Unitary Enterprise

A unitary enterprise (Russian: унитарное предприятие) is a government-owned corporation in Russia and some other post-Soviet states. Unitary enterprises are business entities that have no ownership rights to the assets that they use in their operations. This form is possible only for state and municipal enterprises, which respectively operate state or municipal property. The owners of the property of a unitary enterprise have no responsibility for its operation and vice versa.

Federal Law No. 161-ФЗ "On State and Municipal Unitary Enterprises" (amended July 13, 2015), defines the legal status of unitary enterprises in Russia. The State Duma passed this law on October 11, 2002, and President Putin signed it on November 14, 2002.

The assets of unitary enterprises belong to the federal government, to a Russian federal subject, or to a municipality. A unitary enterprise holds assets under economic management (for both state and municipal unitary enterprises) or under operative management (for state unitary enterprises only), but does not own them. The term "unitary" specifies the assets as indivisible, i.e., they may not be distributed among the participants in any way. A unitary enterprise is independent in economic issues and obliged only to give its profits to the state. Unitary enterprises have no right to set up subsidiaries, but they can, with the owner's consent, open branches and representation offices.

Though government entities own the unitary enterprises, the enterprises themselves work on the basis of commercial accounts and of commercial legislation. They come under ministerial responsibility but are off-budget. They may be auxiliary to a ministry's activity, such as a printing house under the Ministry of Education or a production facility for police equipment under the Ministry of Internal Affairs. Unitary enterprises have a distinct legal status, different from regular market-sector corporations.

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