of the person who found the thing.
2. If the person having the right to demand the return of a found thing or his whereabouts are unknown, the finder of the thing shall be obliged to declare the find to the militia or body of local administration or self-government.
3. The finder of a thing shall have the right to keep it or to hand it over for storage to the militia or body of local administration or self-government or to a person specified by them.
A perishable thing or a thing, the costs for storage of which are incommensurately great in comparison with its value may be realized by the finder of the thing, with receiving written evidence certifying the amount of the receipts. The money obtained from the sale of a found thing shall be subject to return to the person authorized to receive it.
4. The finder of a thing shall be liable for its loss or damage only in the event of intent or gross negligence and within the limits of the value of the thing.
Article 229. Acquisition of Right of Ownership in Find
1. If during six months from the time of declaring the find in the militia or body of local administration or self-government (Article 227(2)) the person authorized to receive the found thing has not been determined or does not himself declare his right to the thing to the person who found it, or to the militia or body of local administration or self-government, the finder of the thing shall acquire the right of ownership in it.
2. If the finder of a thing refuses to acquire the found thing in ownership, it shall enter communal ownership.
Article 230. Compensation for Expenses, Connected with Find, and Remuneration to Finder of Thing
1. The finder and returner of a thing to the person authorized to receive it shall have the right to receive from this person, and in instances of the thing passing into communal ownership, from the respective body of local administration or self-government, compensation of necessary expenses connected with storage, handing over, or realization of the thing, and also expenditures for revealing of the person authorized to receive the thing.
2. The finder of a thing shall have the right to demand, from the person authorized to receive the thing, remuneration for the find in the amount of up to 20% of the value of the thing. If a found thing is of value only for the person authorized to receive it, the amount of remuneration shall be determined by agreement with this person, or, if the agreement cannot be reached, by the court.
The right to remuneration shall not arise if the finder of the thing has not declared the find or has attempted to conceal it.
Article 231. Neglected Animals
1. A person who has detained neglected or stray livestock or other neglected domestic animals shall be obliged to return them to their owner, and if the owner of the animals or his whereabouts is unknown, not later than within three days from the time of detention to declare the animals found to the militia or body of local administration or self-government, which shall take measures to seek the owner.
2. During the search for the owner of the animals they may be left by the person who detained them with himself for maintenance and for use, or handed over for maintenance and use to another person having the necessary conditions for this. At the request of the person who detained neglected animals, the seeking of a person who has the necessary conditions for their maintenance and use and the transfer of the animals thereto shall be effectuated by the militia or body of local administration or self-government.
The person who has detained neglected animals and the person to whom they have been transferred for maintenance and use shall be obliged to maintain the animals properly and, if there is fault, shall be liable for the perishing and harm caused for the animals, within the limits of the value thereof.
Article 232. Acquisition of Right of Ownership to Neglected Animals
1. If within six months from the time of declaring the detention of neglected domestic animals the owner of these animals is not discovered or he himself does not declare his right to the animals, the right of ownership to the animals shall be acquired by the person by whom these animals are kept for maintenance and use.
If this person refuses to acquire in ownership the animals maintained by him, these animals shall enter into communal ownership and be used in accordance with the procedure determined by the body of local administration or self-government.
2. In the event of the appearance of the former owner of the animals after transferring these animals into the ownership of another person, the owner shall have the right, when there are circumstances demonstrating that the animals have preserved the affection for the former owner, or the circumstances, indicating that the new owner treats the animals cruelly or otherwise improperly, to demand their return on the conditions determined by an agreement with the new owner, and in the event of the failure to reach agreement, by a court.
Article 233. Compensation of Expenses for Maintenance of Neglected Animals and Remuneration for These Animals
1. The person who detained animals and the person by whom these animals were kept for maintenance and use, shall, in the event of the return of neglected domestic animals to the owner, have the right to compensation by their owner of necessary expenses connected with the maintenance of the animals, with setting off the advantages derived from the use thereof.
2. The person who has detained neglected domestic animals shall have the right to demand remuneration from the owner in accordance with Article 230(2) of this Code.
Article 234. Treasure
1. Treasure, that is, money or valuable objects buried in the earth or concealed by other means, the owner of which can not be established or by virtue of a legislation has lost the right to these objects, shall enter into the ownership of the person to whom the property belongs (land plot, building etc.) where the treasure was concealed, and the person who discovered the treasure, in equal shares, unless otherwise established by an agreement between them.
When a treasure is discovered by a person who has made diggings or searches for the valuables without the consent of the owner of the land plot or other property where the treasure was concealed, the treasure shall be subject to transfer to the owner of the land plot or other property where the treasure was discovered.
2. In the event of the discovery of a treasure containing material objects having distinctive spiritual, artistic and/or documentary merits and meeting one of the criteria for the selection of material objects to be granted the status of an historic and cultural valuable such objects are to be transfered to state ownership. In so doing, the owner of the land plot or other property where the treasure was concealed and the person who discovered the treasure shall have the right to receive remuneration in the amount of 50% of the value of the treasure. The remuneration shall be distributed between these persons in equal shares unless otherwise established by an agreement between them.
In the event of the discovery of such treasure by a person who has made diggings or searches for valuables without the consent of the owner of the property where the treasure was concealed, the remuneration shall not be paid to this person and shall be paid to the owner in full.
3. The rules of this Article shall not apply to persons within whose labor or employment duties are the conducting of diggings and searches directed towards the discovery of treasure.
Article 235. Acquisitive Prescription
1. A person, citizen or legal person, who is not the owner of property but in good faith, openly, and uninterruptedly possesses as his own immovable property for fifteen years or, for other property, for five years, shall acquire the right of ownership in such property (acquisitive prescription).
The right of ownership in immovable property and other property subject to state registration shall arise for the person who acquired this property by virtue of acquisitive prescription from the time of such registration.
2. Until the acquisition of the right of ownership in property by virtue of acquisitive prescription, the person possessing the property as his own shall have the right to defend his possession against third persons who are not the owners of the property, and also who do not have the rights to possession thereof by virtue of another ground provided for by the legislation or contract.
3. A person referring to the prescription of possession may join to the time of his possession all of the time during which this property was possessed by that whom this person is the legal successor.
4.The running of the period of acquisitive prescription with respect to things kept by a person from whose possession they may be claimed in accordance with Articles 282-284 and 286 of this Code shall commence from the next day after expiry of the limitation period for the corresponding demands.
CHAPTER 15
Termination of Right of Ownership
Article 236. Grounds for Termination of Right of Ownership
1. The right of ownership shall terminate in the event of the alienation by the owner of his property to other persons, renunciation of the right of ownership by the owner, perishing or destruction of the property, and the loss of the right of ownership to property in other instances provided for by the legislation.
2. The compulsory withdrawal from the owner of property shall not be permitted except for instances when on the grounds provided for by the legislation, or in accordance with the court decision, it shall be carried out by:
1) levying execution on property for obligations (Article 238);
2) alienation of property which by virtue of the act of legislation can not belong to the particular person (Article 239);
3) alienation of immovable property in connection with the withdrawal of a land plot (Article 240);
4) purchase of carelessly maintained cultural valuables (Article 241) and of domestic animals (Article 242);
5) requisition (Article 243);
6) confiscation (Article 244);
7) alienation of property in the instances provided for by Article 254(4), Article 266(2), and Article 271 of this Code;
8) privatization (Article 218);
9) nationalization (Article 245).
Article 237. Renunciation of Right of Ownership
A citizen or legal person may renounce the right of ownership in property belonging to him, so declaring or having performed other actions which specifically testify to the elimination of the possession, use, and disposition of the property without the intention to preserve any rights whatever to such property.
The renunciation of the right of ownership shall not entail the termination of the rights and duties of the owner with respect to the corresponding property until the time of the acquisition of the right of ownership thereto by another person, except for the cases when this property is utilized or destructed in accordance with the legislation.
Article 238. Levy of Execution on Property for Obligations of Owner
1. The withdrawal of property by means of levying execution on it with regard to obligations of the owner shall be done on the basis of the decision of a court, unless another procedure for levy of execution has been provided for by the legislation or by contract.
2. The right of ownership in property on which execution is levied shall terminate for the owner from the time of arising the right of ownership in the withdrawn property for the person to whom this property is transferred.
Article 239. Termination of Right of Ownership for Person in Property Which Can Not Belong to Him
1. If on the grounds, permitted by a law, the property which by virtue of legislation can not belong to person, turns out to be in the ownership of a person, this property must be alienated by the owner within a year from the time of arising the right of ownership in the property, unless another term has been established by the legislation.
2. In instances when the property has not been alienated by the owner within the periods specified in Clause 1 of this Article, such property, taking into consideration its character and purpose, shall, by decision of a court rendered upon the application of a state body or body of local administration or self-government, be subject to compulsory sale, with transfer to the former owner of the amounts received, or the transfer to state or communal ownership, with compensation of the value of the property to the former owner, determined by a court. In so doing, the expenditures for alienation (safe custody) of the property shall be deducted.
3. If in the ownership of a citizen or legal person on the grounds permitted by the legislation there turns out to be a thing for acquisition of which a special authorization is necessary, the issuance of which has been refused for the owner, this thing shall be subject to alienation in accordance with the procedure established for property which can not belong to the particular owner.
In such case, alienation of the thing is permitted subject to observance of the procedure for turnover of the corresponding property, established by the legislation; the thing can be alienated only to the person, having the specified permission, or to the state.
Article 240. Alienation of Immovable Property in Connection with Withdrawal of Land Plot on Which It Is Situated
1. When the withdrawal of a land plot for state or communal needs or in view of the improper use of land is impossible without the termination of the right of ownership in buildings, installations, or other immovable property situated on the land plot, this property may be withdrawn from the owner by means of the purchase by the state or sale at public sales in accordance with the procedure provided for by the legislation.
The demand to withdraw immovable property shall not be subject to satisfaction if the state body or body of local administration or self-government which has applied to a court with this demand does not prove that the use of the land plot for the purposes for which it is being withdrawn is impossible without terminating the right of ownership to the particular immovable property.
2. The rules of this Article respectively shall apply in the event of termination of the right of ownership to immovable property in connection with the withdrawal of mining allotments and other plots on which property is situated.
Article 241. Purchase of Carelessly Maintained Cultural Valuables
In instances when the owner of cultural valuables relegated in accordance with the legislation to the category of specially valuable and protected by the state carelessly maintains these valuables, which threatens them with their losing their significance, such valuables may by decision of a court be withdrawn from the owner through purchase by the state or sale at public sales.
In the event of the purchase of cultural valuables, their value shall be compensated for the owner in the amount established by agreement of the parties, and in the event of a dispute, by a court. In the event of the sale at public sales the amount obtained from the sale shall be transferred to the owner, less the expenses for holding the public sales.
Article 242. Purchase of Domestic Animals in Event of Improper Treatment Thereof
When the owner of domestic animals treats them in clear contravention of the requirements of the rules established on the basis of a legislation and the norms accepted in society for the humane attitude towards animals, these animals may be withdrawn from the owner by means of the purchase thereof by the person who has brought the respective demand in court. The price of the purchase shall be determined by agreement of the parties, and in the event of a dispute, by a court.
Article 243. Requisition
1. In instances of natural disasters, accidents, epidemics, epizootics, and other extraordinary circumstances, the property may, in the interests of society by decision of state bodies, be withdrawn from the owner in accordance with the procedure and on the conditions established by the legislation with payment of the value of the property to him (requisition).
2. The valuation according to which the value of the requisitioned property is compensated to the owner may be contested by the owner in a court.
3. The person whose property was requisitioned shall have the right, when the existence of the circumstances, in connection with which the requisition was made, has terminated, to demand in court for the return to him of the property which has been preserved.
Article 244. Confiscation
In the instances provided for by the legislation property may be withdrawn without compensation from the owner by decision of a court in the form of a sanction for committing a crime or other violation of legislation (confiscation). However, confiscation of property in the administrative procedure is permitted only subject to observance of the conditions and the procedure, provided by the law. The decision on the confiscation, adopted in the administrative procedure, may be appealed to the court.
Article 245. Nationalization
Transferring the property, being in the ownership of the citizens and the legal persons, into the state property by means of its nationalization is permitted only on the grounds of the law on the procedure and conditions of nationalization of this property, and with timely and full compensation of the cost of property and of other losses, caused by the withdrawal, to the person, the property of which was nationalized.
CHAPTER 16
Common Ownership
Article 246. Concept and Grounds of Origin of Common Ownership
1. Property in the ownership of two or several persons shall belong to them by right of common ownership.
2. Property may be in common ownership with the determination of the share of each of the owners in the right of ownership (share ownership) or without the determination of such shares (joint ownership).
3. Common ownership to property shall be share ownership, except for instances when the formation of joint ownership to this property has been permitted by the legislative acts.
4. Common ownership shall arise when two or several persons enter into the ownership of property which can not be divided without changing its purpose (indivisible things), or is not subject to division by virtue of a legislation.
Common ownership in divisible property shall arise in the instances provided for by the legislation or contract.
5. By agreement of the participants of joint ownership, and, in the event of not achieving consent, by decision of a court, the share ownership of these persons may be established for common property.
Article 247. Determination of Shares in Right of Share Ownership
1. If the shares of the participants of share ownership can not be determined on the basis of the act of legislation and was not established by agreement of all of its participants, the shares shall be considered to be equal.
2. The procedure for the determination and change of their shares may be established by agreement of all the participants of share ownership depending upon the contribution of each of them in the formation and growth of the common property.
3. A participant of share ownership who has effectuated at his own expense while complying with the established procedure for the use of common property indivisible improvements of this property shall have the right to a corresponding increase of his share in the right to common property.
Divisible improvements of common property, unless otherwise provided by agreement of the participants of the share ownership, shall enter into the ownership of those participants who produced them.
Article 248. Consequences of rising, extension or reconstruction of the dwelling house or other structure, being in common share ownership
If the owner, with observance of the established rules, at own expense, has enlarged the area of the house or other structure, being in the share ownership, by means of extension, rising or reconstruction, then, upon the demand of this owner, the shares in the common ownership in the house or construction and the procedure of using the premises in it are subjects to appropriate changes.
Article 249. Disposition of Property in Share Ownership
1. The disposition of property in share ownership shall be effectuated by agreement of all of its participants.
2. A participant of share ownership shall have the right at his discretion to sell, gift, bequeath, or pledge his share or to otherwise dispose of it while complying, in the event of alienation for payment, with the rules provided for by Article 253 of this Code.
Article 250. Possession and Use of Property in Share Ownership
1. The possession and use of property in share ownership shall be effectuated by the agreement of all its participants, and if consent is not achieved, in accordance with the procedure established by a court.
2. The participant of share ownership shall have the right for providing to him, in possession and using, of the part of the common property, proportional to the share of this participant, or, if this is impossible, has the right to claim for the appropriate compensation from the other participants, possessing and using the property which comprise the share of this participant.
Article 251. Yield, Products, and Revenues from Use of Property in Share Ownership
The yield, products, and revenues from the use of property in share ownership shall become part of the common property and be distributed among the participants of participatory ownership commensurately with their shares unless otherwise provided by the agreement between them.
