Family entrepreneurship: towards the formulation of the problem

Chereshneva Irina Junior Scientific Associate, Institute of State and Law of the Russian Academy of Sciences 119019, Russia, g. Moscow, ul. Znamenka, 10 iachereshneva@gmail.com Other publications by this author

1. Modern geopolitical conditions combined with the sanctions regime of Western Europe, the United States and their satellites cause an objective need to search for internal economic mechanisms that can not only offset the consequences of an unprecedented economic impact on Russia, but also act as a support for the further socio-economic development of our country. Due to the fact that "the cultural contexts and institutional mechanisms within which the economic development of the Russian state was carried out (capital accumulation, the emergence of entrepreneurship, the hiring of labor and the organization of production) often had no analogues outside of Russia" ^[1], the appeal to the study of such a legal phenomenon as family entrepreneurship seems justified to us. Its relevance is due to a number of reasons.

Firstly, the socialization of the economy and law, which is understood as "the next stage in the development of a market economy corresponding to a post-industrial society, characteristic primarily of economically developed countries and characterized by social reorientation of production; humanization of people's lives and their work; reduction of social differentiation; further development of the social sphere" ^[2].

Secondly, a broad approach to understanding entrepreneurship, including its social component. As A.V. Bykov rightly pointed out, "The state, since it is proclaimed by the Constitution of the Russian Federation as a social one, has the right and is obliged to assign social functions and the solution of social tasks to entrepreneurial activity (the basic and only social form of organization of economic activity for the production and sale of a commodity product developed by modern civilization)." ^[3].

Thirdly, the development of the idea of social entrepreneurship, which finds its legislative embodiment in some legal systems (as an example, we can point to the so–called Laws on SSE (Social and Solidarity Economy - social and Solidarity economy), in which the idea of "social state - social and solidarity economy - social entrepreneurship" runs through the red thread ^[4]).

Fourth, the consideration of the family as the fundamental basis of Russian society. Thus, the Concept of State Family Policy in the Russian Federation for the period up to 2025, approved by the Decree of the Government of the Russian Federation No. 1618-r dated August 25, 2014 (hereinafter referred to as the Concept), provides for an active role of Russian families in partnership with government, business and the public. In our opinion, it can get the most complete realization precisely within the framework of family entrepreneurship. Due to the latter, it is also supposed to solve one of the tasks of the Concept, which is aimed at developing the economic independence of the family and creating conditions for it to independently solve its social function.

2. The system approach is one of the key methods by which modern science "extracts" new knowledge. In relation to jurisprudence and in the context of this study, this means that the focus of scientists' attention increasingly lies "on establishing intersectoral links between civil, family and business relations." ^[5]. Due to the fact that family entrepreneurship "is in interaction and at the intersection of two legal institutions: family and small business" ^[6], it can be considered as a complex, intersectoral institution, the subject of regulation of which is the norms of family and business law ^[7]. In this regard, the works of representatives of various branches of law are devoted to the study of legal problems of family entrepreneurship ^{[8, 9, 10]}.

At the same time, despite the absence of a legislative definition, the existing doctrinal approaches to the definition of the concept and the legal nature of family entrepreneurship "lift the veil of secrecy" in relation to this legal phenomenon.

Thus, from a sociological point of view, family entrepreneurship is considered as "a socio-institutional form of small business, which is a certain way organized system of economic and labor activity functioning in the process of social relations between relatives or members of the same family, which combines significant social values, expediently oriented standards and norms of behavior that meet the needs of society (region)." ^[11].

The legal view of family entrepreneurship can be presented as follows – it is "independent, initiative, systematic, at their own risk and under their own property responsibility, activity in any legal organizational and legal form carried out by family members not so much for profit as for achieving economic and social results aimed at satisfying property needs and harmonization of family interests in overcoming socio-economic problems." ^[12].

In turn, Professor A.N. Levushkin believes that the basic features of family entrepreneurship, which make it possible to distinguish it from related legal categories, include: 1) family and legal ties that develop between family members - participants of a family enterprise; 2) personal labor participation in the activities of a family enterprise." ^[5].

The analysis of the above positions allows us to note the following.

