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Forms of state participation in civil turnover: the experience of Russia, Kazakhstan and China

Обновлено 11.06.2024 08:33

 

In the modern world, the state is becoming an active participant in civil turnover, becoming involved in solving public tasks and ensuring common benefits by establishing legal entities. Unitary forms of legal entities, previously popular in the field of public property management, have faded into the background compared to corporate entities with state participation, the effectiveness and expediency of which is ambiguous. The question is raised about the formation of general trends in the legal regulation of the mechanism and forms of state participation in civil turnover both in Russia and abroad.

Using the formal legal method of studying the norms of legislation and doctrine, the mechanisms and forms of the state's inclusion in civil circulation and the realization of property rights by it are compared. The participation of the state in civil legal relations is investigated indirectly or on special instructions, excluding the direct participation of state bodies in civil turnover. Special attention is paid to the statuses of state corporations and companies, public law companies that occupy a special place in the mechanism of solving state tasks and, as a rule, do not have economic efficiency.

The analysis of the legislation and practice of Kazakhstan and China as countries with a peculiar approach to regulating state participation in ensuring public interests through stimulating private participants in turnover and the introduction of special forms of organizations is presented. Commercial and non-commercial joint-stock companies are compared, the prospects of introducing such a form of organizations as social and entrepreneurial corporations are assessed.

The article substantiates the absence of a system of organizational and legal forms of legal entities that allow meeting the modern needs of the state and society and fully ensuring effective management of public property to solve state tasks. The prospect of reforming the legal regulation of state participation in the activities of corporations is being determined.

 

Keywords: civil turnover, unitary enterprises, public law companies, social and entrepreneurial corporations, non-profit joint stock company.

 

The problems of registration of the state's participation as a public subject of law in civil turnover have a long history and remain popular at the present time. At the same time, there are not so many options available for implementation in modern legal realities.

Even G.F. Shershenevich, introducing the term "public legal entity", on the one hand, assigned a separate role to the treasury as "the state from its economic side" <1>. On the other hand, singling out institutions familiar to modern law as public, the jurist also perceived local self-government bodies as independent legal entities.

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<1> Shershenevich G.F. Favorites. Vol. 5: Textbook of Russian civil law / Comp. P.V. Krasheninnikov. M., 2017. p. 128.

 

Modern researchers pay no less attention to the issue of "publicity" of legal entities <2>. Nevertheless, there is no uniformity of legal regulation in both doctrine and practice.

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<2> See, for example: Bazarov V.B. Public legal entities / Scientific ed. L.V. Kuras. Irkutsk, 2019; Chirkin V.E. A legal entity of public law. M., 2007; Yastrebov O.A. A legal entity of public law. Questions of theory. M., 2010.

 

E.A. Sukhanov repeatedly noted "the need to substantiate and develop a modern system of organizational and legal forms of participation of the state and other public owners (regions, municipalities) in property turnover" <3>. The scientist draws attention to the existence of an objective need to create legal entities that could be effectively used by the state, since they continue to play an important role in the domestic economy.

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<3> Sukhanov E.A. On the civil legal personality of state legal entities // Journal of Russian Law. 2018. N 1. P. 8.

 

At the same time, the question of the mechanism and forms of both the inclusion of the state in civil circulation and the realization of property rights by it remains open. There is a need to analyze and evaluate the approaches of various States to solving this problem. If we pay attention exclusively to the participation of the state in civil legal relations indirectly or on special instructions <4> (excluding the direct participation of state bodies in civil turnover), then it can be stated that the Russian experience is mainly manifested through the participation of the state either in corporate organizations (as a rule, joint-stock companies), or in the creation of unitary enterprises and various institutions.

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<4> See: Kirillova E.A., Artemova P.V. Forms of state participation in civil legal relations // Socio-political sciences. 2018. N 4.

