Integrated Structures of Corporations: Ukrainian Legal Reality

The article is devoted to the study of legal nature of the mechanism for association of legal entities. Such associations of legal entities are realized in order to attract not only capital and other production resources, including labor, but also in order to satisfy nonproperty interests. Legal capacity of legal entities in the process of their merger is analyzed, based on what – statutory or contractual – association of corporations is determined. The statutory association does not lead to the creation of another fiction other than a legal entity, due to which it is ensured through its inherent organizational legal forms. The contractual association does not require the formation of a new legal entity (concern, consortium, association (union), syndicate, conglomerate, cartel, pool). In the event of such consolidation of legal entities, the contractual structure of a simple company or other joint activity is formed, formally close to such person at law as a legal entity. The difference between the above procedure of merging from the first option lies in the degree of autonomy of the members from each other, as well as in the expected result of such merger.


Introduction
The nature of a legal entity has an integral component. Legal aspect of this issue is the theoretical modeling of a structure, which includes certain personalized characteristics of an individual, its corresponding statutory fixation. It is known that the development of this fiction is due to the needs of concentration of individuals' capital, the synthesis of their interests. The process of capital accumulation as a result of social production objectively leads to its economic migration, the forms of which are various kinds of investment.
Back in the day, A.V. Venediktov noted in his work "Merger of Joint Stock Companies" that the concentration of capital and production, combination of specific stages of the production process and desire for a monopoly position in the market are the main trends of modern economic development, and business associations; this is one of the main methods of trade and industry where these trends are represented (Venediktov, 2004, p. 70).
There is no doubt that one of the main problems in activities of any enterprise is the problem of resource provision of its solvency, effective management of which involves their rational formation, distribution and use. Various legal forms of their association are one of the means of using the attracted capital of enterprises, which is facilitated by the structure of associated legal entities. Such associations of legal entities are carried out not only to attract capital and other productive resources, including labor, but also to satisfy nonproperty interests. Such integration processes require detailed legal regulation, which is impossible without thorough theoretical development.
Legal aspects of the creation and operation of contractual associations of legal entities was the research issue of many scholars, including Beitsun I. V., Vinnyk O. M., Dzhurynskyi V. O. Yurkevych Yu. M, Shcherbyna V. S., as well as Vasylieva V. A., Kuznetsov O. A., Lomakyn D. V., Sishchuk L. V. and other civil law scholars. The direction of their research is centered around the functional analysis of their economic activities.
Given the above, the purpose of this scientific publication is to determine the nature of association of legal entities as a way to organize their activities and provide a description of the main forms of integration in civil circulation.
Main part. The ability of legal entities to associate is determined by their legal personality. In the process of association, the capital and interests of legal entities are consolidated. However, the result of such association of legal entities does not affect their own legal status and does not distort their legal identity.
The statutory nature of association of legal entities. As a result of such association of legal entities, a new legal structure is not created, neither is a new legal phenomenon of a person at law, which would contain significant differences from those already known. In turn, transformation of the individuality of a legal entity leads only to the creation of another legal entity. Which means that an individual can create a fiction of himself/herself (a legal entity). In fact, a legal entity is not able to create a fiction of itself. If necessary, a legal entity creates only an already known fiction -another legal entity.
Thus, the result of association of legal entities is ensured by creating a new legal entity. Its functioning in civil circulation is ensured through well-known legal forms of corporations. As a result of association of legal entities, neither their organizational structure, nor the structure of the legal entity being created is deformed. The relevant association of legal entities, in accordance with the grounds for its occurrence, receives a statutory form of consolidation, regardless of the founders involved.
The contractual nature of association of legal entities. On the other hand, the process of consolidation of legal entities may not be followed by the creation of a new legal entity. In the event of such consolidation of legal entities, a contractual structure of simple partnership or other joint activity is formed, conditionally similar to such person at law as a legal entity. The difference between the above procedure of association and the first option is the degree of independence of the members from each other, as well as the legal outcome of such association. A legal entity, which is a member of the association, transfers a limited amount of its rights and powers in favor of such legal structure. Herewith, this limitation does not affect the overall purpose of the concentration of capital or interests of the members of corresponding association. But at the same time, each member of the association maintains its own organizational unity, property separation and independence of participation in civil circulation. Therefore, in the absence of signs of corporate governance, such association of legal entities has a contractual form of consolidation. The specified difference is also a criterion for the type classification of associations of legal entities depending on the order of creation.