Firstly, the similarity of institutional forms of family entrepreneurship with small businesses (or in the normative formulation – with small and medium-sized businesses). Thus, family entrepreneurship is embodied in various forms: individual (obtaining the status of an individual entrepreneur by an individual, i.e. carrying out entrepreneurial activity without forming a legal entity) and collective (by creating a legal entity in various organizational and legal forms, for example, in the form of a limited liability company, a peasant farm ^[13], less often - a joint-stock company). The question of attributing such a legal phenomenon as self-employment to family entrepreneurship remains controversial due to the "ambiguous legal qualification of the activities of self-employed citizens" ^[14] per se.

Secondly, the implementation of entrepreneurial activity not only in order to make a profit, but also to achieve a different social useful/positive effect, the latter is understood as "the ability of an economic entity to influence social processes through the successful solution of socially significant tasks by the business community." ^[15]. At the same time, the legally established definition of entrepreneurial activity (Article 2 of the Civil Code of the Russian Federation (Part One) of November 30, 1994 No. 51-FZ) refers exclusively to its economic effect.

Thirdly, the constitutive feature of family entrepreneurship is the family-legal ties that develop between family members; these relationships are of a personal and confidential nature.

Personal labor participation in a family business, although it can serve as a sign of family entrepreneurship, however, such a sign is rather optional. Despite the fact that family entrepreneurship, as a rule, exists in the form of small and medium-sized businesses, major players should not be overlooked (the fashion industry (Etro, Furla, Trussardi) can serve as an illustration), who, for example, can act as investors, but do not take direct part in family entrepreneurship. In this regard, it is family-legal ties that make a family company out of an ordinary company. Thus, this feature allows you to distinguish family entrepreneurship from related legal categories, for example, from small and medium-sized businesses.

Fourth, the axiological component of family entrepreneurship. Values are "spiritual ideas enclosed in concepts that have a high degree of generalization, embodying social ideals and acting as a standard of what is due." ^[16]. Due to the fact that family relations are based on values accepted in society, "the value system of an individual family will consist of the value orientations of each of its members" ^[16], while for the effective functioning of a family enterprise (both literally and figuratively), such values must coincide, otherwise discord is inevitable.

3. One of the trends in the development of entrepreneurial legislation is its differentiation ^[17]. The permanent complication of public relations in combination with the current geopolitical situation and the rapid development of digital technologies "forces" the legislator to shift the focus of his attention from regulating the general legal regime of entrepreneurship to a special (special) legal regime, within which stimulating legal means can get their full implementation. In this regard, the legislator's desire to differentiate the legal regime of entrepreneurship is manifested not only in the specifics of the industry, sphere of activity, features of economic activity in a certain territory (within territories with a special regime of entrepreneurship) ^[18], but also in relation to the "special legal regime of certain categories of entities" ^[17]. The latter category, in particular, includes a special legal regime for the activities of small and medium-sized businesses, the content of which "constitutes a set of statutory features of regulatory legal regulation of the activities of small and medium-sized enterprises in the form of a combination of means of influencing these entities in order to achieve state-defined goals." ^[17].

At the same time, according to Professor I. V. Ershova, within the framework of a special legal regime for the activities of small and medium-sized businesses, "there is a differentiation into the legal regime for the activities of small enterprises and, accordingly, medium-sized enterprises." ^[17]. In this regard, taking into account the trend towards further differentiation of entrepreneurial activity, the "subject" criterion can also be applied to family entrepreneurship, which leads to the need to determine the order of regulation of family entrepreneurship, expressed in a set of legal means, which will mainly be represented by measures of state support (i.e. we are talking about a special (preferential) legal regime). In this regard, a number of questions naturally arise: 1) about the place of the special legal regime of family entrepreneurship in the system of preferential legal regimes; 2) about the need for legislative consolidation of the special legal regime of family entrepreneurship?  To answer them, let us turn to the doctrine.

Thus, Professor A.A. Mokhov points out "the possibility of classifying family entrepreneurship as small." ^[19].  In turn, Professor A.N. Levushkin speaks of the need for "regulatory and legal regulation and support of property family business relations aimed at the organization and implementation of family entrepreneurship, including because they can have a significant impact on the property status not only of the entire family business, but also on the entrepreneurial sphere on a large scale organizations of large capital." ^[5]. In addition, Professor I.V. Ershova justifies that "in the field of family entrepreneurship, a special (ordinary) legal regime of economic activity should be formed by analogy with the special (ordinary) legal regime of the activities of small and medium-sized businesses." ^[20].