Article 252. Expenses for Maintenance of Property in Share Ownership
1. Each participant of share ownership shall be obliged, in proportion to their shares to participate in the payment of taxes, charges, and other payments relating to the common property, and also the costs for its maintenance and preservation, unless otherwise provided by the legislation or by the agreement.
2. The expenses, which are not necessary and are made by one of the owners without the consent of the others, shall fall on this owner only. Any disputes arising in this respect are subject to the settlement in the judicial procedure.
Article 253. Preferential Right of Purchase of the Share in the Right of Common Ownership
1. In the event of the sale of a share in the right of common ownership to the third person the remaining participants of share ownership shall have the preferential right of purchase of the share being sold at the price for which it is being sold and on other equal conditions, except for sales at a public sale.
The public sale for the sale of the share in the right of common ownership may, in the absence of consent thereto of all the participants of share ownership, be held in the instances provided for by Article 258 of this Code, and in the other instances provided for by the legislation.
2. The seller of a share shall be obliged to notify in written form the remaining participants of share ownership of the intention to sell his share to the third person, specifying the price and other conditions on which he is selling it. If the other participants of share ownership refuse to purchase or do not acquire the share being sold in the right of ownership in immovable property within a month, and in the right of ownership in other property, within ten days from the date of notification, the seller shall have the right to sell his share to any person.
3. In the event of the sale of a share in violation of the preferential right of purchase, any other participant of share ownership shall have the right within three months to demand in a judicial proceeding the transfer to him of the rights and duties of the purchaser.
4. The assignment of a preferential right of purchase of the share shall not be permitted.
5. The rules of this Article shall apply also when alienating a share under a contract of barter.
Article 254. Time of Transfer of Share in Right of Common Ownership to Acquirer Under Contract
The share in the right of common ownership shall pass to the acquirer under a contract from the time of conclusion of the contract unless otherwise provided by an agreement of the parties.
The time of transfer of a share in the right of common ownership under a contract subject to state registration shall be determined in accordance with Article 224(2) of this Code.
Article 255. Division of Property in Share Ownership and Partition of Share Therefrom
1. Property in common share ownership may be divided between its participants by an agreement between them.
2. A participant of common share ownership shall have the right to demand the partition of his share from the common property.
3. If the participants of share ownership do not reach agreement concerning the ways and conditions for the division of common property or partition of the share of one of them, the participant of share ownership shall have the right in a judicial proceeding to demand the partition of his share in kind from the common property.
If the partition of a share in kind is not permitted by the legislation or is impossible without incommensurate damage to property in common ownership, the partitioning owner shall have the right to payment to him of the value of his share by the other participants of share ownership.
4. The incommensurateness of property partitionable in kind to a participant of share ownership on the basis of this Article to his share in the right of ownership shall be eliminated by the payment of a corresponding monetary amount or other compensation.
The payment to a participant of share ownership by the remaining owners of compensation in place of the partition of his share in kind shall be permitted with his consent. In instances when the share of the respective owner is insignificant and can not be truly partitioned and he does not have a material interest in the use of the common property, a court may also, in the absence of the consent of this owner, oblige this owner to transfer his share, to the other participants, with payment of the compensation to this owner.
5. With the receipt of the compensation in accordance with this Article the owner shall lose the right to the share in the common property.
Article 256. Possession, Use, and Disposition of Property in Joint Ownership
l. The participants of joint ownership, unless otherwise provided by agreement between them, shall possess and use common property in common.
2. The disposition of property in joint ownership shall be effectuated by the consent of all the participants, which shall be presupposed irrespective as to which of the participants has concluded the transaction with regard to disposition of the property. This rule does not cover immovable property for the disposition of which a written consent of all participans of joint ownership is required.
3. Each of the participants of joint ownership shall have the right to conclude transactions relating to the disposition of common property unless it arises otherwise from the agreement of all the participants. A transaction concluded by one of the participants of joint ownership which is connected with the disposition of common property may be deemed to be invalid at the demand of the remaining participants for reasons that the participant who concluded the transaction lacked the necessary powers only if it is proved that the other party to the transaction knew or knowingly should have known about this (Article 175).
4. The rules of this Article shall apply insofar as not otherwise established for individual types of joint ownership by the legislation.
Article 257. Division of Property in Joint Ownership and Partition of Share Therefrom
1. The separation of common property between participants of joint ownership, and also the partition of the share of one of them, may be effectuated after the preliminary determination of the share of each of the participants in the right to common property.
2. In the event of the separation of common property and the partition of a share therefrom, unless otherwise provided by legislation or by agreement of the participants, their shares shall be deemed to be equal.
3. The grounds and procedure for the separation of common property and the partition of the share therefrom shall be determined according to the rules of Article 255 of this Code insofar as otherwise has not been established for individual types of joint ownership by the legislation and does not arise from the essence of the relations of the participants of joint ownership.
Article 258. Levying Execution on Share in Common Property
The creditor of a participant of share or joint ownership shall, in the event that the owner's other property is insufficient, have the right to submit a demand concerning partition of the share of the debtor in the common property in order to levy execution on it.
If in such instances the apportionment of the share in kind is impossible or the other participants of share or joint ownership raise objections to this, the creditor shall have the right to demand the sale by the debtor of his share to the other participants of common ownership at a price commensurate with the market value of this share, with the assets received from the sale being applied to repayment of the debt.
In the event of the refusal of the remaining participants of common ownership to acquire the share of the debtor, the creditor shall have the right to demand in court the levy of execution on the share of the debtor in the right of common ownership by means of the sale of this share at a public sale.
Article 259. Common Ownership of Spouses
1. Property acquired by spouses during marriage shall be in their joint ownership unless another regime for this property has been established by a contract between them.
2. The property which belonged to each of the spouses before marriage, and also received by one of the spouses during marriage as a gift or by way of inheriting, shall be in his ownership.
Things of individual use (clothing, footwear, and others), except for jewellery and other articles of embellishment, although acquired during the marriage at the expense of the common assets of the spouses, shall be deemed to be the ownership of that spouse who used them.
The property of each spouse may be deemed to be their joint ownership if it is established that during the marriage investments were made at the expense of the common property of the spouses or the personal property of the other spouse which significantly increased the value of this property (capital repair, reconstruction, re-equipping, and others). This rule shall not apply if a contract between the spouses has provided otherwise.
3. Execution may be levied with regard to the obligations of one spouse on property in his ownership, and also on his share in the common property of the spouses which would have been due to him in the event of separation of this property. Levying the execution on the property of the unitary enterprise, belonging to the spouses by the right of joint ownership, shall not be permitted.
31. At the separation of property which is in common ownership of spouses, the spouse of a participant of an economic partnership, limited liability company or additional liability company has the right to demand, in court order, the recognition of his right to the due part of the share of the other spouse in the charter capital of the respective partnership or company.
In the case of recognition by the court of the right of the spouse of a participant of an economic partnership, limited liability company or additional liability company to the part of the share of the latter in the charter capital of the respective partnership or company which due to him, the former has the right, with consent of other participants of this partnership or company, to become its participant or to demand the payment of the value of the part of the share of his spouse in the charter capital or the delivery of the property of such value in kind. At that, the refusal to admit to participants of the respective partnership or company entails the obligation of this partnerhsip or company to pay to the spouse the value of the part of the share of his spouse which is due to him or to deliver the property of such value in kind.
The determination of the value of the part of the share in the charter capital of the partnership or company and its payment or delivery of the property in kind of such value is performed in accordance with Article 64 (2) of this Code in the period stipulated by the constituent documents of this partnership or company, but not later than twelve months from the date of the presentation by the spouse of the corresponding demand.
The rules of parts one and two of this clause extend to the cases of separation of the property which is in joint ownership of spouses one of which is a participant of a productive cooperative. At that the determination of the value of the part of the share of the spouse in the property of the productive cooperative and its payment or delivery of the property of such value in kind are performed in accordance with Article 111 (1) of this Code in the period stipulated by the charter of the productive cooperative, but not later than twelve months from the day of the presentation by the spouse of the corresponding demand.
4. The rules for determining the shares of spouses in common property in the event of the separation thereof and the procedure for such separation shall be established by legislation on marriage and the family.
Article 260. Ownership of Peasant (Farming) Household
l. The property of a peasant (farming) household shall belong to its members by right of joint ownership unless otherwise established by the legislation or a contract between them.
2. The plantings, the buildings for production purposes and other buildings, the amelioration structures and other structures, productive and draft livestock, poultry, agricultural and other machinery and equipment, means of transport, tools, the unitary enterprises formed by the economy and other property acquired for the economy for common means of its members.
3. The yield, products, and revenues received as a result of the activity of the peasant (farming) household shall be the common property of the members of the peasant (farming) household and shall be used by agreement between them.
Article 261. Separation of Property of Peasant (Farming) Household
In the event of the termination of a peasant (farming) household in connection with the withdrawal therefrom of all of its members or on other grounds, the common property shall be subject to separation according to the rules provided for by Articles 255 and 257 of this Code.
The land plot, unitary enterprise and means of production belonging to the peasant (farming) household shall not be subject to separation in the event of the withdrawal of one of its members from the household. The person withdrawing from the household shall have the right to obtain monetary compensation commensurate with his share in the common ownership in such property.
In the instances provided for by Clauses 1 and 2 of this Article the shares of members of a peasant (farming) household in the right of joint ownership to the property of the household shall be deemed to be equal unless otherwise established by an agreement between them.
CHAPTER 17
Rights In Rem in Immovable Property
Article 262. Rights In Rem in Land
The land plots may be in ownership in accordance with the land legislation.
The land plots may be granted by the owners of these plots to other persons by the right of inheritable possession for life, the right of permanent using, and to fixed-term using, including leasing.
The person, not being the owner of the land plot, shall exercise the rights of possession and using of the land plot, belonging to this person, under the conditions and within the limits, established by the legislation and by the contract with the owner of the land plot.
Unless otherwise provided by the legislation or by the contract, the possessor of the land plot, not being the owner, shall have no right to dispose of this plot.
Lands of agricultural or other intended purpose, the use of which for other purposes is not permitted or is limited, shall be determined by the land legislation. The use of a land plot relegated to such lands may be effectuated within the limits determined by its intended purpose.
The boundaries of the land plot shall be determined on the grounds of the documents, issued in accordance with the procedure determined by the land legislation.
Article 263. Land Plots of Common Use. Access to Land Plot
1. Citizens shall have the right freely, without any authorizations whatever, to be on land plots not closed off for general access which are in the ownership of the Republic of Belarus, and to use natural objects on these plots within the limits permitted by the legislation.
2. If a land plot is not fenced off or the owner (possessor, user) thereof has not clearly designated by other means that entry to the plot is not permitted without his authorization, any person may walk across this plot on condition that this does not cause damage or disturbance to the owner (possessor, user).
Article 264. Building on Land Plot
The owner (user) of a land plot may construct buildings and installations thereon, effectuate the reconstruction or demolition thereof; the owner also may authorize construction on this plot to other persons. These rights shall be effectuated on condition of compliance with town-development and construction norms and rules, other relevant norms and rules, as well as the requirements of the land legislation.
Unless otherwise provided by the legislation or a contract, the owner (possessor, user) of a land plot shall acquire the right of ownership in a building, installation, and other immovable property constructed or created by him for himself on the plot belonging to him.
The consequences of unauthorized building effectuated by the owner (possessor, user) on his land plot are determined by Article 223 of this Code.
Article 265. Right to Use Land Plot by Owner of Immovable Property Located on It
1. The owner of a building, installation, and other immovable property on a land plot which belongs to another person shall have the right of use of the part of the land plot, granted by such person, under this immovable property.
Unless it arises otherwise from the act of legislation, or from the decision on granting the land being in state ownership, or from the contract, the owner of the building or installation shall have the right of permanent use of the part of the land plot on which this immovable property is located.
2. In the event of the transfer of the right of ownership to the immovable property, located on another's land plot, to another person, this person shall acquire the right of use of the respective part of the land plot on the same conditions and in the same amount as the previous owner of the immovable property.
The transfer of the right of ownership in a land plot shall not be the ground for the termination or change of the right to use this plot which belongs to the owner of the immovable property.
3. The owner of an immovable property, located on another's land plot, shall have the right to possess, use, and dispose of this immovable property at his discretion, including the demolition of the respective buildings and installations insofar as this is not contrary to the conditions of use of the particular plot established by the legislation or by contract.
Article 266. Consequences of Loss by Owner of Immovable Property of the Right to Use Land Plot
1. In the event of the termination of the right of use of a land plot granted to the owner of immovable property located on this plot (Article 265), the rights to an immovable property left by its owner on the land plot shall be determined in accordance with an agreement between the owner of the plot and the owner of the respective immovable property.
2. In the absence of or the failure to reach an agreement specified in Clause 1 of this Article, the consequences of the termination of the right of use of the land plot shall be determined by a court upon the demand of the owner of the land plot or the owner of the immovable property.
The owner of a land plot shall have the right to demand in court that the owner of an immovable property shall, after termination of the right of use of a plot, free it of the immovable property and bring the plot into its initial condition.
In instances when the demolition of a building or installation on a land plot has been prohibited in accordance with the legislation (dwelling houses, immovable material historic and cultural valuables, and so forth), or it not subject to effectuation in view of the value of the building or installation clearly exceeding the value of the land allotted beneath it, taking into account the grounds for the termination of the right of use of the land plot and upon the respective demands of the parties being submitted, the court may: recognize the right of the owner of the immovable property to acquire the right in rem in land plot on which this immovable property is located, or recognize the right of the owner of the land plot to acquire the immovables left thereon, or establish conditions for the use of the land plot by the owner of the immovable property for a new term.
3. The rules of this Article shall not apply when a land plot is withdrawn for state needs, and also when the rights to a land plot are terminated in view of its improper use.
Article 267. Transfer of Right to Land Plot in Event of Alienation of Buildings or Installations Located on It
In the event of the transfer of the right of ownership to a building or installation which belonged to the owner of a land plot on which it is located, the rights to the land plot determined by agreement of the parties shall pass to the acquirer of the building or installation.
Unless otherwise provided for by a contract on alienation of the building or installation, to the acquirer shall pass the right of ownership in that part of the land plot which is occupied by the building (installation) and is necessary for its use.
Article 268. Right of Limited Use of Another's Land Plot (Servitude)
l. The owner of immovable property (land plot, other immovable property) shall have the right to demand from the owner of the neighboring land plot, and, when necessary, also from the owner of another land plot (hereinafter referred to as neighboring plot), the granting of a right of limited use of the neighboring plot (servitude).
A servitude may be established in order to ensure walking and driving through the neighboring land plot, laying and operation of electric power transmission lines, communications lines and pipelines, ensuring of water supply and amelioration, and also other needs of the owner of the immovable property which can not be ensured without establishing a servitude.
2. The encumberment of a land plot by a servitude shall not deprive the owner of the plot of the rights of possession, use, and disposition of this plot.