In addition, due to the differentiated nature of their activities, associations of legal entities have not only the entrepreneurial component. The purpose of association of legal entities is also to ensure the common interest deprived of commercial component. Thus, associations of legal entities can be entrepreneurial or nonentrepreneurial.
Civil law of Ukraine (Article 1130 of the Civil Code of Ukraine) explicitly provides that, under a joint operation agreement, the parties (members) undertake to act jointly without creating a legal entity to achieve a certain goal based on pooling contributions of participants (simple partnership) or without pooling of members' contributions.
The intention to achieve the goal of a nonprofit association of legal entities is a manifestation of the noncommercial nature of such association.
Other approaches to determining the nature of association of legal entities. It should be noted that to some extent the stated legal category of "more complex" structure of legal entities is currently defined by the Commercial Code of Ukraine.
According to Article 118 of this legal act, an association of enterprises should be understood as a business unit formed of two or more enterprises in order to coordinate their production, scientific and other activities to solve common economic and social problems. The unity of opinions of representatives of civil law and commercial law is exhausted at this stage. The vertical of differences is the legal status of associations of legal entities. According to commercial law scholars, a business association is a legal entity. Their creation takes place in the legal form of an association, corporation, consortium, concern.
Thus, one of the academics of the school of commercial law V. O. Džurins'kij defines the legal form of association "… as a set of basic individual characteristics (elements) established by the regulations of the Civil Code of Ukraine, which characterize the business association as a person at law (business entity)". According to the scientist, such signs include: a) the grounds for formation of a business association (founding agreement or resolution of a competent authority), the procedure for its reorganization and liquidation; b) the purpose and property basis of an association; c) the legal status of the members of an association; d) the nature of relationships between an association and its members; e) the structure of governing bodies of an association; f) the legal regime of the property owned by an association; g) the amount of property liability of a business association (Džurins'kij, 2009, p. 10-23).
Therefore, the science of commercial law has developed its own approach to the nature of associations of legal entities, which differs from the proposed. Thus, the existence of economic and legal science is seen along with the established types of legal forms of legal entities and others that are not typical of civil law. They are association, corporation, consortium and concern.
In our opinion, there are no axiomatic theoretical developments for such an approach, that have the appropriate normative consolidation, so they are only hypotheses.
Firstly, the division of associations of legal entities depending on the purpose of their activities has been ignored, preferring the business entities.
Secondly, the nature of building corporate relations within a group of legal entities is an element of deformation of complex structures of legal entities. It is identical to the established types of legal forms of business associations, which leads to a confusion of their identifying features. Thus, the legal forms of association (association, corporation, consortium, concern) enshrined in Article 120 of the Commercial Code of Ukraine lack the structural certainty that is characteristic of the corporate governance system.
In this context, the provision of Part 5, Article 122 of the Commercial Code of Ukraine is interesting, according to which the management of the current activities of an association may be entrusted to the administration of one of its enterprises (the main enterprise). In this regard, a legitimate question arises: how can two legal entities have a joint executive body? The meaningfulness of such a feature of an association as the presence of separate property should also be noted. There is an incongruity: On the one hand, the association controls the activities of the members, and on the other hand, the participants control the activities of the association. Thus, according to the Commercial Code of Ukraine, the very structure of the "association of enterprises" enshrine internal contradictions, which, as we see, cannot be resolved (Commercial Code of Ukraine, 2003, p. 40).
According to the academics of the school of commercial law, the definition of an association as a unit created for the purpose of constant coordination of economic activities of the enterprises united by centralizing one or more production and management functions is not entirely successful, since this form of the association is not so different from a corporation. V. S. Shcherbina asks the quite right question: if an association is not entitled to interfere in the economic activities of member companies of the corporation, why should it centralize production and management functions? (Commercial Code of Ukraine, 2003, p. 40).
Therefore, we must make sure that the legal forms listed in it are nothing more than a way of organizing of civil relations among their members, which is the structure of a civil law contract, particularly a simple partnership agreement (societas). Using this approach, it should be noted that concern, consortium, association, union and other associations of legal entities are a collective concept, a constructive way of organizing of legal relations among them, the content of which is enshrined in a simple partnership agreement. With this position, we continue the continental legal tradition established in the German law on joint stock companies, according to which an association of legal entities (concern) does not have the status of a legal entity (Bejcun, 2006). Relevant associations of legal entities have a contractual form of consolidation of their activities.