It seems to us that there is some variability in the context of considering family entrepreneurship as a special legal regime for the activities of a separate category of subjects.

The first option proceeds from a civilistic understanding of entrepreneurial activity, the main purpose of which is aimed at making a profit. In this scenario, there is no need to single out family entrepreneurship as an independent legal preferential regime for a separate category of subjects or a subspecies of a special (special) legal regime for the activities of small and medium-sized businesses. Due to the fact that the core of this regime are measures of state support, the extension of a wide list of benefits to all the higher categories of subjects can lead to a reduction in "ordinary" entrepreneurship.  In this sense, it is possible to get a situation similar to the one that exists now with respect to residents of territories with a special regime of entrepreneurial activity, where there is competition between the regimes of different territories, and there is also a problem of imitating activities in order to obtain various kinds of preferences.

The second option is characterized by a social understanding of entrepreneurship. As it is rightly noted in the literature, "along with the functions traditional for small entrepreneurship, family entrepreneurship is simultaneously characterized by functions closely related to the demographic and family policy pursued by the state." ^[19]. It is not by chance that the Concept emphasizes that the effectiveness of economic measures is impossible without creating an atmosphere of priority of family and moral values in society, support and comprehensive strengthening of the prestige of the family lifestyle.

From this point of view, it is advisable to consider family entrepreneurship as "a family value and a competently built system of property relationships between family members that brings profit, which needs to preserve this family property value within the family on the basis of special legal regulation by establishing a special regime of family entrepreneurship." ^[5]. Thus, the consideration of the family as the fundamental basis of Russian society, and family entrepreneurship not only as a means to solve the problem of economic independence of the family, but also as a means of implementing the social component of entrepreneurial activity implies the attribution of family entrepreneurship to an independent type of special (special) legal regime of a separate category of business entities.

As a result of the conducted research, we came to the following conclusions.

Firstly, the importance of family entrepreneurship is due to a combination of reasons: 1) the socialization of the economy and law; 2) the social component of entrepreneurial activity; 3) the development of social entrepreneurship; 4) state family policy.

Secondly, family entrepreneurship is a complex intersectoral institution, the subject of regulation of which is the norms of family and business law, and its constitutive feature is the family–legal ties that develop between family members. The distinctive features of family entrepreneurship can also include: 1) the similarity of its institutional forms with small business; 2) the implementation of entrepreneurial activity not only for profit, but also to achieve a different social useful / positive effect; 3) the axiological component of family entrepreneurship.

Thirdly, the consideration of family entrepreneurship as a special (special) legal regime for the activities of a separate category of business entities allows for variability, represented by two directions. The first is civilistic, where there is no need to allocate an independent special (special) legal regime for a separate category of business entities, and the second is social, within which the understanding of family entrepreneurship as a family value leads to its isolation as one of the special (special) legal regimes of a separate category of business entities. The latter option seems preferable to us.

In conclusion, we note that "already in pre-revolutionary Russia there was a legal institution of the merchant family." ^[21], which can be represented by such bright genera as the "Morozovs, Ryabushinskys, Konovalovs, Guchkovs, Soldatenkovs, Khludovs, Krestovnikovs, Tretyakov and Naydenovs" ^[1], who made a significant contribution to the socio-economic the development of our Fatherland through the introduction of advanced technologies for that time based on the cultural and historical features of Russia, and not in opposition to them. The potential of family entrepreneurship is significant, its implementation is not only a private task, but also a public one, due to the fact that the family, as the fundamental basis of Russian society, certainly needs state support, which, in relation to family entrepreneurship, can be developed within the framework of a special legal (preferential) regime of a separate category of business entities. At the same time, in order for such support to be effective and the regime to be really working, it is necessary to clearly verify the combination of legal means that make up the regime (for example, the provision of benefits, first of all, to small and medium–sized family entrepreneurship), then we will be able to achieve not only economic, but also social effects from the implementation of entrepreneurial activities aimed at the common good.

You can simply select and copy link from below text field.