3. A servitude shall be established by agreement between the person demanding the establishment of the servitude and the owner of the neighboring plot and shall be subject to registration in accordance with the procedure established for registration of the rights to immovable property. In the event of the failure to reach agreement concerning the establishment or the conditions of a servitude, upon the suit of the person demanding the establishment of the servitude, the dispute shall be settled by a court.
4. On the conditions and in accordance with the procedure provided for by Clauses 1 and 3 of this Article a servitude may be established also in the interests and upon the demand of the person to whom the plot was granted by right of inheritable possession for life or right of permanent use.
5. The owner of a plot encumbered by a servitude shall have the right, unless otherwise provided for by the legislation, to demand from the persons, in whose interests the servitude was established, commensurate payment for the use of the plot.
6. Buildings, installations, and other immovable property, the limited use of which is necessary not in connection with the use of the land plot, may be encumbered by a servitude in accordance with the rules provided for by Clauses 1-3 of this Article.
Article 269. Preservation of Servitude in Event of Transfer of Rights to Land Plot
A servitude shall be preserved in the event of the transfer of the rights to a land plot, which is encumbered by this servitude, to another person.
A servitude may not be an autonomous subject of purchase-sale or pledge and may not be transferred by any means whatever to persons who are not the owners of the immovable property, to ensure the use of which the servitude was established.
Article 270. Termination of Servitude
Upon the demand of the owner of a land plot encumbered by a servitude, the servitude may be terminated in view of the grounds for which the servitude was established having disappeared.
In instances when a land plot, belonging to a citizen or legal person, can not be used in accordance with its intended purpose as a result of being encumbered with a servitude, the owner shall have the right to demand in court the termination of the servitude.
Article 271. Withdrawal of Land Plot From Owner (Possessor, User)
A land plot may be withdrawn from the owner (possessor, user) in instances and in accordance with the procedure provided for by land legislation.
CHAPTER 18
Right of Ownership and Other Rights in rem in Dwelling Premises
Article 272. Ownership in Dwelling House and Apartment
1. The owner shall exercise the rights of possession, use, and disposition of a dwelling premise belonging to him in accordance with its intended purpose.
2. Dwelling premises are intended for the residence of citizens.
A citizen, being the owner of a dwelling premise, may use it for personal residence and the residence of members of his family.
Dwelling premises may be leased by their owners for residence on the basis of a contract.
3. The placing of industrial entities in dwelling houses shall not be permitted.
The placing of the organizations and their divisions by the owner in a dwelling premise, belonging to him, shall be permitted only after the transfer of such premise to non-residential. The transfer of premises from dwelling to non-residential shall be effectuated in accordance with the procedure determined by housing legislation unless otherwise provided by legislative acts.
Article 273. Apartment as Object of Right of Ownership
A share in the right of ownership to the common property of a house (Article 274) also shall belong to the owner of an apartment in an apartment house together with the premises, which belongs to him, occupied by the apartment.
Article 274. Common Property of Owners of Apartments in Apartment House
1. The common premises of the house, constructions of the house, mechanical, electrical, plumbing, and other equipment outside or inside the apartment, servicing more than one apartment, shall belong by right of common share ownership to the owners of the apartments in the apartment house.
2. The owner of an apartment shall not have the right to alienate his share in the right of ownership to common property of a dwelling house, nor to perform other actions which entail the transfer of this share separately from the right of ownership to the apartment.
3. The owners of apartments shall have the right, in order to ensure the operation of the apartment house and the use of the apartments and the common property thereof, to form partnerships of the owners. The partnership of owners shall be a noncommercial organization, formed exclusively for the purposes provided for by this Clause and operating in accordance with the legislation on such partnerships.
Article 275. Rights of Members of Family of Owner of Dwelling Premise
l. The members of the family of the owner residing in a dwelling premise belonging to him shall have the right to use this premise on the conditions provided for by housing legislation.
2. The transfer of the right of ownership to a dwelling house or apartment to another person shall not be a ground for termination of the right of use of the dwelling premise by members of the family of the former owner, unless otherwise established by the legislation.
3. The members of the family of the owner of the dwelling premise may demand the elimination of the violations of their rights to a dwelling premise from any persons, including the owner of the premise.
4. The alienation of the dwelling premise in which the minors reside, who are the members of the family of the owner, shall be permitted only with the consent of the body of trusteeship and guardianship.
CHAPTER 19
Right of Economic Management, Right of Operative Administration
Article 276. Right of Economic Management
1. A unitary enterprise or state association, to which property belongs by right of economic management, shall possess, use, and dispose of this property within the limits determined in accordance with the legislation.
2. The owner of property in economic management shall, in accordance with the legislation, decide questions of the creation of the unitary enterprise and determination of the subject and purposes of its activity, its reorganization and liquidation, appoint the head of the enterprise, and shall effectuate control over its use in accordance with the intended purpose and control over preservation of property belonging to the enterprise.
The owner shall have the right to receive part of the profit from the use of the property, which is in the economic management of the enterprise created by this owner. The owner of property in economic management of the state association efffectuate control over its use in accordance with the intended purpose and control over preservation of property and also has the right to receive a part of income from the use thereof.
3. The unitary enterprise, state association shall not have the right to sell immovable property belonging to them on right of economic management, lease it out, pledge it, contribute it as a contribution to the charter capital of economic companies and partnerships or by other means dispose of this property without the consent of the owner.
The enterprise, state association shall autonomously dispose of the remaining property belonging to them, except for the instances established by the legislation and by the owner of property.
Article 277. Right of Operative Administration
1. A fisc enterprise, an institution or state association on which the property is settled on the right of operative administration shall effectuate with respect to property, settled on them, the rights of possession, use, and disposition thereof, within the limits, established by the legislation, and in accordance with the purposes of its activity, orders of the owner, and the intended purpose of the property.
2. The owner of the property settled on a fisc enterprise, institution or state association on the right of operative administration shall have the right to withdraw superfluous or unused property or property used not in accordance with its intended purpose, and to dispose of it according to own discretion.
3. The property of a Republic's state-social association vested on its organizational divisions in the form of legal persons belongs to them on the right of operative administration unless otherwise is stipulated by the charter of the Republic's state-social association.
The organizational divisions of a Republic's state-social association in the form of a legal person are covered by the rules stipulated by this Article, Articles 279, 280, 281(2) of this Code.
Article 278. Disposition of Property of Fisc Enterprise and State Association on Which the Property Settled on the Right of Operative Administration
1. A fisc enterprise shall have the right to alienate or by other means to dispose of property settled on it only with the consent of the owner of this property.
A fisc enterprise shall autonomously realize the product produced by it unless otherwise established by the legislation.
2. The procedure for the distribution of revenues of the fisc enterprise shall be determined by the owner of its property.
3. The rules provided by clauses 1 and 2 of this Article are to be applied to a state association on which the property is setlled on the right of operative administration unless otherwise specified by acts of the President of the Republic of Belarus.
Article 279. Disposition of Property of Institution
1. An institution shall not have the right to alienate or by other means to dispose of property consolidated to it or acquired at the expense of means allotted to it under the estimate.
2. If in accordance with the constituent documents the right to effectuate activity which brings revenues has been granted to the institution, the revenues received from such activity and the property acquired at the expense of such revenues shall be at the autonomous disposition of the institution and shall be taken into account on a separate balance sheet.
Article 280. Acquisition and Termination of Right of Economic management and Right of Operative administration
1. The right of economic management or the right of operative administration of property, with respect to which a decision has been adopted by the owner concerning the consolidation of this property to a unitary enterprise, institution or state association, shall arise for this enterprise, institution or state association from the time of the transfer of the property, unless otherwise established by the legislation.
2. The yield, products, and revenues from the use of the property in economic management or operative administration, and also the property acquired by a unitary enterprise, institution or state association under contract or other grounds, shall come in the economic management or the operative administration of the enterprise, institution or state association in accordance with the procedure established by the legislation for acquisition of the right of ownership.
3. The right of economic management and the right of operative administration of property shall terminate upon the grounds and in accordance with the procedure provided for by legislative acts for the termination of the right of ownership, and also in instances of the lawful withdrawal of the property from the enterprise, institution or state association by decision of the owner.
Article 281. Retention of Rights to Property in Event of Transfer of Enterprise or Property of Institution to Another Owner
1. In the event of the transfer of the right of ownership in a state or communal enterprise as a property complex to another owner of state or communal property, this enterprise shall retain the right of economic management in the property belonging to it. :
2. In the event of the transfer of the right of ownership in the property of an institution to another person, this institution shall retain the right of operative administration to the property belonging to it.
CHAPTER 20
Defense of Right of Ownership and Other Rights in Rem
Article 282. Demanding and Obtaining Property from Another's Illegal Possession
The owner shall have the right to demand and obtain his property from another's illegal possession.
Article 283. Demanding and Obtaining Property from a Good-Faith Acquirer
1. If property has been acquired for compensation from a person who did not have the right to alienate it, of which the acquirer did not know and could not have known (good-faith acquirer), then the owner shall have the right to demand and obtain this property from the acquirer when the property has been lost by the owner or person to whom the property was transferred by the owner in possession, or stolen from one or the other, or left the possession thereof by means other than the will thereof.
2. If property was acquired without compensation from a person who did not have the right to alienate it, the owner shall have the right to demand and obtain the property in all instances.
3. Money, and also bearer securities, may not be demanded and obtained from a good-faith acquirer.
Article 284. Settlement of Accounts in Event of Return of Property from Illegal Possession
When demanding and obtaining property from another's illegal possession, the owner also shall have the right to demand and obtain from a person, who knew or should have known that his possession is illegal (possessor not in good faith), the return or compensation of all revenues which this person derived or should have been derived throughout the entire period of possession, and from a good-faith possessor, the return or compensation of all revenues which he derived or should have derived from the time when he knew or should have known about the unlawfulness of the possession or received a writ relating to the suit of the owner for the return of the property.
A possessor (both good-faith possessor and possessor not in good faith), in turn, shall have the right to demand from the owner compensation for necessary expenditures, made by him on the property, for that time from which revenues from the property are due to the owner.
A possessor in good faith shall have the right to retain for himself the improvements made by him, if they can be separated without damaging the property. If such a separation of the improvements is impossible, a good-faith possessor shall have the right to demand compensation for expenditures made for the improvement, but not more than the amount of the increase of the value of the property.
Article 285. Defense of Rights of Owner Against Violations Not Connected with Deprivation of Possession
The owner may demand the elimination of any violations of his right, even though these violations are not combined with deprivation of possession.
Article 286. Defense of Rights of Possessor Who is Not the Owner
The rights provided for by Articles 282-285 of this Code shall belong also to a person who, although not the owner, is the possessor of the property by right of inheritable possession for life, economic management or operative administration or on another grounds provided for by the legislation or contract. This person shall have the right to the defense of his possession against the owner as well.
Article 287. Consequences of Termination of Right of Ownership by Virtue of Act of Legislation
In the event of the adoption of the act of legislation, terminating the right of ownership, the losses caused to the owner as a result of the adoption of this act, including the value of the property, shall be compensated by the state. Disputes concerning compensation of losses shall be settled by a court.
SECTION III. GENERAL PART OF THE LEGISLATION OF OBLIGATIONS
SUBSECTION 1. GENERAL PROVISIONS ON OBLIGATIONS
CHAPTER 21
Concept of and Parties to Obligation
Article 288. Concept of Obligation and Grounds of its Origin
1. By virtue of an obligation one person (the debtor) shall be obliged to perform to the benefit of another person (the creditor) a determined action, that is, to transfer property, fulfill work, pay money, and the like or to refrain from a determined action, and the creditor shall have the right to demand from the debtor the performance of his duty.
2. Obligations shall arise from a contract, as a consequence of causing of harm, unfounded enrichment, and from other grounds specified in this Code and other acts of legislation.
Article 289. Parties to Obligation
1. One or simultaneously several persons may participate in an obligation as each of its parties, creditor or debtor.
The invalidity of the demands of the creditor with respect to one of the persons participating in the obligation as a debtor, and likewise the expiry of the limitation period with regard to the demand against such person, shall not in itself affect the creditor’s demands against the other such persons.
2. If each of the parties to a contract bears a duty to the benefit of the other party, it shall be considered to be the debtor of the other party in that which the former is obliged to do to the benefit of the latter, and simultaneously the creditor thereof in that which the former has the right to demand from the latter.
3. The obligation shall not create duties for the persons, not participating in it as the parties (for the third persons).
In the instances provided for by the legislation or by agreement of the parties, an obligation may create rights for third persons with respect to one or both parties to the obligation.
CHAPTER 22
Performance of Obligations
Article 290. General Provisions
Obligations must be performed duly in accordance with the conditions of the obligation and the requirements of the legislation, and in the absence of such conditions and requirements, in accordance with the requirements usually presented.
Article 291. Inadmissibility of Unilateral Refusal to Perform Obligation
A unilateral refusal to perform an obligation and a unilateral change of its conditions shall not be permitted unless it follows otherwise from a legislation or from the obligation.
Article 292. Performance of Obligation in Parts
A creditor shall have the right not to accept the performance of an obligation in parts unless otherwise provided by the legislation, or by the conditions of the obligation and does not arise from the essence of the obligation.
Article 293. Performance of Obligation to Proper Person
Unless otherwise provided by agreement of the parties and does not arise from the essence of the obligation, the debtor shall have the right, when performing the obligation, to demand evidence that performance is accepted by the creditor himself or by a person authorized by the creditor, and shall bear the risk of the consequences of the failure to submit such demand.
Article 294. Performance of Obligation by Third Person
1. Unless the duty of the debtor to perform an obligation personally arises from the legislation, the conditions of the obligation, or the essence thereof, the performance of the obligation may be placed by the debtor on a third person. In this event the creditor shall be obliged to accept the performance offered by a third person for the debtor.
2. A third person, who is subject to the danger of losing his right to the property of the debtor (right of lease, pledge, or others) as a consequence of execution being levied by the creditor on this property, may at his own expense satisfy the demand of the creditor without the consent of the debtor. In such a case the rights of the creditor regarding the obligation shall pass to the third person in accordance with Articles 353-358 of this Code.
Article 295. Period for Performance of Obligation
1. If an obligation provides for or enables to determine the date of its performance or the period of time during which it must be performed, the obligation shall be subject to performance on that day or, respectively, at any time within the limits of that period.
2. When an obligation does not provide for a period for its performance and does not contain conditions enabling to determine this period, it must be performed within a reasonable period after the origin of the obligation.
An obligation not performed within a reasonable period, and likewise an obligation, the period of performance of which has been determined by the time of demand, the debtor shall be obliged to perform within a seven-day period from the day of receipt of the written demand of the creditor concerning the performance thereof, unless the duty to perform within another period arises from the act of legislation, the conditions of the obligation or the essence of the obligation.
Article 296. Performance of Obligation Before Time
The debtor shall have the right to perform an obligation before time unless otherwise provided by the legislation, or the conditions of the obligation, or does not arise from the essence thereof. However, the performance of an obligation before time connected with the effectuation of entrepreneurial activity by the parties thereof shall be permitted only in instances when the possibility to perform an obligation before time is provided for by the legislation, or by the conditions of the obligation, or arises from the essence of the obligation.