 

A special place in the system of organizational and legal forms of legal entities is occupied by state corporations, state-owned companies and public law companies. The first and second were enshrined in Federal Law No. 7-FZ of January 12, 1996 "On Non-Profit Organizations", were established to solve specific government tasks of a narrow focus (for example, the Deposit Insurance Agency Group of Companies) and by their nature were not corporate entities, despite the name. Still others appeared in the list of subjects of civil law much later, their status was established by Federal Law No. 236-FZ dated July 3, 2016 "On Public Law Companies in the Russian Federation and on Amendments to Certain Legislative Acts of the Russian Federation", which defines, among other things, the ways of their creation through reorganization from state corporations, joint-stock companies It can be concluded that the legislator planned to replace many existing ones with this organizational and legal form. It was assumed that public law companies would replace state corporations as an unsuccessful organizational form <5>. But the practice of recent years shows that public law companies have not gained much popularity, today only six have been created: four on the basis of federal laws (for example, Roskadastr) <6> and two on the basis of decrees of the President of the Russian Federation (for example, the Russian Environmental Operator) <7>.

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<5> See: Timoshenko V. Public law companies - the decline of the era of state corporations?

<6> See: Federal Law No. 448-FZ of December 30, 2021 "On the Public Law company Roskadastr".

<7> See: Decree of the President of the Russian Federation No. 8 dated January 14, 2019 "On the creation of a public law company for the formation of an integrated solid municipal waste management system "Russian Environmental Operator".

 

It should be noted that state corporations, state-owned companies and public law companies have a common property. Their basic purpose is to ensure the exercise of public powers, the solution of state tasks to meet public needs. From this point of view, there are no questions about the expediency of establishing these organizations, since the state sets them quite specific tasks of a non-commercial nature.

At the same time, so-called legal entities with state participation, i.e. corporate relations connected with the state, are becoming increasingly popular. At the same time, it is worth excluding organizations from the center of attention, according to A.Ya. Kurbatov, performing public functions <8>, which, for example, include the Social Fund of Russia, the State Development Corporation VEB.RF" and others

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<8> For more information, see: Kurbatov A.Ya. About legal entities of public law // Economy and law. 2009. N 10. pp. 77-85.

 

State and municipal enterprises and institutions, on the property of which their founders (public entities) have limited property rights, differ from persons with state participation (paragraph 3 of Article 48 of the Civil Code of the Russian Federation). These organizations have been successfully incorporated into Russian civil circulation for many decades, being formally commercial organizations. The state positioned them as such, focusing on the profit they made, which was usually insignificant. But the underlying reasons for the preservation of unitary enterprises as an organizational and legal form were in the public legal plane of their activities. Basically, enterprises were created to fulfill specific tasks that are, as a rule, of a public nature (an example can be enterprises of the military-industrial complex).

Nevertheless, the ideas of a conceptual revision of the design of the law of operational management and economic management have been repeatedly voiced by a number of Russian and foreign scientists. Even in the Concept of the development of civil legislation of the Russian Federation, the futility of unitary enterprises as an organizational and legal form of a legal entity and the need for its gradual replacement by other types of commercial organizations, including business entities with one hundred percent or other decisive participation of public legal entities in their property were noted <9>. Nevertheless, according to the fair opinion of N.V. Kozlova, O.V. Gutnikov and other scientists, public founders are already connected with the above-mentioned organizations not so much by property as by corporate relations, since they determine the content of the charter, appoint a head, receive part of the profit, etc. <10>.

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<9> See: Yakovlev V.F. The concept of the development of civil legislation // Bulletin of the Supreme Arbitration Court of the Russian Federation. 2009. N 11. P. 39.

<10> See: Gutnikov O.V. State organizations as subjects of corporate relations: on the admissibility of participation in corporate relations of unitary legal entities // Journal of Russian Law. 2016. N 7. pp. 44-52; Kozlova N.V. Legal personality of a legal entity. M., 2005. pp. 130-131.

