In Russian legal practice, there is the concept of an investment contract. Of particular interest is the fact that, despite the widespread use of this type of agreement, it does not have official formalization in legislative sources. How are such contracts drawn up in practice?
Definition
According to a common interpretation, an investment agreement is an agreement, as a rule, of a commercial nature that defines the mechanism for transferring money or material assets to a company or a group of entities for the purpose of subsequent return of investments in the form of a percentage premium or an asset endowed with a high value. By signing a contract of this kind, the investor transfers the finances or property in favor of another person, most often in ownership or operational management.
Thus, the main purpose for which an investment activity agreement is concluded is the subsequent receipt of the commercially tangible benefits of the investor of cash or material assets. At the same time, the investor’s source of income is the organization’s activity in which he invested. The agreement in question usually assumes that the respective activities of the recipient of funds are entrepreneurial in nature. Although the legal nature of such agreements may be very different.
Construction investment
The investment agreement in construction has gained particular popularity. The source of financing the activities of developers, as a rule, are funds received from outside - from citizens (if it comes to the construction of houses), organizations, the state or municipalities (if the object has a commercial purpose). An investment agreement in the field of construction implies that the investor transfers money to the developer in exchange for receiving the finished property upon its construction (or, as an option, the right to buy an object of interest with significant preferences).
An interesting fact is that this type of contract is not classified in any way in the civil legislation of the Russian Federation.
From the point of view of legal status, an investment agreement for construction is a sample of a mixed agreement, the legitimacy of which is guaranteed by the wording of clause 2 of article 421 of the Civil Code of the Russian Federation - on the possibility of concluding contracts that may or may not be provided for by the laws of the Russian Federation.
The structure of such agreements, as a rule, implies the presence of elements characteristic of types of agreements in various fields.
That is, construction contracts may contain language specific to a loan, contract or, for example, partnership, based on the specifics of the company receiving the investment.
The nuances of the law
At the same time, the Civil Code of the Russian Federation is not the only source of law that determines the status of construction contracts (more precisely, it provides guidelines for compiling their structure). When drafting such agreements, the Federal Law "On Investment Activities" and the Law of the RSFSR of a similar orientation can be applied - in those parts where the provisions do not contradict the newer legal act. For example, some of the norms set forth in the aforementioned Federal Law apply if it is not about building an object from scratch, but, say, overhauling or reconstructing it. Agreements of this kind are also referred to in some cases as investment agreements.Since there is no clear definition of such contracts in civil law, this is not a mistake.
Signs of investment contracts
As we noted above, the laws of the Russian Federation do not give a clear definition of what an investment agreement is. At the very beginning of the article, we presented one of the popular interpretations of this term, but our definition is not official. At the same time, several typical features of an investment contract are highlighted by Russian lawyers. Consider them.
The key criterion here is the economic content of the agreements. Some lawyers believe that it does not matter if the investment agreement is concluded between individuals, legal entities, or both - civil rights subjects can be any (like objects). Proponents of this opinion refer to the wording of the RSFSR Law "On Investment Activity" - it says, in particular, that the objects of investment activity can be funds and circulating assets in all spheres and segments of the national economy.
In the Federal Law, adopted already in the Russian Federation, in turn, it is said that the object of investments can be property in any form of ownership - private, state, municipal and others. Some lawyers draw attention to a number of subordinate sources of law. For example, one of the documents of the Russian arbitration practice says that the investment agreement must necessarily contain a wording reflecting the purpose of the depositor to receive income or other preferences.
Experts identify the following several key features by which a contract can be classified as "investment." Namely:
- conclusion of an investment agreement should imply the long-term nature of relations between the parties;
- the agreement should be mutual in nature (that is, in exchange for receiving investments, the entity transfers to the depositor the result of the investment - income, real estate, preferences, etc.);
- the agreement must be based (in the form of design documentation, an offer, commercial offer etc.);
- the contract should reflect the commercial interest of the parties (that is, the investor receives some remuneration).
Depending on the business sector in which the investor and the recipient of funds are cooperating, the agreement may also include formulations involving the intended use of finances and material assets transferred by the investor, as well as the general or shared nature of ownership of the property that is transferred to the investor.
Investment partnership
In 2012, the institution of an investment partnership was legislatively fixed in Russia, reflecting a special form of joint activity of partners. What are the features of the agreements concluded between them? The investment partnership agreement, first of all, has the specifics of the subject.
In most cases, such is the joint acquisition of securities of business entities, as well as shares forming equity capital in a special kind of legal form of business - economic partnership. An investment partnership, therefore, is a kind of compromise option for the implementation of legal relations between such forms as limited partnership (typical for legal entities) and simple partnership (in which individuals can participate).
An investment partnership implies a contractual relationship in which intermediate taxes are not paid in the distribution of income between participants. In this case, the legislator provides the parties to the agreement not to disclose the terms of transactions in public. And in this, the status of the investment partnership in some ways differs from the agreement between organizations. But there are common points between those and others. For example, in most cases you need to prescribe contract time investment partnership, take into account the specifics of the withdrawal from the agreement of specific participants, especially the interaction with creditors, etc.
The practice of drafting investment contracts in construction
Let us return to the study of agreements specific to the construction industry - as one of the most popular in terms of investment relations in business. It will be useful to study, for example, the algorithm for the correct preparation of such contracts, based on the criteria adopted in the Russian legal system. We noted above that the form of an investment agreement may have signs of similarity with agreements that are characteristic of other areas of the business — lending, sales, etc. Based on this feature, how to properly design contracts?
