Profits

After deductions have been made to the funds, the rest of the profit is divided between the partners in proportion to their share in the authorized fund. The profit due to the foreign partner may be placed in the bank, spent within the country or repatriated abroad. Profits may be transferred from Russia to foreign countries by way of import substitution.

A joint venture is subject to a tax on its profits. According to the tax regulations, a joint venture is exempt from the profit tax for 2 years. The tax holiday begins from the moment profits are first made by a joint venture.

Legal status

A joint venture is a legal person. It may sue and be sued and may also appeal to Russian and third party courts. In case of dissolution the foreign participant has the right to recover the initial contribution which he made to the authorized fund.

Vocabulary exercises

Ex.1. Arrange the following words into three groups according to the place of the stress in these words:

III

participant, participation, territory, foreign, capital, economy, economic, revive*, introduction, development, establish, to produce, produce, to export, oriented, satisfy, technology, technological, experience, domestic, majority, substitution, extensively, juridical, registered, commodity, overwhelming, legal, feasibility, procedure, personnel, objective, product, manufacture, conclude, marketing, contract, directorate, authorized, initial, obliged, reserve, research, deductible, transferred, strategy, object, exempt

6x 2. Read and translate groups of derivatives:

1) develop - development - developing - developed - underdeveloped 2} participate - participation - participant

3. satisfy - satisfactory - satisfaction

4. relate -- related - relation - relationship - relative - relatively - relativity

5. attract - attraction - attractive

6. represent - representation - representative

7. author - authorship - authority - authorize - authorized (fund)

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Ex.3. Match the verbs with the nouns:

1. set up

2. carry out

3. develop

4. satisfy

5. sign 6} raise

7)cover

8. manufacture

9. conclude 10)open 11) make

1. agreement 6) protocol of intent

2. funds 7) requirements

3. profit 8) joint venture

4. product 9) relations

5. transactions 10) objective

11) account

Ex.4. Use proper prepositions:

has been registered ... the Ministry of Finance

the agreement... partners

is managed ... a Board ... Directors

contribution ... kind or... cash

in proportion ... the share ... the authorized fund

may be transferred ... Russia ... foreign countries

... way ... import substitution

is exempt... the profit tax ... 2 years

5. What document is signed if the parties want to form a partnership?

6. In what case does a joint venture become a juridical person?

7. What are the most important documents for the application procedure?

8. What body is a joint venture managed by?

9. How is the authorized fund formed?

10. In what way is the reserve fund formed?

11. Why is the research and development fund exempt from tax?

12. In what proportion is the profit devided between the partners?

13. How can foreigners' profits be transferred from Russia to foreign countries?

14. Is joint venture a legat or a physical person? -

15. What can a foreign participant do in case of dissolution?

Ex.5. Find synonyms to the following words:

take part -decrease -to form -principal -

establish -determine -needs -goal-national -

by means of -juridical -to satisfy -tax-free -to be taxed -

•

Ex.6. Give Russian equivalents to the following words:

by means of, tax-free, in the early 1920s, authorized fund, tax deductabie, the rest of, to satisfy the requirements, to sign a Protocol of Intent, to be subject to the tax, due to, annual deductions, to recover initial contributions, is obliged, may be placed, in one's own name, overwhelming majority, ceased to exist.

Ex.7. Indicate the meanings of all -ing and -ed forms in the text. Translate them into Russian.

Ex.8. Answer the following questions. (Use them as a plan for retelling the text.)

1. What kind of organizations (or firms) are called «joint ventures»?

2. When were joint ventures set up in our country for the first and for the second time?

3. When did the overwhelming majority of joint-stock companies in the territory of Russia cease to exist?

4. What are the main features of interest to Russian participant nowadays?

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