The classification of integrated structures of a corporation. The theory of civil law has developed variable structures of contractual associations of legal entities expressing the organizational and economic component of the model of relations among them. Among them: 1) concern (corporation); 2) consortium; 3) association (union); 4) syndicate; 5) conglomerate (financial and industrial group, alliance); 6) cartel; 7) pool.
Undoubtedly, some of them are a manifestation of anti-competitive concerted actions of such associations of legal entities (cartel, syndicate). At the same time, others are characterized by activities that are within the regulatory standards of economic competition.
The criterion for their classification is the nature of corporate interaction. Such nature is determined by the coordination of relations (consortium, association (union), conglomerate (financial and industrial group, alliance, pool) within a group or their subordination (concern (corporation), cartel, syndicate) relating to the main member in the system of association of legal entities in accordance with the agreement among the parties.
Such coordination is based on the establishment of partnership relations among the members, which retain their full independence in organizing joint activities under the agreement. Thus, soft integrated formations with different target settings are created (Ŝerbina, 2005, p. 113-116).
The implementation of such principle of integration processes as the principle of subordination involves the partial neutralization of some management functions. As a result, participants in the process are deprived of one or another component of complete independence.
The practical importance of this classification is revealed through the definition of the nature of liability of legal entities that are dependent on each other (subordination relations). The dependence of one legal entity on another in making its own management decisions definitely changes the format of responsibility for managerial influence on decision-making. It cannot be of an individualizing nature. The sign of independent liability of a legal entity dependent on another is deformed. The "main" legal entity assumes the liability for subordinate control over the activities of the related legal entity, the responsibility for its decisions.
On the other hand, the criterion for classifying associations of legal entities is the scope of their activities (business (concern (corporation), consortium, conglomerate (financial and industrial group, alliance), pool) or nonentrepreneurial activities of legal entities associations (association (union)).
A cartel is an association of legal entities which, by agreement among the members of such association, forms a single policy for its commercial activities in terms of pricing.
In other words, it is an economic category of concerted actions, which, according to Article 5 of the Law of Ukraine "On Protection of Economic Competition", are the conclusion of any form of agreements by business entities, creating any form of decisions by associations, as well as any other agreed competitive behavior (activity, inaction) of business entities.
It should be noted that such associations of legal entities are prohibited by the antitrust laws of Ukraine and the EU. In particular, the activity of a cartel contradicts Articles 101 and 102 of the Treaty on the Functioning of the European Union and belongs to organized crime (Zaharčenko, 2004).
A syndicate has a form similar to a cartel. It is specified exclusively by the organization of centralized sales of products of legal entities that are members of such association. Thus, it is a type of concerted action that pursues the goal of dividing markets or sources of supply on a territorial basis, range of goods, volume of their sale or purchase, scope of sellers, purchasers or consumers or other characteristics.
The concern is an association of legal entities, for which it is typical to maintain the legal and economic independence of the members, but with the coordination of the dominant member. Such concentration is based not only on financial resources, but also on the centralization of functions of scientific, technical and industrial procedure, the integration of management and organizational relations of the members of such association. Thus, the concern is characterized by the subordination of relations in the structure of association of legal entities.
Unlike the concern, the consortium is a form of capital pooling (banking, industrial) for the purpose of joint implementation of an investment project in terms of coordination of the activities of membrs of such associations of legal entities.
The structure of relations in the conglomerate is based on the same principles of organization of legal entities association. However, unlike the consortium as a form of pooling of capital, the conglomerate is characterized by a combination of production, scientific, technical, investment and financial activities, which is similar to the concern. That is, the conglomerate is a variable form of association of legal entities, for which the coordination of production and other activities not focused on one sector of the economy is important.
Finally, the pool as an association of legal entities is characterized by the fact that the profits and expenses of each member from joint production and other activities go to the general fund and are distributed among them in accordance with a predetermined proportion.
Nonprofit associations of legal entities include an association (union). The association is a voluntary association of legal entities to achieve a common goal on the basis of mutually beneficial cooperation while maintaining the self-sufficiency, legal and property independence of its members. Such association should not carry out business activities, its existence is ensured by purpose.