 

Analyzing the status of commercial legal entities with state participation, it is necessary to determine its nature as corporate, manifested, in particular, in obtaining corporate control by the state and other public entities. This may look like the acquisition by the state of a share or a block of shares in business entities formally established by a private person, or as the transformation of unitary enterprises into joint-stock companies with one hundred percent state participation. There is a reasonable question about the expediency of such forms of state participation in civil turnover, as well as about the purposes of the activities of such organizations, since the mentioned organizational and legal forms, when they were fixed in civil legislation, were intended for use by private business entities for commercial purposes. In the case of State participation, the objectives of the activities of such organizations should be determined taking into account the public interest and the desire to ensure the common good. But for now, it is fundamentally important that these legal entities have ownership rights to their property, and not limited property rights, which provides public entities with broader opportunities to achieve their goals.

It can be stated that in the Russian practice of public property management, options for transferring property to both ownership and ownership are combined, and the state's decision-making capabilities are very diversified. In foreign practice, there are attempts to define a single mechanism for resolving the issue. Of particular interest is the experience of our partner countries: the Republic of Kazakhstan (hereinafter also referred to as the Republic of Kazakhstan) and the People's Republic of China (hereinafter also referred to as the PRC).

Kazakhstan. In general, the legal doctrine of the CIS countries notes the position of the inexpediency of maintaining special regulation of the law of operational management and economic management. Kazakh lawyers in the Concept of the Legal Policy of the Republic of Kazakhstan until 2030, approved by Decree of the President of the Republic of Kazakhstan dated October 15, 2021 No. 674, note the need to revise the design of the law of operational management and the law of economic management in modern relations and to find ways to improve the functioning of these institutions. In this regard, in the Kazakh scientific doctrine, in order to reform the legal regime of property rights of state-owned enterprises, the concept of introducing the institute of legal entities of public law into civil legislation is discussed. As M.K. Suleimenov notes, the essence of the Concept is to deprive all state bodies that are currently legal entities in the organizational and legal form of a state institution on the right of operational management of the rights of a legal entity. For their maintenance and functioning in the field of civil turnover, it is proposed to create special organizations to perform state functions with the granting of rights to legal entities of public law <11>.

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<11> See: Suleimenov M.K. Modernization of the civil legislation of the Republic of Kazakhstan.

 

In comparison with Russian law, Kazakh law does not provide for corporations as an organizational form of a legal entity, but operates with concepts such as "transnational corporation", "state corporation" and "socio-entrepreneurial corporation".

For example, in subsection 1 of Article 1 of the Law of the Republic of Kazakhstan dated April 15, 2013 No. 88-V "On Public Services", the State Corporation "Government for Citizens" is defined as a legal entity established by decision of the Government of the Republic of Kazakhstan to provide public services, services of quasi-public sector entities and issue their results to the service recipient on the principle of "one windows", ensuring the provision of public services in electronic form and carrying out state registration of rights to immovable property at its location, etc. Of particular interest is the fact that this State Corporation is a non-profit joint-stock company, the sole shareholder of which is the Government of the Republic of Kazakhstan, which bears subsidiary responsibility for its obligations <12>.

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<12> See: Law of the Republic of Kazakhstan dated May 13, 2003 No. 415-II "On Joint-Stock Companies".

 

For Russian law, non-profit joint-stock companies (hereinafter referred to as NAO) are an unusual and even controversial form of corporation in their expediency. It is fair to note that the expediency of their existence is the subject of criticism in the Kazakh scientific literature. There is an opinion that the commercial orientation of the founders' actions when creating an NAO may be expressed in an increase in the value of its assets. After all, all income allowed to receive from the provision of paid services can be directed to improving and ensuring the appropriate process (purchase of literature, equipment, machinery, real estate, repair of property, etc.), which increases the value of the assets of this legal entity and, accordingly, the book value of its shares <13>. At the same time, the interest of the state shareholder in this case cannot be called private in any way.

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<13> See: Klimkin S.I. Features of the legal status of non-profit joint-stock companies.

 

At the moment, more than 600 NAO have been created in Kazakhstan: the Insurance Benefit Guarantee Fund, the Central Depository, a Credit Bureau with state participation (100% of the voting shares of which belong to the National Bank of the Republic of Kazakhstan), the Unified Accumulative Pension Fund, the Social Health Insurance Fund, a number of higher state educational institutions, etc. <14>.