Article 297. Place of Performance of Obligation
If the place of performance has not been determined by the legislation, or by contract and is not obvious from the essence of the obligation, performance must be made:
1) with regard to an obligation to transfer a land plot, building, installation, or other immovable property: at the location of the property;
2) with regard to an obligation to transfer a good or other property providing for the carriage thereof: at the place of handing over the property to the first carrier for delivery to the creditor;
3) with regard to other obligations of the debtor to transfer a good or other property: at the place of manufacture or storage of the property, if this place was known to the creditor at the time of origin of the obligation;
4) with regard to a monetary obligation: at the place of residence of the creditor at the time of origin of the obligation, and, if the creditor is a legal person, at its location at the time of origin of the obligation. If the creditor at the time of performance of the obligation has changed place of residence or location and notified the debtor thereof: at the new place of residence or location of the creditor, with charging the expenses, connected with the change of place of performance, to the account of the creditor;
5) with regard to all other obligations: at the place of residence of the debtor, and, if the debtor is a legal person, at its location.
Article 298. Currency of Monetary Obligations
1. Monetary obligations must be expressed in Belarusian Rubles (Article 141).
It may be provided in a monetary obligation that it shall be subject to payment in Belarusian Rubles in an amount equivalent to a determined amount in foreign currency or in conventional monetary units (ECU, Special Drawing Rights, and others). In this event the amount subject to payment in Rubles shall be determined according to the official exchange rate of the respective currency or conventional monetary units on the day of payment, unless other exchange rate or another date for determining it has been established by the legislation or by agreement of the parties.
2. The use of foreign currency and of payment documents in foreign currency shall be permitted when carrying out the settlement of accounts on the territory of the Republic of Belarus with regard to obligations in the instances, in accordance with the procedure and on the conditions determined by the legislation.
Article 299. Increase of Amounts Payable for Maintenance of Citizen
An amount payable with regard to a monetary obligation directly for the maintenance of a citizen in compensation of harm caused to life or health, under a contract of maintenance for life, and in other instances, shall be increased in proportion with an increase of the basic value established by the legislation.
Article 300. Priority of Payment of Demands Relating to Monetary Obligation
The amount of payment made, which is insufficient for the performance of a monetary obligation in full, shall be used, unless otherwise provided by the President of the Republic of Belarus, for payment of:
first, the expenses of the creditor with regard to the receipt of performance;
second, the principal amount of the debt and interests for using the monetary means, which are subject to payment upon the monetary obligation (the loan, credit, advance etc.);
third, the interests, provided by Article 366 of this Code for non-performance or delayed performance of the monetary obligation, and the penalty.
Article 301. Performance of Alternative Obligation
The right of choice, unless it arises otherwise from the legislation or the conditions of the obligation, shall belong to the debtor who is obliged to transfer to the creditor one or another property or to perform for the creditor one of two or several actions.
Article 302. Performance of Obligation in Which Several Creditors or Several Debtors Participate
If several creditors or several debtors participate in an obligation, each of the creditors shall have the right to demand performance, and each of the debtors shall be obliged to perform the obligation in equal share with the others insofar as it does not arise otherwise from the legislation or the conditions of the obligation.
Article 303. Joint and Several Obligations
A joint and several duty (liability) or a joint and several demand shall arise if the joint-and-several nature of the duty or demand has been provided for by a contract or established by the legislation, in particular, when the subject of the obligation is indivisible.
The duties of several debtors relating to an obligation connected with entrepreneurial activity, and likewise the demands of several creditors in such obligation, shall be joint and several unless otherwise provided by the legislation or by the conditions of the obligation.
Article 304. Rights of Creditor in Event of Joint and Several Duty
1. In the event of joint and several duty of debtors, the creditor shall have the right to demand performance both from all of the debtors jointly or from any of them individually, either for the whole debt or for part of the debt.
2. A creditor who has not received full satisfaction from one of the joint and several debtors shall have the right to demand that which has not been received from the other joint and several debtors.
Joint and several debtors shall remain obliged as long as the obligation is not performed in full.
Article 305. Objections Against Demands of Creditor in Event of Joint and Several Duty
In the event of the joint and several duty a debtor shall not have the right to raise objections against the demand of a creditor based on those relations of other debtors with the creditor in which the said debtor does not participate.
Article 306. Performance of Joint and Several Duty by One of Debtors
The performance of a joint and several duty in full by one of the debtors shall relieve the other debtors from performance to the creditor.
Unless it arises otherwise from relations between the joint and several debtors:
1) the debtor who has performed the joint and several duty shall have the right of a regressive demand against the other debtors in equal shares, with the deduction of the share falling on this debtor himself;
2) that unpaid by one of the joint and several debtors to the debtor who has performed the joint and several duty shall fall in equal shares on this debtor and on the remaining debtors.
The rules of this Article shall apply respectively when terminating the joint and several obligation by setting-off the counter-demand of one of the debtors.
Article 307. Joint and Several Demands
In the event of the joint and several nature of a demand, any of the joint and several creditors shall have the right to submit the demand to the debtor in full.
Until the demand is submitted by one of the joint and several creditors, the debtor shall have the right to perform the obligation to any of them at his discretion.
The debtor shall not have the right to raise objections against the demand of one of the joint and several creditors, based on those relations of the debtor with another joint and several creditor in which the particular creditor did not participate.
The performance of the obligation in full to one of the joint and several creditors shall relieve the debtor from performance to the other creditors.
A joint and several creditor who has received performance from the debtor shall be obliged to compensate that which is due to the other creditors in the equal shares, unless it arises otherwise from the relations between the creditors.
Article 308. Performance of Obligation by Placing Debt on Deposit
1. A debtor shall have the right to place money or securities, due from him, on the deposit of a notary, a diplomatic agent of the diplomatic representation of the Republic of Belarus or a consular official of the consular office of the Republic of Belarus, and in the instances established by the legislation, on the deposit of a court, if the obligation can not be performed by the debtor as a consequence of:
1) the absence of the creditor or person authorized by him to accept performance at the place where the obligation must be performed;
2) the lack of active legal capacity of the creditor and absence of his representative;
3) the evident lack of certainty as to who is the creditor with regard to the obligation, in particular, in connection with a dispute in this regard between the creditor and other persons;
4) evading by the creditor of accepting performance or other delay on the part of the creditor.
2. The placing of a monetary amount or securities on deposit of a notary, a diplomatic agent of the diplomatic representation of the Republic of Belarus, a consular official of the consular office of the Republic of Belarus or of a court shall be considered to be performance of the obligation.
The notary, a diplomatic agent of the diplomatic representation of the Republic of Belarus, a consular official of the consular office of the Republic of Belarus, or the court to the deposit of which the money or securities have been placed, shall notify the creditor thereof.
Article 309. Counter Performance of Obligations
The performance of an obligation by one of the parties which in accordance with a contract is conditioned by the performance by the other party of its obligations shall be deemed to be counter performance.
In the event of the failure of an obliged party to provide the performance of an obligation stipulated by the contract or of the existence of circumstances obviously testifying that such performance will not be made within the established period, the party on whom counter performance lies shall have the right to suspend the performance of its obligation or to waive the performance of this obligation and demand compensation of losses.
If the performance of an obligation stipulated by a contract was not made in full, the party on whom the counter performance lies shall have the right to suspend the performance of his obligation or to waive performance in that part corresponding to the performance not provided.
If counter performance of an obligation has been made regardless of the failure of the other party to provide performance of its obligation stipulated by the contract, this party shall be obliged to provide such performance.
The rules provided for by Clauses 2 and 3 of this Article shall apply unless otherwise provided by the contract or by the legislation.
CHAPTER 23
Securing Performance of Obligations
§ 1. General Provisions
Article 310. Means of Securing the Performance of Obligations
The performance of obligations may be secured by a penalty, pledge, retention of property from the debtor, suretyship, bank guarantee, deposit, and other means provided for by the legislation or by a contract.
The invalidity of an agreement to secure the performance of an obligation shall not entail the invalidity of this obligation (principal obligation).
The invalidity of the principal obligation shall entail the invalidity of the obligation securing it unless otherwise established by the legislation.
§ 2. Penalty
Article 311. Concept of Penalty
1. A penalty (fine, forfeit) shall be deemed to be a monetary amount determined by the legislation or by the contract, which the debtor shall be obliged to pay to the creditor in the event of the failure to perform or the improper performance of an obligation, in particular in the event of the delay of performance. With regard to a demand concerning payment of a penalty the creditor shall not be obliged to prove causing of losses to him.
2. A creditor shall not have the right to demand payment of a penalty unless the debtor bears liability for the failure to perform or the improper performance of the obligation.
Article 312. Form of Agreement on Penalty
An agreement concerning a penalty must be concluded in written form irrespective of the form of the principal obligation.
The failure to comply with the written form shall entail the invalidity of the agreement concerning the penalty.
Article 313. Legal Penalty
1. The creditor shall have the right to demand the payment of a penalty specified by the legislation (legal penalty) irrespective of whether the duty to pay it has been provided for by agreement of the parties.
2. The amount of a legal penalty may be increased by agreement of the parties, if the legislation does not prohibit so.
Article 314. Reduction of Penalty
If a penalty subject to payment is obviously incommensurate to the consequences of the violation of the obligation, a court shall have the right to reduce the penalty.
The rules of this Article shall not affect the rights of the debtor to the reduction of the amount of his liability on the grounds of Article 375 of this Code and the rights of the creditor to compensation of losses in the instances provided for by Article 365 of this Code.
§ 3. Pledge
Article 315. Concept and Grounds for Arising of Pledge
1. By virtue of a pledge the creditor with regard to an obligation secured by a pledge (pledgeholder) shall have the right, in the event of the failure of the debtor to perform this obligation, to receive satisfaction from the value of the pledged property preferentially before other creditors of the person (pledgor) to whom this property belongs, with the exception of cases provided for by the legislation.
2. A pledge of land plots, enterprises, buildings, installations, apartments, and other immovable property (mortgage) shall be regulated by the legislation on mortgage. The general rules on pledge contained in this Code shall apply to mortgage in the instances when other rules have not been established by the legislative acts on mortgage.
3. A pledge shall arise by virtue of a contract. Pledge also shall arise on the ground of the act of legislation when the circumstances specified therein ensue, if it is provided in the legislation, which property and for securing the performance of which obligation there is deemed to be a pledge.
The rules of this Code on pledge arising by virtue of contract shall respectively apply to a pledge arising on the ground of the act of legislation unless otherwise established by the legislation.
Article 316. Pledgor
1. Either the debtor himself or a third person may be a pledgor.
2. The pledgor of a thing may be the owner thereof or a person having the right of economic management over it. The person to whom a thing belongs by right of economic management shall have the right to pledge it without the consent of the owner only in the instances provided for by Article 276(3) of this Code.
3. The pledgor of a right may be the person to whom the pledged right belongs
The pledge of the right of lease or other right to another's thing shall not be permitted without the consent of its owner or the person having the right of economic management over it, if the alienation of this right without the consent of the said persons has been prohibited by the legislation or by the contract.
Article 317. Subject of Pledge
l. Any property, including things and property rights (demands), may be the subject of a pledge except for property withdrawn from turnover, demands inseparably connected with the person of the creditor, in particular, demands concerning alimony, compensation for harm caused to life or health, and other rights, assignment of which to another person has been prohibited by the legislation.
2. The pledge of individual types of property, in particular the property of citizens against which levy of execution is not permitted, may be prohibited or limited by the legislation.
Article 318. Demand Secured by Pledge
Unless otherwise provided by a contract, a pledge shall secure a demand in that amount which it has at the time of satisfaction, in particular, interest, penalty, compensation of losses caused by delay of performance, and also compensation of necessary expenses of the pledgeholder for maintenance of the pledged thing and expenses relating to recovery.
Article 319. Pledge With and Without Transfer of Pledged Property to Pledgeholder
1. Pledged property shall remain in the disposal of the pledgor unless otherwise provided by the contract.
Property on which a mortgage is established, and also pledged goods in turnover, shall not be transferred to the pledgeholder.
2. The subject of a pledge may be left in the disposal of the pledgor under lock and seal of the pledgeholder.
The subject of a pledge may be left in the disposal of the pledgor with the imposition of marks testifying the pledge (firm pledge).
3. The subject of a pledge, transferred by the pledgor for a time in possession and use to the third person, shall be considered to be left in the disposal of the pledgor.
4. In the event of the pledge of a property right certified by a security, it shall be transferred to the pledgeholder or to the deposit of a notary, unless otherwise provided by the contract.
Article 320. Contract on Pledge, Its Form and Registration
1. In the contract on pledge, the subject of pledge and its valuation, the essence, amount, and period for performance of the obligation, secured by the pledge, must be specified. The contract must also contain an indication of the party, in the disposal of which the pledged property is situated.
2. A contract on pledge must be concluded in written form.
A contract on the pledge of property or rights to property to secure obligations under a contract, which must be notarially certified, shall be subject to notarial certification.
3. A contract on mortgage must be registered in accordance with the procedure established for the registration of transactions with the respective property. A contract on mortgage, providing for the pledge of the immovable property, which shall be transferred to the pledgor in the future and which, at the time of conclusion of the contract, does not considered to be created in accordance with the legislation, shall not be subject to the state registration and shall be considered to be concluded since the time of its drawing-up in written form.
4. The failure to comply with the rules contained in Clauses 2 and 3 of this Article shall entail the invalidity of the contract on pledge.
Article 321. Property to Which Right of Pledgeholder Extends
1. The right of the pledgeholder (right of pledge) to a thing which is the subject of pledge shall extend to its appurtenances unless otherwise provided by contract.
The right of pledge shall extend to yield, products, and revenues received as a result of the use of the pledged property in the instances provided for by contract.
2. In the event of the mortgage of an enterprise or other property complex as a whole the right of pledge shall extend to all of its property, movable and immovable, including the rights of demand and exclusive rights, including those acquired during the period of the mortgage, unless otherwise provided by the legislative acts or contract.
3. The mortgage of a building or installation shall be permitted only with the simultaneous mortgage, under the same contract, of the land plot on which this building or installation is located, or the part of this plot functionally ensuring the pledged object, or the right of lease, which belongs to the pledgor, of this plot or corresponding part thereof.
4. In the event of the mortgage of a land plot, the right of pledge shall not extend to buildings and installations, located or being under construction on this plot, unless otherwise provided by the condition of the contract.
If there is no such condition in the contract, the pledgor shall, in the event of levying the execution on the pledged land plot, retain the right of limited use (servitude) of that part thereof which is necessary for the use of the building or installation in accordance with its intended purpose. Conditions for the use of this part of the plot shall be determined by agreement of the pledgor with the pledgeholder, and, in the event of a dispute, by a court.
5. If a mortgage has been established on a land plot, on which a building or installation is located, which belongs not to the pledgor, but to another person, then when the pledgeholder levies execution on this plot and in the event of its sale at a public sale, the rights and duties which the pledgor had with respect to this person, shall pass to the acquirer of the plot.
6. The pledge of things and property rights, which the pledgor will acquire in the future, may be provided for by the contract on pledge, and, with respect to a pledge arising on the ground of the act of legislation, by the legislation.
