Almost all current elastic-plastic theory is based on the total strain-rate being expressed as the sum of elastic and plastic strain-rates. This assumption and the kinematic model on which it is based are invalid and lead to erroneous conclusions. By defining plastic deformation as the residual deformation after unloading to zero macroscopic stress, the careful separation of elastic and plastic strain-rates is correctly achieved. On this basis the rate (incremental) type constitutive law for time independent material is rigorously established. The law is not restricted to infinitesimal elastic strains, and Prandtl-Reuss equations follow as a special case of this general theory. The presentation and the development of the whole theory is given at the level of modern continuum mechanics, and thus appears now to be formulated in a satisfactory manner.