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<14> See: List of registered legal entities, branches and representative offices by regions of the Republic of Kazakhstan.

 

Thus, despite the doctrinal inconsistency of the corporate essence and non-commercial (public) goals, NAO are a very common form of legal entities with state participation.

In contrast to the NAO, there are social and entrepreneurial corporations (hereinafter referred to as SECS), which, despite the priority of the social function, were already created in the form of commercial joint-stock companies. The Concept of creating regional socio-entrepreneurial corporations, approved by the Decree of the Government of the Republic of Kazakhstan dated May 31, 2006 No. 483, became the system document that defined the activities of the SEC in Kazakhstan. The definition of the SEC was later given in paragraphs 2-2 of Article 1 of the Law of the Republic of Kazakhstan dated March 1, 2011. No. 413-IV "On State property": This is a regional development institute in the form of a joint-stock company, created by the decision of local executive bodies of regions, cities of republican significance, the capital, the controlling stake of which belongs to the state, which promotes the development of the region's economy. There is no other special legislative basis for the creation and operation of the SEC, and the draft Law on social and Entrepreneurial Corporations was withdrawn from the Mazhilis by Decree of the Government of the Republic of Kazakhstan dated December 14, 2009 No. 2096.

The first experience of creating a SEC in Kazakhstan was associated with the formation of JSC SEC Saryarka, whose activities were carried out within the framework of the Karaganda region, and the goals were to develop forms of public-private partnership and support non-resource sectors of the state economy in the region. Later, by Decree of the President of the Republic of Kazakhstan dated January 13, 2007 No. 274 "On measures to create and ensure the activities of social and entrepreneurial corporations" by merging with the existing JSC SEC Saryarka, JSC National Company SEC Saryarka was created. The acquisition of the status of a national company expanded the horizons of the corporation's capabilities and significantly strengthened its position in the region. A certain part of the SEC's profit was directed to the social needs of the region, and the commercial effect of its activities was formed through cooperation with regional business structures. An important aspect of the functioning of the SEC was the possibility of preferential obtaining the right to subsurface use and land plots with subsequent transfer of the authorized capital of joint organizations established with private business in accordance with the legislation of the Republic of Kazakhstan in force during this period. Thus, the SEC's profit was formed from the current income of the partnerships in which it was a participant, and the income received by the SEC after the termination of participation in the partnerships by alienating its share to other participants.

The tasks and areas of work of the SEC, originally laid down in the Concept of 2006, were revised and clarified in the Concept of Development of social and entrepreneurial corporations, approved by the Decree of the Government of the Republic of Kazakhstan dated October 31, 2012 N 1382, by establishing performance indicators of the SEC: commercial activities, corporate governance, interaction with external parties. At the same time, the basis for evaluating the effectiveness of the SEC's activities was economic results, and the sole shareholder of the SEC - the local executive body - had to establish a clear system of monitoring and qualitative analysis of financial results. As a result, it became difficult to achieve an annual economic indicator, taking into account the social orientation of projects, as well as support for business initiatives in the region and the creation of new business structures due to the long-term and individuality of the projects being implemented.

Further, a number of legislative changes were made that affected the status of quasi-public sector companies and significantly limited the capabilities of the SEC. The Code of the Republic of Kazakhstan dated December 27, 2017 No. 125-VI of the ZRK "On Subsoil and Subsurface use" excluded the priority of the SEC in obtaining the right to subsurface use, which complicated the further implementation of projects of the public-private partnership of the SEC in the field of subsurface use.

Currently, there is a Comprehensive plan for the development of social and entrepreneurial corporations until 2025, approved by the Decree of the Government of the Republic of Kazakhstan dated August 4, 2021 No. 520, containing a number of areas within which it is planned to improve the activities of the SEC. In particular, it was noted that there is no single definition of the SEC as a regional development institution and, in general, an understanding of the goals of such an organization, which has mixed two contradictory entities: social and commercial. According to the letter of the Prime Minister of the Republic of Kazakhstan dated December 8, 2022. No. 11-11/5818dz assumes the transformation of the SEC into a regional development institute in the form of a non-profit joint-stock company (as a more familiar form of legal entity for Kazakhstan).