Article 322. Origin of Right of Pledge
1. The right of pledge shall arise from the time of conclusion of the contract on pledge, and with respect to the pledge of property which is subject to transfer to the pledgeholder, from the time of transfer of this property, unless otherwise provided by the contract on pledge, or, in cases when registration of the contract is required, from the time of registration of the contract.
2. The right of pledge to goods in turnover shall arise in accordance with the rules of Article 338(2) of this Code.
Article 323. Subsequent Pledge
1. If property under pledge becomes the subject of yet another pledge to secure other demands (subsequent pledge), the demands of the subsequent pledgeholder shall be satisfied from the value of this property after satisfaction of the demands of preceding pledgeholders.
2. A subsequent pledge shall be permitted if it is not prohibited by the preceding contracts on pledge.
3. The pledgor shall be obliged to inform each subsequent pledgeholder about all of the existing pledges of the particular property provided for by Article 320(1) of this Code and shall be liable for losses caused to pledgeholders by the failure to fulfill this duty.
Article 324. Maintenance and Preservation of Pledged Property
l. The pledgor or pledgeholder, depending upon in which disposal is the pledged property (Article 338), shall be obliged, unless otherwise provided by legislation or contract, to:
1) insure pledged property at its full value at the expense of the pledgor against risks of loss and damage, or, if the full value of the property exceeds the amount of the demand secured by the pledge, for an amount not lower than the amount of the demand;
2) take measures necessary in order to ensure the preservation of the pledged property, including those for defense of property against infringements and demands on the part of third persons;
3) inform immediately the other party concerning the arising of the threat of loss or damage to the pledged property.
The pledgeholder and the pledgor shall have the right to verify, by documents and actually, the existence, quantity, state, and conditions of storage the pledged property, which is in disposal of the other party.
In the event of gross violation by the pledgeholder of the duties specified in Clause 1 of this Article, creating a threat of loss or damage of the pledged property, the pledgor shall have the right to demand the termination of the pledge before time.
Article 325. Consequences of Loss of or Damage to Pledged Property
1. The pledgor shall bear the risk of accidental perishing or accidental damage to pledged property unless otherwise provided by the contract on pledge.
2. The pledgeholder shall be liable for the full or partial loss of or damage to the subject of pledge transferred to him unless he would prove that he may be relieved of liability in accordance with Article 372 of this Code.
The pledgeholder shall be liable for the loss of the subject of pledge in the amount of its real value, taking into account the inflation, and for the damaging thereof, in the amount by which the value was reduced irrespective of the amount at which the subject of pledge was valued when transferring it to the pledgeholder.
If as a result of damage to the subject of pledge it has so changed that it can not be used for its intended purpose, the pledgor shall have the right to reject it and to demand compensation for the loss thereof.
The duty of the pledgeholder to compensate the pledgor for other losses caused by the loss of or damage to the subject of pledge may be provided for by a contract.
The pledgor who is a debtor with regard to the obligation secured by a pledge shall have the right to set off the demand against the pledgeholder concerning compensation of losses caused by the loss of or damage to the subject of pledge in repaying the obligation secured by the pledge.
Article 326. Substitution and Restoration of Subject of Pledge
l. The replacement of the subject of pledge shall be permitted with the consent of the pledgeholder unless otherwise provided by legislation or by contract.
2. If the subject of pledge is lost or damaged or the right of ownership therein or the right of economic management has been terminated on the grounds established by the legislation, the pledgor shall have the right within a reasonable period to restore the subject of pledge or substitute other property of equal value unless otherwise provided by the contract.
Article 327. Use and Disposition of Subject of Pledge
1. The pledgor shall have the right, unless otherwise provided by contract and unless follows otherwise from the essence of the pledge, to use the subject of pledge in accordance with its intended purpose, including to derive yield and incomes from it.
2. Unless otherwise provided by the legislation or contract and unless follows otherwise from the essence of the pledge, the pledgor shall have the right to alienate the subject of pledge, to transfer it on lease or for use without compensation to another person, or otherwise to dispose of it only with the consent of the pledgeholder.
An agreement limiting the right of the pledgor to bequeath pledged property shall be void.
3. The pledgeholder shall have the right to use the subject of pledge transferred lo him only in the instances provided for by contract, regularly submitting a report on use to the pledgor. The duty may be placed under a contract on the pledgeholder to derive yield and incomes from the subject of pledge for the purposes of repaying the principal obligation or in the interests of the pledgor.
Article 328. Defense by Pledgeholder of His Rights to Subject of Pledge
l. The pledgeholder, in whose disposal the pledged property is or should be, shall have the right to demand and obtain it from another's illegal possession, including from the possession of the pledgor (Articles 282, 283 and 286).
2. In instances when, in accordance with the conditions of the contract, the right to use a subject of pledge, transferred to the pledgeholder, has been granted to him, he may demand from other persons, including from the pledgor, the elimination of any violations of his right, even though these violations were not connected with deprivation of possession (Articles 285, 286).
Article 329. Grounds for Levying Execution on Pledged Property
1. Execution may be levied on pledged property in order to satisfy the demands of the pledgeholder (creditor) in the event of the failure to perform or the improper performance by the debtor of an obligation, secured by the pledge, for the reasons for which the debtor is liable.
2. Levying execution on pledged property may be refused, if the violation of the obligation, secured by the pledge, which was committed by the debtor, is extremely insignificant, and the amount of the demands of the pledgeholder as a consequence thereof is clearly incommensurate with the value of the pledged property.
Article 330. Procedure for Levying Execution on Pledged Property
1. The demands of the pledgeholder (creditor) shall be satisfied from the value of pledged immovable property by decision of a court.
The satisfaction of the demand of a pledgeholder at the expense of the pledged immovable property without recourse to a court shall be permitted on the basis of notarially certified agreement of the pledgeholder with the pledgor concluded after the grounds arise to levy execution on the subject of pledge. Such an agreement may be deemed by a court to be invalid upon the suit of the person whose rights were violated by such agreement.
2. The demands of the pledgeholder at the expense of pledged movable property shall be satisfied by decision of a court unless otherwise provided by agreement of the pledgor with the pledgeholder. However, execution may be levied on the subject of a pledge, transferred to the pledgeholder, in accordance with the procedure established by the contract on pledge, unless a different procedure has been established by the legislation.
3. Execution may be levied on the subject of pledge only by decision of a court in instances when:
1) in order to conclude a contract on pledge, the consent or authorization of another person or body was required;
2) property having significant historical, artistic, or other cultural value for society is the subject of pledge;
3) the pledgor is absent and it is impossible to establish his whereabouts;
4) the subject of pledge is property with limited turnability.
4. The satisfaction of demands of the pledgeholder (creditor) on the repayment of a bank credit at the expense of the pledged property is performed, without recourse to a court and holding a public competition, on the basis of notarially certified contract of the pledgeholder with the pledgor concluded after the grounds established by the legislation for the levy of execution upon the subject of pledge. At that, the contract may not stipulate the transfer of the ownership of the pledged property to the pledgeholder.
The pledged property recoverable by the decision of a court and related to fixed assets of the pledgeholder may not be subject to the levy of executuon in the order established by part one of this clause.
Article 331. Realization of Pledged Property
1. Realization of the pledged property, on which execution is levied in accordance with Article 330 of this Code, shall be effectuated by means of sale at public sale in accordance with the procedure established by procedural legislation unless a different procedure has been established by this Code and other acts of legislation.
2. At the request of the pledgor the court shall have the right, in decision to levy execution on pledged property, to defer the sale thereof at public sale for period of up to one year.
The deferral shall not affect the rights and duties of the parties with regard to an obligation secured by the pledge of this property and shall not relieve the debtor from compensating the losses of the creditor and the penalty which accrued during the period of deferral.
3. The initial sale price of pledged property at which the public sale begins shall be determined by decision of a court in the instances of levying execution on property in a judicial proceeding or by agreement of the pledgeholder with the pledgor in other instances.
The pledged property shall be sold to the person who offered the highest price at the public sale.
4. When a public sale is declared to be not effectuated, a pledgeholder shall have the right by agreement with the pledgor to acquire the pledged property and to set off against the purchase price his demands secured by the pledge. The rules concerning the contract of purchase-sale shall apply to such an agreement.
In the event a second public sale is declared to be not effectuated, the pledgeholder shall have the right to retain the subject of pledge, valuing it in an amount of not more than 10% less that the initial sale price at the second public sale.
If the pledgeholder does not take advantage of the right to retain the subject of pledge within a month from the date of announcement of the second public sale being not effectuated, the contract on pledge shall terminate.
5. If the amount received when realizing the pledged property is insufficient to cover the demand of the pledgeholder, he shall have the right, in the absence of any other indication in the legislation or in the contract, to receive the amount in arrears from other property of the debtor, not taking advantage of preference based on pledge.
6. If the amount received at realization of the pledged property exceeds the amount of the demand of the pledgeholder secured by the pledge, the difference shall be returned to the pledgor.
7. A debtor and pledgor, being a third person, shall have the right at any time before the sale of the subject of pledge to terminate the levying of execution on it and the realization thereof, by performing the obligation secured by the pledge or that part thereof, the performance of which has been delayed. An agreement limiting this right shall be void.
Article 332. Performance of Obligation Secured by Pledge Before Time and Levying Execution on Pledged Property
1. A pledgeholder shall have the right to demand the performance before time of an obligation, secured by pledge, in the following instances:
1) the subject of pledge departed from the possession of the pledgor, in which disposal it was left, not in accordance with the conditions of the contract on pledge;
2) a violation, by the pledgor, of the rules concerning substitution of the subject of pledge (Article 326);
3) loss of the subject of pledge under circumstances for which the pledgeholder is not liable, if the pledgor has not taken advantage of the right provided for by Article 326(2) of this Code.
2. The pledgeholder shall have the right to demand the performance before time of the obligation secured by pledge and, if this demand is not satisfied, to levy execution on the subject of pledge in the following instances:
1) a violation by the pledgor of rules concerning subsequent pledge (Article 323);
2) the failure of the pledgor to fulfill the duties provided for by Article 324(1), Subclauses (1) and (2), and Article 324(2) of this Code;
3) a violation by the pledgor of the rules concerning the disposition of pledged property (Article 327(2)).
Article 333. Termination of Pledge
1. A pledge shall terminate:
1) with the termination of the obligation secured by the pledge;
2) upon the demand of the pledgor when there are the grounds provided for by Article 324(3) of this Code;
3) in the event of perishing of the pledged thing or termination of the right of pledge, unless the pledgor has taken advantage of the right provided for by Article 326(2) of this Code;
4) in the event of the sale of pledged property at public sale, and also when the realization thereof has proved to be impossible (Article 331(4)).
2. Termination of mortgage shall be registered in accordance with the legislation.
3. In the event of termination of pledge as a consequence of the performance of the obligation secured by the pledge or at the demand of the pledgor (Article 324(3)), the pledgeholder, in whose disposal is the pledged property, shall be obliged immediately to return it to the pledgor.
Article 334. Preservation of Pledge in Event of Transfer of Right to Pledged Property to Another Person
l. In the event of the transfer of the right of ownership to pledged property or the right of economic management from the pledgor to another person as a result of the alienation of this property, with or without compensation, or by way of universal legal succession, the right of pledge shall retain force.
The legal successor of the pledgor shall take the place of the pledgor and shall bear all the duties of the pledgor, unless otherwise established by an agreement with the pledgeholder.
2. If the property of the pledgor, which is the subject of pledge, has passed by way of legal succession to several persons, each of the legal successors (acquirers of the property) shall bear the consequences, arising from the pledge, for the failure to perform the obligation secured by the pledge, commensurate with the part of the said property which has passed to this legal successor (acquirer). However, if the subject of the pledge is indivisible, or it remains in the common joint ownership of the legal successors on other grounds, they shall become joint and several pledgors.
Article 335. Consequences of Compulsory Withdrawal of Pledged Property
1. If the right of ownership of a pledgor to property which is the subject of pledge terminates on the grounds and in accordance with the procedure established by the legislation as a consequence of the withdrawal (purchase) for state needs, requisition or nationalization, and other property or respective compensation is granted to the pledgor, the right of pledge shall extend to the property granted instead or, respectively, the pledgeholder shall acquire the right of preferential satisfaction of his demand from the amount of compensation due to the pledgor. The pledgeholder also shall have the right to demand the performance before time of the obligation secured by the pledge.
2. In the instances when property which is the subject of pledge is withdrawn from the pledgor in accordance with the procedure established by the legislation because the owner of this property is really another person (Article 282), or in the form of a sanction for the commission of a crime or another violation of legislation (Article 244), the pledge with respect to this property shall terminate. In these instances the pledgeholder shall have the right to demand performance before time of the obligation secured by the pledge.
Article 336. Cession of Rights Regarding Contract on Pledge
A pledgeholder shall have the right to transfer his rights under a contract on pledge to another person while complying with the rules on the transfer of the rights of a creditor by means of cession of a demand (Articles 353-361).
The cession by the pledgeholder of his rights under a contract on pledge to another person shall be valid if the rights of demand against the debtor regarding the principal obligation, secured by pledge, have been transferred to the same person.
Unless proved otherwise, the cession of rights under a contract on mortgage shall also mean the cession of rights relating to the obligation secured by the mortgage.
Article 337. Transfer of Debt Regarding Obligation Secured by Pledge
With the transfer of a debt regarding an obligation secured by a pledge to another person, the pledge shall terminate unless the pledgor has given consent to the creditor to be liable for the new debtor.
Article 338. Pledge of Goods in Turnover
l. A pledge of goods while leaving them in the disposal of the pledgor and granting to the pledgor the right to change the composition and natural form of the pledged property (goods inventories, raw material, substances, semi-finished products, finished products, and the like) on condition that their total value shall not become less than that specified in the contract on pledge, shall be deemed to be a pledge of goods in turnover.
A reduction of the value of the pledged goods in turnover shall be permitted commensurately with the performed part of the obligation secured by pledge unless otherwise provided by the contract.
2. Goods in turnover alienated by a pledgor shall cease to be the subject of pledge from the time of their transfer into ownership, economic management, or operative administration of the acquirer, and goods acquired by the pledgor which are specified in the contract on pledge shall become the subject of pledge from the time the right of the pledgor arises to ownership or economic management.
3. The pledgor of goods in turnover shall be obliged to keep a register book of pledges in which entries are made concerning the conditions of the pledge of goods and all operations entailing change of the composition or natural form of the pledged goods, including the processing thereof, on the day of the last operation.
4. In the event of a violation by the pledgor of the conditions of pledge of goods in turnover, the pledgeholder shall have the right, by placing his marks and seals on the pledged goods, to suspend operations with these goods until the violation is eliminated.
Article 339. Pledge of Things in Pawnshop
l. The acceptance from citizens on pledge of movable property intended for personal consumption to secure short-term loans may be effectuated as entrepreneurial activity by specialized organizations, pawnshops.
2. A contract on the pledge of things in a pawnshop shall be formalized by the issuance of a pledge ticket by the pawnshop.