Conclusions
1. Despite the consistency of the basic principles of implementation of integration processes, each model has its own characteristics, which is explained, in our opinion, primarily by the specifics of the approach to economic activity in general. 2. As can be seen from the theoretical research, integration processes are diverse in the level of their organization, target orientation and a number of other features that require some arrangement in order to further research. 3. As a result of implementation of the integration process, contractual relations are established among its members, i.e. a certain structure is formed, which we will call integrated. It is important that such integrated structure does not create fiction other than developed in the theory of civil law (legal entity). It is based on an agreement. 4. The theory of civil law has developed variable structures of contractual associations of legal entities expressing the organizational and economic component of the model of relations among them. Among them: 1) concern (corporation); 2) consortium; 3) association (union); 4) syndicate; 5) conglomerate (financial and industrial group, alliance); 6) cartel; 7) pool. 5. Integration of legal entities through the mechanism of creation of a legal entity is realized through established legal forms (joint-stock company, LLC, ALC, limited partnership, general partnership, NPO etc). 6. It seems that a promising area of research on this issue is to determine the structure of corporate governance of the respective contractual associations. With regard to statutory associations, legal mechanisms for the acquisition and merger of legal entities are of interest.

Integrated Structures of Corporations: Ukrainian Legal Reality
Anatoliy Kostruba (Vilnius University) S u m m a r y The nature of a legal entity has an integral component. Legal aspect of this issue is the theoretical modeling of a structure, which includes certain personalized characteristics of an individual, its corresponding statutory fixation. It is known that the development of this fiction is due to the needs of concentration of individuals' capital, the synthesis of their interests.
The process of capital accumulation as a result of social production objectively leads to its economic migration, the forms of which are various kinds of investment. The ability to associate legal entities is determined by their legal personality. In the process of association, the capital and interests of legal entities are consolidated. However, the result of such association of legal entities does not affect their own legal status and does not distort their legal identity.
As a result of such association of legal entities, a new legal structure is not created, neither a new legal phenomenon of a person at law, which would contain significant differences from those already known. In turn, transformation of the individuality of a legal entity leads only to the creation of another legal entity. Which means that an individual can create a fiction of himself/herself (a legal entity). In fact, a legal entity is not able to create a fiction of itself. If necessary, a legal entity creates only an already known fiction -another legal entity.
Thus, the result of association of legal entities is ensured by creating a new legal entity. Its functioning in civil circulation is ensured through well-known legal forms of corporations. As a result of association of legal entities, neither their organizational structure, nor the structure of the legal entity being created is deformed. The relevant association of legal entities, in accordance with the grounds for its occurrence, receives a statutory form of consolidation, regardless of the founders involved.
On the other hand, the process of consolidation of legal entities may not be followed by the creation of a new legal entity. In the event of such consolidation of legal entities, a contractual structure of simple partnership or other joint activity is formed, conditionally similar to such person at law as a legal entity. The difference between the above procedure of association and the first option is the degree of independence of the members from each other, as well as the legal outcome of such association. A legal entity, which is a member of the association, transfers a limited amount of its rights and powers in favor of such legal structure. Herewith, this limitation does not affect the overall purpose of the concentration of capital or interests of the members of corresponding association. But at the same time, each member of the association maintains its own organizational unity, property separation and independence of participation in civil circulation. Therefore, in the absence of signs of corporate governance, such association of legal entities has a contractual form of consolidation. The specified difference is also a criterion for the type classification of associations of legal entities depending on the order of creation.
In addition, due to the differentiated nature of their activities, associations of legal entities have not only the entrepreneurial component. The purpose of association of legal entities is also to ensure the common interest deprived of commercial component. Thus, associations of legal entities can be entrepreneurial or nonentrepreneurial.
The theory of civil law has developed variable structures of contractual associations of legal entities expressing the organizational and economic component of the model of relations among them. Among them: 1) concern (corporation); 2) consortium; 3) association (union); 4) syndicate; 5) conglomerate (financial and industrial group, alliance); 6) cartel; 7) pool.
After graduating Tavriya National University named after V. I. Vernadsky in 2000, professor Anatoliy Kostruba tied his professional future in higher education, going from assistant to professor of civil law, from candidate to Doctor of Law. From 2015 he is a professor of Vasyl Stefanyk Pricarpathian National University. As a member of the National Bar Association of Ukraine, he has a significant experience in the field of applied jurisprudence. Because of his earnest legal practice and strong academic interests, Anatoliy Kostruba understands the importance of legal exploration in International Private Law and has developed the capacity at the University to joint multi-country research on Comparative Civil Law. Specifically, the goal with his scientific interests is to implement EU directives in case of law of Company and Business law. The research area of Anatoliy Kostruba includes aspects of both corporative law and law of contract, arbitration, litigation as well as general issues of private law.