Analyzing the practice of the Republic of Kazakhstan in the modern economic reality, burdened by sanctions restrictions, it can be concluded that for the Russian Federation, the introduction of similar state support for business entities with state participation operating in strategic and other significant socio-economic spheres could ensure the solution of many tasks of state policy provided for by the current Strategy of Economic Security of the Russian Federation for the period up to 2030 <15>. The relevance of this conclusion is supported by Rosstat data, according to which 2022, distinguished by increased economic sanctions, only two thirds of Russian business entities with state participation ended with a profit, while in general their income decreased by 52% <16>. Therefore, for example, the legal provision of land-use benefits or other similar preferences for Russian resource or transport organizations with state participation (depending on the field of activity) would simplify the achievement of financial results that would have an economic effect not only for the state, but also for society as a whole. Unfortunately, the Russian legislator does not consider the timely regulatory consolidation of such measures, traditionally focusing on supporting small and medium-sized businesses (this is reflected in the priorities of the Economic Security Strategy of the Russian Federation). Nevertheless, at the moment, the introduction of measures of state support for commercial business companies with state participation can be considered more relevant than ever.

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<15> Approved. By Decree of the President of the Russian Federation No. 208 dated May 13, 2017.

<16> See: Manukiyan E. The profits of state-owned companies in 2022 fell more than those of private companies // Rossiyskaya Gazeta. 2023. May 10th.

 

China. The status of a legal entity in this country was consolidated after the adoption in 1986 of the consolidated document "General Provisions of Civil Law of the People's Republic of China" <17>. The consolidation of the concept of a legal entity as an organization in the legislation of the People's Republic of China was substantially and conceptually similar to the Russian approach, since the Chinese legal system is based, as is known, on Romano-German law (although taking into account socialist specifics). Therefore, the set of organizational and legal forms of legal entities in the People's Republic of China began to form with enterprises and institutions (known to Russian practice) based on state and collective ownership. At the same time, the organizations of the People's Republic of China were initially endowed with special legal capacity, since the scope of their activities was strictly limited in the constituent documents.

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<17> Adopted at the 4th session of the National People's Congress of the Sixth convocation on April 12, 1986.

 

In the future, the institution of a legal entity continued to develop with the adoption on December 29, 1993 of the Law of the People's Republic of China "On Companies", which consolidated new organizational and legal forms of commercial legal entities: limited liability companies and joint-stock companies with limited liability. In fact, this Law made it possible for private entities to conduct business, and also created the beginnings of corporate rights for company participants who enjoyed "ownership of income from property, the right to participate in solving the main issues of the company's activities, the right to choose persons leading the company's activities, and other rights" (Article 4 of the Law of the People's Republic of China "On companies"). But at the same time, the content of this Law did not imply that the state would be involved in the development of a socialist market economy through the above-mentioned organizational and legal forms, but rather aimed at expanding the opportunities of private entities in the business sphere.

Interestingly, the issue of regulating the property sphere of activity of legal entities with state participation was postponed until March 16, 2007, when, as part of the transformation of civil legislation (the "three steps" program) The Law of the People's Republic of China "On Property Rights" was developed and entered into force. In his art . 55 and 67 it was established that State-funded enterprises in the form of the above-mentioned companies and joint-stock companies with limited liability on behalf of the State perform capital contribution duties and enjoy investor rights (including corporate rights) in accordance with current legislation and by-laws.

According to A.A. Meshcheryakova, as a result, limited liability companies were allocated, "created exclusively with public funds... on the basis of independent investments by state-authorized investment bodies and departments," while the meaning of creating these organizations was to delegate to them the right to produce "specific products established by the State Council, or to operate in specially designated areas" <18>.

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<18> Meshcheryakova A.A. Features of the legal status of legal entities in China // Bulletin of the Chita State University. 2011. N 2. P. 56.