3. The pledged things shall be transferred to the pawnshop.
The pawnshop shall be obliged to insure to the benefit of the pledgor, at the expense of the pawnshop, the things accepted on pledge for the full amount of value of these things, as established in accordance with prices for things of this type and quality commonly established in trade at the time of their acceptance on pledge.
The pawnshop shall not have the right to use and dispose of pledged things.
4. The pawnshop shall bear liability for loss of and damage to pledged things unless it would prove that the loss or damage occurred as a consequence of force majeure.
5. In the event of the failure to return, within the established period, the amount of the loan secured by the pledge of things to the pawnshop, the pawnshop shall have the right on the ground of an executive endorsement of a notary upon the expiry of a grace period, equal to one month, to sell this property in accordance with the procedure established for the realization of pledged property (Article 331(3)(4)(6) and (7)). After this, the demands of the pawnshop against the pledgor (debtor) shall be considered to be paid, even if the amount received when realizing the pledged property is insufficient for the full satisfaction thereof.
6. The rules for granting loans to citizens by pawnshops under pledge of things belonging to citizens shall be established in accordance with the legislation.
7. The conditions of a contract on pledge of things in a pawnshop limiting the rights of the pledgor in comparison with the rights granted to him by the legislation shall be void. In place of such conditions the respective provisions of the legislation shall be applied.
§ 4. Retention
Article 340. Grounds of Retention
1. A creditor, in whose disposal is a thing, which is subject to transfer to a debtor or to a person specified by the debtor, shall have the right in the event of the failure of the debtor to perform the obligation relating to payment for this thing within the specified period or to compensate the creditor for expenses and other losses connected therewith, to retain it for so long as the respective obligation is not performed.
2. The retention of a thing may also secure demands that, although not connected with the payment for the thing or compensation of expenses therefor and other losses, but arose from an obligation, the parties to which act as entrepreneurs.
3. The creditor may retain a thing, being in his disposal, regardless of the fact that after this thing came into the possession of the creditor, the rights thereto have been acquired by a third person.
4. The rules of this Article shall apply unless otherwise provided by a contract.
5. The demands of a creditor who is retaining a thing shall be satisfied from the value thereof in the amount and in accordance with the procedure provided for the satisfaction of demands secured by a pledge.
§ 5. Suretyship
Article 341. Contract of Suretyship
1. Under a contract of suretyship, the surety shall undertake to the creditor of another person to be liable for the performance by the latter of his obligation in full or in part.
2. A contract of suretyship may be concluded also in order to secure an obligation which shall arise in future.
3. The President of the Republic of Belarus and (or) laws may establish a special order for granting and discharging of sureties of local executive and dispositive bodies.
Article 342. Form of Contract of Suretyship
A contract of suretyship must be concluded in written form. The failure to comply with the written form shall entail the invalidity of the contract of suretyship.
Article 343. Liability of Surety
1. In the event of the failure to perform or the improper performance by the debtor of an obligation secured by a suretyship, the surety and the debtor shall be liable to a creditor jointly and severally unless subsidiary liability of the surety has been provided for by the legislation or by the contract of suretyship.
2. The surety shall be liable to the creditor in the same amount as the debtor, including the payment of interest, compensation for court costs relating to recovery of the debt, and other losses of the creditor caused by the failure to perform or the improper performance of the obligation by the debtor unless otherwise provided by the contract of suretyship.
3. Persons who have given a suretyship jointly shall be liable to the creditor jointly and severally unless otherwise provided by the contract of suretyship.
Article 344. Right of Surety to Objections Against Demand of Creditor
1. The surety shall have the right to raise the objections against the demand of the creditor, which the debtor could raise, unless it arises otherwise from the contract of suretyship. The surety shall not lose the right to these objections even if the debtor waived them or has acknowledged his debt.
2. If the suit is submitted against the surety, the latter is obliged to involve the debtor in participation in the case.
3. If the surety has not performed the duty, specified in Clause 2 of this Article, the debtor shall have the right to raise, against the surety’s regressive demand, the objections which he had against the creditor.
Article 345. Rights of Surety Who Has Performed Obligation
l. To a surety who has performed an obligation shall pass the rights of the creditor with regard to this obligation and the rights which belonged to the creditor as pledgeholder in that amount in which the surety satisfied the demand of the creditor. The surety also shall have the right to demand from the debtor the payment of interest on the amount paid to the creditor and compensation for other losses incurred in connection with liability for the debtor.
2. Upon performance by the surety of the obligation the creditor shall be obliged to hand over to the surety the documents certifying the demand against the debtor and to transfer the rights which secure this demand.
3. The rules established by this Article shall be applied unless otherwise provided by the legislation, or by the contract of surety with the debtor and does not arise from the relations between them.
Article 346. Notification of Surety about Performance of Obligation by Debtor
The debtor who has performed an obligation secured by a suretyship shall be obliged immediately to notify the surely thereof. Otherwise the surety who in turn has performed the obligation shall have the right to recover from the creditor that unjustifiably received or to submit a regressive demand against the debtor. In the last instance the debtor shall have the right to recover from the creditor only that unjustifiably received.
Article 367. Termination of Suretyship
1. A suretyship shall terminate with the termination of the obligation secured by it, and also in the event of a change thereof entailing an increase of liability or other unfavorable consequences for the surety without the consent of the latter.
2. A suretyship shall terminate with the transfer to another person of the debt relating to the obligation secured by the suretyship unless the surety has given consent to the creditor to be liable for the new debtor.
3. A suretyship shall terminate if the creditor has refused to accept proper performance offered by the debtor or the surety.
4. A suretyship shall terminate upon the expiry of the period for which it was given, specified in the contract of suretyship. If such period has not been established, it shall terminate, if the creditor within a year from the date of ensuing the term of performance of the obligation, secured by the suretyship, has not brought a suit against the surety. When the period of performance of the principal obligation has not been specified and can not be determined or is determined by the time of demand, the suretyship shall terminate if the creditor has not brought a suit against the surety within two years from the date of concluding the contract of suretyship.
§ 6. Guarantee
Article 348. Concept of Guarantee
1. By virtue of guarantee, the guarantor shall undertake to the creditor of other person (debtor) to be liable for the performance of obligation of this person in full or in part.
2. The guarantee obligation may arise on the grounds of a contract.
3. Only valid demands may be secured by the guarantee.
4. The rules of Article 342, Article 343(2)(3), Articles 344-347 of this Code shall extend to the guarantees, unless otherwise provided by the legislation.
The President of the Republic of Belarus and (or) laws may establish a special order for granting and discharging of garantees of the Government of the Republic of Belarus, garantees of local executive and dispositive bodies, other organizations, including companies with a share of the state in charter capitals.
Article 349. Subsidiary Liability of Guarantor
1. In the event of non-performance of the obligation, the guarantor shall be liable to the creditor as a subsidiary (secondary) debtor.
2. After performance of the obligation, the guarantor shall not acquire the right of the regressive demand to the debtor for return of the amount paid.
Article 350. Specific Features of Bank Guarantee
Specific features of the bank guarantee and of its individual kinds shall be defined by the legislation.
§ 7. Deposit
Article 351. Concept of Deposit. Form of Agreement on Deposit
1. A deposit shall be deemed to be a monetary amount issued by one of the contracting parties on the account of payment due from this party to the other party under a contract, as evidence of the conclusion of the contract and to secure its performance.
2. An agreement on deposit, irrespective of the amount of the deposit, must be concluded in written form.
3. In the event of doubt as to whether the amount is paid on the account of payments due from a party under the contract as a deposit, in particular as a consequence of the failure to comply with the rule established by Clause 2 of this Article, this amount shall be considered to be paid as an advance unless proved otherwise.
Article 352. Consequences of Termination and Failure to Perform Obligation Secured by Deposit
1. In the event of the termination of the obligation before the commencement of the performance thereof by agreement of the parties or as a consequence of the impossibility of performance (Article 386) the deposit must be returned.
2. If the party, which gave the deposit, is liable for the failure to perform the contract, the deposit shall remain with the other party. If the party, which received the deposit, is liable for the failure to perform the contract, it shall be obliged to pay the other party twice the amount of the deposit.
In addition, the party liable for the failure to perform the contract shall be obliged to compensate the other party for losses, setting off the amount of the deposit, unless otherwise provided in the contract.
CHAPTER 24
Change of Persons in Obligation
§ 1. Transfer of Rights of Creditor to Another Person
Article 353. Grounds and Procedure for Transfer of Rights of Creditor to Another Person
1. The right (demand) belonging to creditor on the ground of an obligation may be transferred by him to another person with regard to the transaction (cession of demand) or pass to another person on the ground of the act of legislation.
The rules concerning the transfer of the rights of a creditor to another person shall not apply to regressive demands.
2. The consent of the debtor, unless otherwise provided by the legislation or by the contract, shall not be required for the transfer of the rights of the creditor to another person.
3. If the debtor was not informed in writing about the transfer of the rights of the creditor to another person, the new creditor shall bear the risk of the unfavorable consequences caused by this for him. In this event the performance of the obligation to the initial creditor shall be deemed to be performance to a proper creditor.
Article 354. Rights Which May Not Pass to Other Persons
The transfer to another person of the rights inseparably connected with the person of the creditor, in particular, demands concerning alimony and compensation of harm caused to life or health, shall not be permitted.
Article 355. Amount of Rights of Creditor Passing to Another Person
Unless otherwise provided by the legislation or by contract, the right of the initial creditor shall pass to the new creditor in that amount and on those conditions which existed at the time of transfer of the right. In particular, to the new creditor shall pass the rights securing the performance of the obligation, and also other rights connected with the demand, including the right to unpaid interest.
Article 356. Evidence of Rights of New Creditor
1. The creditor who has assigned a demand to another person shall be obliged to transfer to him the documents certifying the right of demand and to provide information having significance for the effectuation of the demand.
2. The debtor shall have the right not to perform the obligation to a new creditor until the submission to him of evidence of the transfer of the demand to this person.
Article 357. Objections of Debtor Against Demands of New Creditor
The debtor shall have the right to raise objections against the demand of a new creditor, which he had against the initial creditor at the time of receipt of notification concerning the transfer of the rights regarding the obligation to the new creditor.
Article 358. Transfer of Rights of Creditor to Another Person on Ground of Act of Legislation
The rights of a creditor relating to an obligation shall pass to another person on the ground of the act of legislation and ensuing of the circumstances specified therein:
1) as a result of universal legal succession to the rights of the creditor;
2) by decision of a court concerning the transfer of the rights of the creditor to another person when the possibility of such transfer has been provided for by the legislation;
3) as a consequence of the performance of the obligation of the debtor by his surety or by a pledgor who is not the debtor with regard to this obligation;
4) in the event of the subrogation to an insurer of the rights of the creditor against the debtor who is liable for the ensuing of an insured accident;
5) in the other instances provided for by the legislation.
Article 359. Conditions of Cession of Demand
1. The cession of demand by the creditor to another person shall be permitted if this is not contrary to the legislation or the contract.
2. The cession of demand regarding an obligation in which the person of the creditor has material significance for the debtor without the consent of the debtor shall not be permitted.
Article 360. Form of Cession of Demand
1. The cession of demand based on a transaction concluded in simple written or notarial form must be concluded in the respective written form.
2. The cession of demand relating to a transaction requiring state registration must be registered in accordance with the procedure established for registration of such transaction unless otherwise established by the legislation.
3. The cession of demand regarding an order security shall be concluded by means of an endorsement on this security (Article 147(3)).
Article 361. Liability of Creditor Who Has Ceded Demand
The initial creditor who has ceded a demand shall be liable to the new creditor for the invalidity of the demand transferred to him but shall not be liable for the failure to perform this demand by the debtor except when the initial creditor assumed a suretyship for the debtor to the new creditor.
§2. Transfer of Debt
Article 362. Condition and Form of Transfer of Debt
1. The transfer by the debtor of his debt to another person shall be permitted only with the consent of the creditor.
2. The rules contained in Article 360(1) and (2) of this Code shall apply respectively to the form of the transfer of the debt.
Article 363. Objections of New Debtor Against Demands of Creditor
The new debtor shall have the right to raise objections against the demand of the creditor, based on relations between the creditor and the initial debtor.
CHAPTER 25
Liability for Violation of Obligations
Article 364. Duty of Debtor to Compensate Losses
1. A debtor shall be obliged to compensate the creditor for losses caused by the failure to perform or improper performance of an obligation.
2. Losses shall be determined in accordance with the rules provided for by Article 14 of this Code.
3. Unless otherwise provided by the legislation or by contract, when determining losses, the prices shall be taken into account, which exist in that place, where the obligation shall be performed, on the date of voluntary satisfaction by the debtor of the demand of the creditor, or, if the demand was not voluntarily satisfied, on the date of bringing the suit. Taking into consideration the circumstances, a court may satisfy the demand to compensate losses by taking into account the prices existing on the day of adoption of the decision.
4. When determining lost advantage, the measures undertaken by the creditor to receive it and the preparations made for this purpose shall be taken into account.
Article 365. Losses and Penalty
1. If a penalty has been established for the failure to perform or for improper performance of an obligation, the losses shall be compensated in the part not covered by the penalty.
Instances may be provided for by the legislation or by contract: when the recovery of only a penalty is permitted, but not of losses; when losses may be recovered in full above the penalty; when at the choice of the creditor either a penalty or losses may be recovered.
2. When limited liability (Article 371) was established for the failure to perform or improper performance, the losses subject to compensation in the part not covered by the penalty or above or in place of it may be recovered up to the limits established by such limitation.
Article 366. Liability for Failure to Perform Monetary Obligation
1. For the use of another's monetary means as a consequence of unlawful retention, avoidance of the return thereof, other delay in the payment thereof or the unjustified receipt or saving thereof at the expense of another person, interest shall be subject to payment on the amount of these means. The amount of interest shall be determined at the refinance rate of the National Bank of the Republic of Belarus on the day of performance of the monetary obligation or respective part thereof, except for the recovery of a debt in a judicial proceeding, if the court has satisfied the demand of the creditor, using the refinance rate of the National Bank on the date of adoption of the decision.
These rules shall apply unless another amount of interest has been established by the legislation or by the contract.
In the case when a monetary obligation, in accordance with the legislation, is subject to payment in Belarusian Rubles in an amount equivalent to a determined amount in foreign currency or in conventional monetary units the interests is to be calculated on the sum in Belarusian Rubles determined at the official exchange rate of the respective currency or conventional monetary unit on the day of performance of the monetary obligation or of its corresponding part and, in the case of recovery of the debt in the court order, on the day of rendering decision by the court.
2. If the losses caused to a creditor by the unlawful use of his monetary means exceed the amount of interest due to him on the grounds of Clause 1 of this Article, the creditor shall have the right to demand from the debtor compensation of losses or debt, increased taking into account the inflation, in that part exceeding this amount.
3. Interest for the use of another's means shall be recovered for the period up to the day of payment of the amount of these means to the creditor unless a shorter period has been established for calculating interest by the legislation or by the contract.
Article 367. Liability for Failure to Perform Obligation in Kind
1. The payment of a penalty and compensation of losses in the event of the improper performance of an obligation shall not relieve the debtor from performance of the obligation in kind unless otherwise provided by the legislation or by the contract.