First, any civil agreement must begin with the preamble. As a rule, it sets out the name of the contract, the place and time and its conclusion. The next component is information about the parties to the agreement. If an investment agreement is concluded between legal entities, it is necessary to fix their official name, as well as list the officials who act on behalf of the relevant structures. If one of the parties to the contract is an individual, then it is necessary to indicate his identification data (name, series and passport number, address of registration).
Note that the obligated party to a transaction usually has one of two main statuses - either it is the customer or the contractor. In the first case, this means that the investor’s counterparty is obliged to attract additional contractors - that is, it is mainly the managing structure. But it is quite possible that the same legal entity will be both the customer and the contractor. However, experts nevertheless recommend the use of the first term in the contract.
The following are the terms of the investment contract. As a rule, the subject of the agreement, financial indicators, as well as the content of the contract are recorded here. Some lawyers believe, referring to the provisions of Article 432 of the Civil Code, that the key condition of an investment agreement is precisely the subject. A typical wording here may sound something like this: "The investor participates in financing the project by transferring funds, and the customer uses them for the purpose of construction and subsequent transfer of the property to the benefit of the counterparty." Of course, depending on the specifics of a particular project, the wording may be different.
The investment agreement, the sample of which we are currently drawing up, should also contain the address of the future property (street, house, building and apartment number, if they can be known), number of storeys and other signs characterizing its geographical location. In some cases, experts recommend applying to the contract a graphic plan of the location of the object on the ground, and also, if possible, also the layout of the apartment.
The next paragraph - the parties to the investment agreement fix the list of works that the obligated party must carry out in order to fulfill the terms of the contract on its part. Experts recommend that their contents be disclosed in detail, that is, write in the agreement that they will be construction, technical, installation works, laying of communal infrastructure, electricity. If finishing is provided, we also fix it. In some cases, a list of relevant works, as well as additional documentation on them, is more convenient to place in the annexes to the main contract.
The next paragraph of the contract is the price. It is possible that the customer wants to install it in foreign currency. But in this case, the main source of data on its exchange rate against the ruble should be indicated - as a rule, this is information from the Central Bank of the Russian Federation. That is, you can fix this wording: "Calculations in rubles are made based on the exchange rate established by the Central Bank of the Russian Federation on the day when the investor makes the payment."In the "price" section of the contract, it is necessary to reflect the total amount of the contribution from the investor, and also, since the subject of the agreement is real estate, the price per square meter of housing.
The investment contract, the sample of which we are compiling, should include information on the date on which the customer (the contractor, if these statuses are combined) fulfills his contractual obligations. In the 314th article of the Civil Code of the Russian Federation it is said that if the period is not defined, then a reasonable period of time is taken as the basis. But it is better, of course, to specify this condition of the contract. At the same time, the term may be tied to different points - the delivery of the object for acceptance or the fact of registration by the investor of the right to own an apartment. A specific criterion is determined by the parties to the contract, guided by objective priorities.
Investor Responsibilities
It will be useful to pay attention to such an item as investor responsibilities. Experts believe that a typical draft investment contract may contain the following combination of them:
- transfer money or other material resources within the terms agreed upon by the contract (provide them with the customer on a regular basis);
- to supply the partner with necessary documents of title and other kinds;
- pay, if required by agreement, a separate fee to the customer;
- carry out the acceptance of the object.
Customer Responsibilities
In turn, the customer is also endowed with a certain range of obligations. What should he do:
- develop or order project documentation;
- find and allocate land for the construction of real estate;
- to report on the process of construction and investment spending in accordance with the schedule defined by the contract;
- to conduct, if provided for by the contract or the requirements of the legislation, tenders for the attraction of contractors;
- to form a team of builders and specialists of other necessary profiles;
- monitor and carry out technical supervision of the work of counterparties;
- hand over the object to acceptance;
- provide the investor with the necessary documents.
Features of the construction of the contract
If we simplify the algorithm for constructing an investment contract in construction, it will look something like this:
- one side, that is, the investor, is obliged to transfer funds to the customer;
- the other party, using the appropriate remuneration, must invest the funds received, based on the specifics of the investment project, in the construction of the property and subsequently transfer it to the investor;
- The agreement should include terms and other conditions.
The content of the contract, if summarizing its main points, will be as follows: the preamble, the essential conditions (subject, financial aspects, terms), as well as the usual conditions, after - the rights and obligations of each of the parties.
Stages of the implementation of the construction contract
We studied the approximate structure of an investment contract in the construction industry. Let us now consider the steps in which the relevant agreement can be implemented. Experts identify three main stages of the implementation of the investment project.
Firstly, this is the period preceding direct financial settlements. As part of it, the customer prepares project documentation, an economic feasibility study, and provides technical preparation for the construction of a real estate object. As for the source of the first type, it is a collection of information that reflects the application of technologies and engineering solutions in a construction project.
In this case, the list of works provided for in the design documentation may be indicative. In some cases, the investor may require the customer to supply a business plan, which should clearly reflect the benefits of a particular project, based on its technological and engineering specifics.
Secondly, this is the investment and construction phase as such.Within its framework, the customer finds an investor, concludes an appropriate type of contract with him, signs contracts, in turn with counterparties, draws up labor relations with hired specialists. After - he builds the object, and then - transfers it to the investor.
Thirdly, this is an operational phase. As part of it, additional work can be done - in the direction of finishing, supplying the object with additional communal resources, solving possible issues related to shortcomings made during construction, etc.
Transfer of the object to the investor
An investment contract for construction, a sample of which we have examined above in terms of key features, implies that the transfer of the property must be accompanied by the signing of an acceptance certificate (or similar document) upon completion of construction. In addition, the investor must also receive the necessary title documents. In some cases, the customer also undertakes to transfer to the partner’s disposal the main sources according to the profile of the working documentation - they can be used, for example, during finishing work or reconstruction.
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