 

In parallel with these companies, state-owned industrial enterprises of public ownership were distributed in China, the status of which (similar to Russian state unitary enterprises) was fixed by the relevant Law <19>. The property was provided to Chinese enterprises on the basis of the right of economic management, and this was how they differed from companies that, in fact, had a corporate nature. In addition, it was not about the investment activity of enterprises.

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<19> See: The Law of the People's Republic of China dated April 13, 1986 "On an industrial enterprise of public ownership".

 

In March 2017, at the fifth session of the National People's Congress of the 12th convocation, the Foundations of the Civil Legislation of the People's Republic of China (which in some translations are referred to as the "General Part of the Civil Law of the People's Republic of China") were adopted, initially positioned as the first part of the future Civil Code of the People's Republic of China <20>, as a result of which the classification of organizational and legal forms radically changed changed. The new law revived the approach of Roman law, and the following legal entities were identified: commercial, non-commercial and special. Special persons, according to H. Wang, was "a new type of legal entities in Chinese civil law (including institutions as legal entities, rural collective economic organizations, urban collective economic organizations, urban committee, rural population committee, etc.)" <21>. Thus, the previously existing types of organizational and legal forms of legal entities are a thing of the past.

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<20> For more information, see: Yerbakhaev E.A. New Basic Provisions of the Civil law of the People's Republic of China // Bulletin of St. Petersburg University. Right. 2019. Vol. 10. N 2. pp. 390 - 403.

<21> Wang H. The Law "General Part of the Civil Law of the People's Republic of China" and the development of Chinese civil law // Bulletin of St. Petersburg University. Right. 2018. Vol. 9. N 3.

 

But the "General part of the Civil Law of the People's Republic of China" did not last long, since on May 28, 2020 The National People's Congress adopted and on January 1, 2021, the first Civil Code in the history of the People's Republic of China came into force, completing the long process of transformation of the organizational and legal forms of legal entities considered in the context of this study <22>. The list of previously named "special" legal entities now includes state bodies, primary self-government organizations, etc. In this matter, the Chinese legislator bypassed the Russian one, since there is no clear definition in the legislation of the Russian Federation regarding the status of a state body as a legal entity (as already mentioned). Nevertheless, this topic has been popular in the discussions of civilists (and not only) for more than ten years <23>.

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<22> See: Alekseenko A.P. Characteristic features of the Civil Code of the People's Republic of China // Actual problems of Russian law. 2021. N 12 (133).

<23> See, for example: Kurbatov A.Ya. Decree. op.; Uskov O.Yu. Legal entities of public law: concepts and types // Journal of Russian Law. 2010. N 6 (162); Kuznetsov S. Category "legal entity of public law" in Russian jurisprudence // State service. 2014. N 6 (92).

 

Thus, the following conclusions can be drawn regarding the registration of state participation in modern civil turnover.

1. There is no prospect of abandoning the use of organizational and legal forms of unitary enterprises, despite their dubious "commercial" purpose. This form allows the state to manage the transferred property in a simplified manner (without using corporate procedures) for certain public purposes, ensuring the performance of state functions.

2. The use of corporate forms of commercial and non-commercial legal entities is a common practice both in Russia and abroad. Nevertheless, the effectiveness and efficiency of their activities depends on proper government regulation, taking into account the specifics of the establishment and functioning of organizations in such forms.

3. Commercial business companies with state participation in modern Russian realities remain the preferred form of organizations, but they need additional regulation of the mechanism of formation of will and expression of will, as well as responsibility on the part of the state for decisions taken in the corporation.

4. The foreign practice of using legal entities in the organizational and legal forms of commercial business companies with state participation to solve certain socio-economic issues is of interest.

5. In the current conditions of sanctions pressure on the country's economy, it is necessary to expand measures of state support for commercial business companies with state participation operating in strategic and key socio-economic spheres, for example, in matters of granting land use rights on simplified terms.

6. The current state of legal regulation of the participation of the state as a public entity in civil turnover should be considered unstable, since the varieties of organizational and legal forms both in Russia and abroad are characterized by inconsistency of legal nature and lack of optimal regulatory mechanisms.