2. The compensation of losses in the event of the failure to perform an obligation and the payment of a penalty for the failure to perform shall relieve the debtor from the performance of the obligation in kind unless otherwise provided by the legislation or by the contract.
3. The refusal of a creditor to accept performance which as a consequence of delay has lost interest for him (Article 376(2)), and also the payment of a penalty established as release-money (Article 380), shall relieve the debtor from performance of the obligation in kind.
Article 368. Performance of Obligation at Expense of Debtor
In the event of the failure to perform an obligation by a debtor to manufacture and transfer a thing in ownership, economic management, or operative administration, or to transfer a thing for use to a creditor, or to fulfill specified work or to render a service for the creditor, the creditor shall have the right within a reasonable period to commission the fulfillment of the obligation to the third persons for a reasonable price or to fulfill it by his own efforts unless it follows otherwise from the legislation, the contract, or the essence of the obligation, and to demand from the debtor compensation for necessary expenses and other losses incurred.
Article 369. Consequences of Failure to Perform Obligation to Transfer Individually-Specified Thing
In the event of the failure to perform an obligation to transfer an individually-specified thing in ownership, economic management, operative administration, or use for compensation to a creditor, the latter shall have the right to demand that this thing be taken away from the debtor and the transfer thereof to the creditor on the conditions provided for by the obligation. This right shall disappear if the thing already has been transferred to a third person having the right of ownership, economic management, or operative administration. If the thing has not yet been transferred, those creditors to whose benefit the obligation arose earlier shall have priority, and, if this is impossible to establish, the creditor who has brought suit earlier.
The creditor shall have the right to demand compensation of losses instead of a demand to transfer the thing to him which is the subject of the obligation.
Article 370. Subsidiary Liability
1. Before bringing the demand against the person who in accordance with the legislation, or with the conditions of an obligation bears liability additionally to the liability of another person, who is the principal debtor (subsidiary liability), the creditor must submit the demand to the principal debtor.
If the principal debtor refused to satisfy the demand of the creditor or the creditor has not received a reply from him within a reasonable period to the demand submitted, this demand may be submitted to the person who bears subsidiary liability.
2. The creditor shall not have the right to demand satisfaction of his demand against the principal debtor from a person bearing subsidiary liability if this demand can be satisfied by means of the set-off of the counter demand against the principal debtor, or by the uncontested recovery of means from the principal debtor.
3. The person who bears subsidiary liability must, before satisfaction of the demand submitted to him by the creditor, warn the principal debtor thereof, and if the suit is brought against such person, to involve the principal debtor in the case. Otherwise the principal debtor shall have the right to raise the objections against the regressive demand of the person bearing subsidiary liability, which he had against the creditor.
Article 371. Limitation of Amount of Liability for Obligations
l. The right to full compensation of losses may be limited (limited liability) by the legislation with regard to individual types of obligations and with regard to obligations connected with the determined kind of activity.
2. An agreement concerning the limitation of the amount of liability of a debtor under a contract of adhesion or other contract, in which the citizen acting as a consumer is a creditor, shall be void if the amount of liability for the particular type of obligations or for the particular violation has been determined by the legislation.
Article 372. Grounds of Liability for Violation of Obligation
1. A person who has not performed an obligation or who performed it improperly shall bear liability when there is fault (intent or negligence) except for instances when other grounds of liability have been provided for by the legislation or by the contract.
The person shall be deemed to be not at fault if with that degree of concern and attentiveness which is required of this person according to the character of the obligation and conditions of civil turnover the person has taken all measures for proper performance of the obligation.
2. The absence of fault shall be proved by the person who has violated the obligation.
3. Unless otherwise provided by the legislation or by the contract, the person who has not performed or who has improperly performed an obligation shall, when carrying out entrepreneurial activity, bear liability unless this person would prove that proper performance proved to be impossible as a consequence of force majeure, that is, the circumstances that are extraordinary and unavoidable under the particular conditions.
4. An agreement concluded earlier concerning the elimination or limitation of liability for an intentional violation of an obligation shall be void.
Article 373. Liability of Debtor for His Employees
The actions of the employees of a debtor relating to the performance of his obligation shall be considered to be the actions of the debtor. The debtor shall be liable for these actions if they entailed the failure to perform or the improper performance of the obligation.
Article 374. Liability of Debtor for Actions of Third Persons
A debtor shall be liable for the failure to perform or the improper performance of the obligation by third persons on whom performance has been placed unless it has been established by the legislation that liability shall be borne by the third person who is the immediate performer.
Article 375. Fault of Creditor
1. If the failure to perform or improper performance of an obligation has occurred through the fault of both parties, a court shall respectively reduce the amount of liability of the debtor.
A court also shall have the right to reduce the amount of liability of the debtor if the creditor has intentionally or through negligence facilitated the increase of the amount of losses caused by the failure to perform or improper performance, or has not taken reasonable measures to reduce them.
2. The rules of Clause 1 of this Article shall respectively apply also in instances when the debtor, by virtue of the legislation or the contract, bears liability for the failure to perform or improper performance of an obligation irrespective of the fault.
Article 376. Delay of Debtor
1. A debtor who has delayed performance shall be liable to the creditor for losses caused by the delay and for the consequences of the impossibility of performance, which incidentally ensued during the delay.
2. If, as a consequence of delay of the debtor, the performance has lost interest for the creditor, he may refuse to accept performance and demand compensation of losses.
3. The debtor shall not be considered to be delayed if the obligation can not be performed as a consequence of delay by the creditor.
Article 377. Delay of Creditor
l. The creditor shall be considered to have delayed if he refused to accept proper performance offered by the debtor or did not perform actions provided for by the legislation, or by the contract, or arising from the essence of the obligation, before the performance of which the debtor could not perform his obligation.
The creditor shall be considered to have delayed also in the instances specified in Article 379(2) of this Code.
2. The delay of the creditor shall give the debtor the right to compensation of losses caused by the delay if the creditor would not prove that the delay occurred through circumstances, for which neither the creditor himself nor those persons, on whom the acceptance of performance was placed by virtue of the legislation or the commission of the creditor, are liable.
3. With regard to a monetary obligation the debtor shall not be obliged to pay interest for the time of delay by the creditor.
CHAPTER 26
Termination of Obligations
Article 378. Grounds for Termination of Obligations
1. An obligation shall terminate wholly or in part on the grounds provided for by this Code, other acts of legislation or contract.
2. Termination of an obligation at the demand of one of the parties shall be permitted only in the instances provided for by the legislation or by the contract.
Article 379. Termination of Obligation by Performance
1. Proper performance shall terminate an obligation.
2. A creditor accepting performance shall be obliged, at the demand of the debtor, to issue him a receipt or other document of receiving performance fully or in respective part.
If a debtor has issued a debt document to a creditor in certification of the obligation, then the creditor, at accepting performance, must return this document, and if it is impossible to return, specify this on the receipt issued by him. A receipt may be replaced by an inscription on the returned debt document. The debt document being with the debtor shall certify, unless proven otherwise, the termination of the obligation.
If the creditor refuses to issue the receipt, to return the debt document, or to note on the receipt the impossibility of the return thereof, the debtor shall have the right to withhold performance. In these instances the creditor shall be considered to have delayed.
Article 380. Release-Money
By agreement of the parties an obligation may be terminated by granting release-money in place of performance (payment of money, transfer of property, etc.). The amount, periods, and procedure for granting release-money shall be established by the parties.
Article 381. Termination of Obligation by Set-Off. Instances of Inadmissibility of Set-Off
1. An obligation shall be terminated wholly or in part by the set-off of a counter demand of the same type, the period for which has ensued or the period of which has not been specified or is determined by the time of demand. The statement of one party is sufficient for set-off.
2. The set-off shall not be permitted for the following demands:
1) if, according to the statement of the other party, the limitation period is subject to application to the demand, and this period has expired;
2) concerning compensation of harm caused to life or health;
3) concerning the recovery of alimony;
4) concerning maintenance for life;
5) in other instances provided for by the legislation or by a contract.
Article 382. Set-Off in Event of Cession of Demand
In the event of cession of demand the debtor shall have the right to set-off, against the demand of the new creditor, his counter demand against the initial creditor.
The set-off shall be made if the demand arose on a grounds which existed at the time of receipt by the debtor of notification concerning the cession of demand, and the period of the demand ensued before receiving it or this period was not specified or is determined by the time of demand.
Article 383. Termination of Obligation by Coincidence of Debtor and Creditor in One Person
An obligation shall terminate by the coinciding of the debtor and the creditor in one person.
Article 384. Termination of Obligation by Novation
1. An obligation shall be terminated by agreement of the parties concerning the substitution of the initial obligation which existed between them by another obligation between the same persons providing for another subject or means of performance (novation).
2. Novation shall not be permitted with respect to obligations relating to compensation for harm caused to life or health and relating to the payment of alimony.
3. Novation shall terminate additional obligations connected with the initial one unless otherwise provided by agreement of the parties.
Article 385. Forgiveness of Debt
An obligation shall be terminated by the release of the debtor by the creditor from the duties laid on him, unless such release violates the rights of other persons with respect to the property of the creditor.
Article 386. Termination of Obligation for Impossibility of Performance
1. If in the bilateral contract the performance became impossible for one of the parties as a consequence of the circumstances, for which neither of the parties is liable, this party shall have no right to demand satisfaction under the contract from the other party, unless there are other provisions in the legislation or in the contract. Each of the parties has the right to demand from the contractor to return all that was performed by this party without receiving the counter satisfaction.
2. If in the bilateral agreements the performance became impossible for one of the parties by virtue of the circumstances, for which this party is liable, the other party has the right to deviate from the contract and to recover the losses caused by the failure to perform, unless there are other provisions in the legislation or in the contract
3. If in the bilateral agreements the performance became impossible for one of the parties by virtue of the circumstances, for which the other party is liable, the former party shall preserve the right for counter satisfaction with offsetting the advantages, saved or acquired by it as a result of relieving from the obligation.
Article 387. Termination of Obligation on Grounds of Act of State Body
1. If as a result of the issuance of an act of a state body the performance of an obligation becomes impossible wholly or partially, the obligation shall terminate wholly or in respective part.
The parties which have incurred losses as a result thereof shall have the right to demand compensation thereof in accordance with the legislation.
2. In the instance when the act of the state body, on the basis of which an obligation has terminated, is deemed in accordance with the established procedure to be invalid, the obligation shall be restored unless it arises otherwise from an agreement of the parties or the essence of the obligation, and if performance has not lost interest for the creditor.
Article 388. Termination of Obligation by Death of Citizen
1. An obligation shall be terminated by the death of the debtor if performance can not be made without the personal participation of the debtor or the obligation is otherwise inseparably connected with the person of the debtor.
2. An obligation shall be terminated by the death of the creditor if the performance was intended personally for the creditor or the obligation was otherwise inseparably connected with the person of the creditor.
Article 389. Termination of Obligation by Liquidation of Legal Person
An obligation shall be terminated by the liquidation of a legal person (debtor or creditor) except for instances when by the legislation the performance of an obligation of a liquidated legal person is placed on another person (relating to demands concerning compensation of harm caused to life and health, and in other events).
SUBSECTION 2. GENERAL PROVISIONS ON CONTRACT
CHAPTER 27
Concept and Conditions of Contract
Article 390. Concept of Contract
1. A contract shall be considered to be an agreement of two or several persons concerning the establishment, change, or termination of civil rights and duties.
2. The rules concerning bilateral and multilateral transactions provided for by Chapter 9 of this Code shall apply to contracts.
3. The general provisions on obligations (Articles 288-389) shall apply to obligations which arose from a contract unless otherwise provided by rules of this Chapter and by rules on individual types of contracts contained in the legislation.
4. The general provisions on contract shall apply to contracts concluded by more than two parties unless this is contrary to the multilateral character of such contracts.
Article 391. Freedom of Contract
1. Citizens and legal persons shall be free in concluding a contract.
Coercion to conclude a contract shall not be permitted except for instances when the duty to conclude a contract has been provided for by the legislation, or by an obligation voluntarily accepted.
2. The parties may conclude a contract which contains elements of various contracts provided for by the legislation (mixed contract). The rules on contracts, the elements of which are contained in a mixed contract, shall apply to the relations of the parties under a mixed contract, unless it arises otherwise from the agreement of the parties or the essence of the mixed contract.
3. The conditions of a contract shall be determined by discretion of the parties except for instances when the content of the respective condition has been prescribed by the legislation (Article 392).
In instances when conditions of a contract has been provided for by a norm which applies insofar as not otherwise established by agreement of the parties (dispositive norm), the parties may by their agreement establish a condition which differs from that provided therein, if this is not contrary to the legislation. In the absence of such agreement, the condition of the contract shall be determined by the dispositive norm.
Article 392. Contract and Legislation
1. A contract must correspond to rules established by the legislation, which are binding upon the parties.
2. If after the conclusion of a contract and before its termination, the act of legislation is adopted which establishes rules binding upon the parties other than those which were in action when concluding the contract, the conditions of the contract concluded shall be brought to conformity with the legislation, unless otherwise provided by the legislation.
Article 393. Contracts For and Without Compensation
1. A contract under which a party must receive payment or other counter-provision for the performance of its duties shall be a contract for compensation.
2. A contract under which one party undertakes to grant something to the other party without receiving payment or other counter-provision from it shall be deemed to be a contract without compensation.
3. A contract shall be presupposed to be a contract for compensation unless it arises otherwise from the legislation, or the content or essence of the contract.
Article 394. Price
1. The performance of a contract shall be paid for at the price established by agreement of the parties.
In the instances provided for by the legislation the prices (tariffs, price scales, rates, etc.) established or regulated by duly authorized state bodies shall be applied.
2. A change of the price after the conclusion of a contract shall be permitted in the instances and on the conditions provided for by contract, by the legislation, or in accordance with the procedure established by the legislation.
3. In instances when in a contract for compensation the price has not been provided for and may not be determined on the grounds of the conditions of the contract, the performance of the contract must be paid for at the price which under comparable circumstances usually recovered for similar goods, work, or services.
Article 395. Operation of Contract
1. A contract shall enter into force and become binding for the parties from the time of its conclusion.
2. The parties shall have the right to establish that the conditions of a contract concluded by them shall apply to their relations which arose before the conclusion of the contract.
3. It may be provided by the legislation or by contract that the ending of the period of operation of a contract shall entail the termination of the obligations of the parties under the contract.
A contract in which there is no such a condition shall be deemed to be in force until the time of the ending of performance of the obligation by the parties determined therein.
4. The ending of the period of operation of a contract shall not relieve the parties from liability for the violation thereof.
Article 396. Public Contract
1. A contract concluded by a commercial organization and establishing its duties relating to the sale of goods, fulfillment of work, or rendering of services which this organization by the character of its activity must effectuate with respect to everyone who has recourse to it (retail trade, carriage by common-use transport, communications services, electric power supply, medical, hotel servicing, and so forth) shall be deemed to be a public contract.
A commercial organization shall not have the right to prefer one person to others with respect to the conclusion of a public contract except for the instances provided by the legislation.
2. The price of goods, work, and services, and also other conditions of a public contract, shall be established identically for all consumers except for instances when the granting of privileges for individual categories of consumers is permitted by the legislation.
3. A refusal of a commercial organization to conclude a public contract when it is possible to grant the respective goods or services to the consumer or to fulfill the respective work for him shall not be permitted.
In the event of an unjustified evasion by a commercial organization from the concluding of a public contract the provisions provided for by Article 415(4) of this Code shall apply.
4. In instances provided for by the legislative acts, the Government of the Republic of Belarus may issue rules binding upon the parties when concluding and performing public contracts (standard contracts, statutes, etc.).
5. The conditions of a public contract which do not correspond to the requirements established by Clauses 2 and 4 of this Article shall be void.
Article 397. Model Conditions of Contracts
1. It may be provided in a contract that its individual conditions shall be determined by model conditions worked out for contracts of the respective type and published in the press.
2. Model conditions may be set out in the form of a model contract or other document containing these conditions.
Article 398. Contract of Adhesion
1. A contract of adhesion shall be deemed to be a contract, the conditions of which have been determined by one of the parties in records or other standard forms and which can be accepted by the other party not other than by means of adhering to the contract being offered as a whole.
2. A party which has adhered to the contract shall have the right to demand dissolution or change of the contract if the contract of adhesion, although not contrary to the legislation, deprives this party of the rights usually granted under contracts of that type, excludes or limits the liability of the other party for a violation of obligations, or contains other conditions clearly burdensome for the adhering party which it, proceeding from its own reasonably understandable interests, would not accept if it had the opportunity to participate in determining the conditions of the contract.
3. When the circumstances are present provided for in Clause 2 of this Article, the demand concerning dissolution or change of the contract presented by a party which has adhered to a contract in connection with the effectuation of its entrepreneurial activity shall not be subject to satisfaction, if the adhering party knew or should have known on what conditions the contract is concluded.
Article 399. Preliminary Contract
1. Under a preliminary contract the parties shall be obliged to conclude in the future a contract (principal contract) on the conditions provided for by the preliminary contract.
2. The preliminary contract shall be concluded in the form established for the principal contract, and, if the form of the principal contract has not been established, in written form. The failure to comply with the rules concerning the form of the preliminary contract shall entail its nullity.
3. A preliminary contract must contain conditions enabling to determine the subject and the other significant conditions of the principal contract.
4. A preliminary contract shall specify the period in which the parties are obliged to conclude the principal contract.
If such period has not been defined in the preliminary contract, the principal contract shall be subject to conclusion within a year from the time of concluding the preliminary contract.
5. In instances when a party, which has concluded a preliminary contract, evades the conclusion of the principal contract, the provisions established for conclusion of contracts in obligatory procedure (Article 415(4)) shall apply.
6. The obligations provided for by a preliminary contract shall terminate if until the ending of the period in which the parties must conclude the principal contract it would not be concluded, and neither of the parties would send to the other party an offer to conclude this contract.
Article 400. Contract to Benefit of Third Person
1. A contract to the benefit of a third person shall be deemed to be a contract in which the parties have established that a debtor is obliged to make performance not to the creditor, but to a third person specified or not specified in the contract and having the right to demand performance of the obligation to its benefit from the debtor.
2. Unless otherwise provided by the legislation or a contract, from the time of the expression by the third person to the debtor of an intention to take advantage of his right under the contract, the parties may not dissolve or change the contract concluded by them without the consent of the third person.
3. The debtor in the contract shall have the right to raise against the demand of the third person objections which he could raise against the creditor.
4. When a third person waives a right granted to him under the contract, the creditor may take advantage of this right unless this is contrary to the legislation and to the contract.
Article 401. Interpretation of Contract
In the event of the interpretation of the conditions of a contract by a court the literal meaning of the words and expressions contained therein shall be taken into account. The literal meaning of the condition of a contract in the event of its ambiguity shall be determined by means of comparing with the other conditions and with the sense of the contract as a whole.
If the rules contained in the first part of this Article do not enable to determine the content of the contract, the true common will of the parties must be elicited by taking into account the purpose of the contract. In so doing, all the respective circumstances, including negotiations preceding the contract, correspondence, practice being established in the mutual relations of the parties, and the subsequent conduct of the parties, shall be taken into account.
CHAPTER 28
Conclusion of Contract
Article 402. Basic Provisions on Conclusion of Contract
1. A contract shall be considered to be concluded when agreement regarding all the significant conditions of the contract has been reached in the form required in appropriate instances.
Conditions concerning the subject of the contract, conditions which are named in the legislations as significant or necessary for contracts of the particular type, and also all those conditions in relation to which an agreement must be reached according to the statement of one of the parties, shall be significant conditions.
2. A contract shall be concluded by means of sending an offer (proposal to conclude a contract) by one party and its acceptance (acceptance of the proposal) by the other party.
Article 403. Time of Conclusion of Contract
1. A contract shall be deemed to be concluded at the time of receipt of acceptance by the person who has sent an offer.
2. If in accordance with the legislation the transfer of property also is necessary in order to conclude a contract, the contract shall be considered to be concluded from the time of the transfer of the respective property (Article 225).
3. A contract subject to state registration shall be considered to be concluded from the time of the registration thereof, or, if the notarial certification and registration is necessary, from the time of registration of the contract, unless otherwise established by the legislative acts.
4. A contract concluded at the exchange shall be deemed concluded from the moment determined by the legislation regulating activities of such exchange or by the rules effective at the exchange.
Article 404. Form of Contract
1. A contract may be concluded in any form provided for in order to conclude transactions unless a determined form has been established by this Code and by other acts of legislation for contracts of the particular type.
If, in accordance with the legislation, the notarial form is not necessary for the particular type of contracts, but the parties have agreed to conclude it in the notarial form, the contract shall be considered to be concluded from the time of imparting the notarial form to it.
If, in accordance with the legislation, the written form (simple or notarial) is not necessary for the particular type of contracts, but the parties have agreed to conclude it in the simple written form, the contract shall be considered to be concluded from the time of imparting the simple written form to it.
2. A contract in written form may be concluded by means of drawing up one document signed by the parties, and also by means of the exchange of documents by means of postal, telegraph, teletype, telephone, electronic, or other communications, enabling it to be reliably established that the document comes from a party under the contract.
3. The written form of the contract shall be considered to be complied with if the written offer to conclude a contract has been accepted in accordance with the procedure provided for by Article 408(3) of this Code.
Article 405. Offer
1. A proposal addressed to one or several specific persons which is sufficiently definite and expresses the intention of the person who has made the proposal to consider himself to have concluded a contract with the addressee who will accept the proposal shall be deemed to be an offer.
An offer must contain the significant conditions of the contract.
2. An offer shall bind the person who sent it from the time of its receipt by the addressee. If notice of the revocation of an offer has been received earlier than or simultaneously with the offer itself, the offer shall be considered to be not received.
Article 406. Irrevocability of Offer
An offer received by the addressee may not be revoked within the period established for its acceptance unless otherwise stipulated in the offer itself or does not arise from the essence of the proposal or situation in which it was made.
Article 407. Invitation to Make Offers
1. An advertisement and other proposals addressed to an indefinite group of persons shall be regarded as an invitation to make offers unless expressly specified otherwise in the proposal.
2. A proposal, from which the will of the person making the proposal is seen to conclude a contract on the conditions specified in the proposal with anyone who responds, and containing all the significant conditions of a contract, shall be deemed to be a public offer.
Article 408. Acceptance
1. The reply of a person to whom an offer has been addressed concerning the acceptance thereof shall be deemed to be an acceptance.
An acceptance must be full and unconditional.
2. Silence shall not be an acceptance unless it arises otherwise from a legislation or agreement between the parties.
3. The performance by a person who has received an offer, within the period established for its acceptance, of actions relating to the fulfillment of the conditions of the contract specified therein (shipment of goods, rendering of services, fulfillment of work, payment of respective amount etc.) shall be considered to be an acceptance unless otherwise provided by the legislation or specified in the offer.
Article 409. Revocation of Acceptance
If notice of the revocation of an acceptance has been received by the person, by whom the offer was sent, earlier than or simultaneously with the acceptance itself, the acceptance shall be considered to be not received.
Article 410. Conclusion of Contract on Basis of Offer Determining Period for Acceptance
When a period for acceptance is determined in an offer, a contract shall be considered to be concluded if the acceptance was received by a person who has sent the offer within the limits of the period specified therein.
Article 411. Conclusion of Contract on Basis of Offer Not Determining Period for Acceptance
1. When a written offer does not determine the period for acceptance, the contract shall be considered to be concluded if the acceptance was received by the person who has sent the offer before the end of the period established by the legislation, and if such a period has not been established, during the time normally necessary for this.
2. When an offer has been made orally without specifying the period for acceptance, the contract shall be considered to be concluded if the other party immediately declared its acceptance thereof.
Article 412. Acceptance Received Late
1. In the instances when a notification of acceptance sent in good time has been received late, the acceptance shall not be considered to be late if a party who has sent the offer would immediately inform the other party about the late receipt of the acceptance.
2. If a party who has sent an offer immediately informs the other party about the accepting of its acceptance which has been received late, the contract shall be considered to be concluded.
Article 413. Acceptance on Other Conditions
A reply concerning consent to conclude a contract on conditions other than those proposed in the offer shall not be an acceptance.
Such a reply shall be deemed to be a refusal to accept and, at the same time, a new offer.
Article 414. Place of Conclusion of Contract
Unless the place of conclusion has been specified in the contract, a contract shall be deemed to be concluded at the place of residence of a citizen or location of the legal person which sent the offer.
Article 415. Conclusion of Contract in Obligatory Procedure
1. In instances when in accordance with this Code or other acts of legislation the conclusion of a contract for one of the parties to whom an offer (draft contract) is obligatory, this party must send to the other party a notification concerning acceptance, or rejection of acceptance, or acceptance of the offer (draft contract) on other conditions (protocol of disagreements to draft contract) within 30 days from the date of receipt of the offer.
A party who has sent an offer and received from the party, for whom the conclusion of the contract is obligatory, a notification of its acceptance on other conditions (protocol of disagreements to draft contract), shall have the right to transfer disagreements, which have arisen when concluding the contract, for consideration of a court within 30 days from the date of receipt of such notification or the expiry of the period for acceptance.
2. In instances when in accordance with this Code or other legislation the conclusion of a contract is obligatory for the party who has sent an offer (draft contract) and a protocol of disagreements to the draft contract is sent to it within 30 days, this party shall be obliged within 30 days from the date of receipt of the protocol of disagreements to notify the other party about acceptance of the contract in the wording thereof or about rejection of the protocol of disagreements.
In the event the protocol of disagreements is rejected, or non-receiving of notice concerning the results of the consideration thereof within the specified period, the party which sent the protocol of disagreements shall have the right to transfer the disagreements which arose when concluding the contract for the consideration of a court.
3. The rules concerning the periods, provided for by Clauses 1 and 2 of this Article, shall apply unless other periods have been established by the legislation, or have not been agreed by the parties.
4. If a party for which in accordance with this Code or other acts of legislation the conclusion of the contract is obligatory evades the conclusion thereof, the other party shall have the right to apply to a court with a demand to compel the contract to be concluded.
The party which has unjustifiably evaded the conclusion of the contract must compensate the other party for losses caused by this.
Article 416. Precontractual Disputes
In the instances of the transfer of disagreements, which arose when concluding a contract, for the consideration of a court on the basis of Article 415 of this Code or by agreement of the parties, the conditions of the contract with regard to which the parties had disagreements shall be determined in accordance with the decision of the court.
Article 417. Conclusion of Contract at Public Sale
1. A contract may, unless it arises otherwise from the essence thereof, be concluded by means of holding public sales. The contract shall be concluded with the person who has won the public sale.
2. The owner of the thing or the possessor of the property right or a specialized organization may act as the organizer of a public sale. A specialized organization shall operate on the ground of a contract with the owner of the thing or the possessor of the property right and shall act in their name or in its own name.
3. In the instances specified in this Code or in another acts of legislation, contracts concerning the sale of a thing or property right may be concluded only by means of holding public sales.
4. A public sale (tender) shall be held in the form of an auction or a competition. The person who has won the public sale at an auction shall be deemed the person who has proposed the highest price, and at a competition, the person who in accordance with the opinion of a competition commission, previously appointed by the organizer of the public sale, proposed the best conditions.
5. An auction or competition in which only one participant took part shall be deemed to be not effectuated.
6. The rules provided for this Code shall apply to a public sale held by way of execution of the decision of a court unless otherwise provided by procedural legislation.
Article 418. Organization and Procedure for Holding Public Sale
1. Auctions and competitions may be open and closed. Any person may participate in an open auction or open competition. Only persons specially invited for this purpose shall participate in a closed auction or closed competition.
2. Unless otherwise provided by the legislation, a notice concerning the holding of a public sale must be made by the organizer not less than thirty days before holding it. The notice must in any event contain information concerning the time, place, and form of the public sale, the subject thereof and the procedure for holding it, including the formalization of participation in the public sale, determination of the person who wins the public sale, and also information concerning the starting price.
If the subject of the public sale is only the right to conclude a contract, the period granted for this must be specified in the notice of the forthcoming public sale.
3. Unless otherwise provided in a legislation or in the notice on holding the public sale, the organizer of an open public sale who has given notice shall have the right to refuse to hold an auction at any time, but not later than three days before the date of its holding, and for a competition, not later than thirty days before holding the competition.
In instances when the organizer of an open public sale refuses to conduct it in violation of the specified periods, he shall be obliged to compensate participants for real damage incurred. The organizer of a closed auction or closed competition shall be obliged to compensate the invited participants for real damage irrespective of when the refusal to hold the public sale followed the sending of the notice.
4. The participants of a public sale shall make a deposit in the amount, within the periods, and in accordance with the procedure specified in the notice on holding the public sale, in the account of performance of the obligations under the contract, which can be concluded at the public sale.
5. A person who has won a public sale and the organizer of the public sale shall sign, at the day of holding the auction or competition, a protocol concerning the results of the public sale, which shall have the force of a contract. If the person who won the public sale evading the signing of the contract, this person shall lose the deposit made by him. If the organizer of a public sale evading the signing of the protocol, he shall be obliged to return the deposit in double the amount, and also to compensate the person who won the public sale for losses caused by participation in the public sale in that part exceeding the amount of the deposit.
If only the right to conclude a contract was the subject of a public sale, such contract must be signed by the parties not later than twenty days or other period specified in the notice after the completion of the public sale and drawing up of the protocol. If one of the parties evading the conclusion of the contract, the other party shall have the right to apply to a court with a demand to compel the contract to be concluded, and also for compensation of losses caused by evading the conclusion thereof.
Article 419. Consequences of Violation of Rules for Holding Public Sale
1. A public sale held in violation of the rules established by the legislation may be deemed by a court to be invalid upon the suit of an interested person.
2. The deeming of a public sale to be invalid shall entail the invalidity of the contract concluded with the person who won the public sale.
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