The forms of and the requirements for the documents to be filed for the state registration have changed

Pepeliaev Group advises that Order No. ED-7-14/617@ of the Russian Federal Tax Service (the “Federal Tax Service”) dated 31 August 2020 has approved new forms of and requirements for drawing up the documents to be filed with the registration authority for the state registration of legal entities, individual entrepreneurs and farm businesses.

The document will take effect on 25 November 2020. However, preparations for the changes should be made in advance.

It is important to remember that at present the forms are being applied that were approved by the Federal Tax Service as far back as in 2012 ^[[1]^] and updating them is an issue that is long overdue. The need for updating the forms is grounded in significant amendments to Federal Law No. 129-FZ “On the state registration of legal entities and individual entrepreneurs” dated 8 August 2001 (the “Law on State Registration”) and in the provisions of the Russian Civil Code (the “Civil Code”) regulating corporate relationships having been reformed.

The most significant changes concerning legal entities

The changes have primarily been made to the structure and volume of the data to be filed with the registration authority. Please take into account that:

1. If a company’s constituent document authorises several persons acting jointly or independently, to act on the company’s behalf, the information in this respect should be specified in the relevant sections of the forms (for example, in clause 9 of form No. R11001, clause 10(1) of form No. R12016, clause 3 of form No. R13014 and clause 9 of form No. R18002).

In the Civil Code the relevant provisions appeared within the framework of the corporate law reform as far back as in 2014 [[2]] (the so-called principle of “two keys”). The Law on State registration (article 5(1)(m) has been amended in a similar way and the amendments took effect on 1 September 2020. [[3]] However, the procedure for filing an application does not directly provide for disclosing the powers of each of the persons authorised to act on the company’s behalf.

2. The data as to whether there is a corporate agreement concluded by the members of a business entity (a joint stock company or a limited liability company) will also have to be disclosed in the documents filed with the registration authority (for example, in clause 10 of form No. R11001 and clause 11(1) of form No. R12016).

If there is a corporate agreement that determines the scope of powers of a company's members disproportionally to their membership interests in the issued capital, the applicant will need to additionally specify in the text field of the application form the data regarding the scope of the legal powers of the company’s member for which the corporate agreement provides (the number of votes attaching to the membership interest of the company’s member disproportionally to the amount of such membership interest).

For example, in the event such data is specified in clause 10 of form No. R11001 “Application for the state registration of a legal entity in the event such legal entity is established” you will need to additionally fill in the text field in clause 4 on Page A by entering the data regarding the scope of powers of an LLC member for which the corporate agreement provides (the number of votes attaching to the membership interest disproportionally to the amount of the membership interest).

Such data were to be contained in the Unified State Register of Legal Entities earlier as well in accordance with article 5(1)(m.1) and article 5(1)(m.2) of the Law on State Registration[4], however there was no possibility to specify such data in the applications for the state registration back then. Now this drawback has been eliminated.

3. The applicant may make a note in the documents filed for the registration that access is limited to, among other things, the following information:

• the information regarding the founder of the legal entity (clause 10 on Page B “Information about the founder who is an individual” of form No. R11001, clause 4 on Page B “Information about the founder which is a Russian Entity, a constituent entity of the Russian Federation, or a municipality” of form No.R11001 and clause 5 on Page D “Information about a unit investment fund whose property includes an interest in the issued capital of the legal entity that is being established” of form No.11001);
• the information regarding the legal succession of the legal entity that is being reorganised (clause 4 “Limiting access to the information about the legal succession of the legal entity that is being reorganised” on Page A “Information about the legal entity that is being reorganised” of section 1 of form No. R12016).

Access may be limited only in the cases set out in Federal Law No. 290-FZ “On international companies and international funds” dated 3 August 2018 and Resolution No. 729 of the Russian Government dated 6 June 2019.

The circumstances that serve as grounds for the limitations should be disclosed in a special section of the application (Page 3 of form No. R11001, Page B of form No. R12003, section 3 of form No.R12016, etc.). For example, a legal entity being subject to the restrictions introduced by a foreign state, or the entity being located in the Republic of Crimea.

4. If a limited liability company acts pursuant to the charter which is one of the 36 template charters approved by Order No. 411 of the Russian Ministry of Economic Development dated 1 August 2018, the number of the form of such charter should be specified in the application (for example, in clause 8 of form No. R11001).

Template charter forms have been applied since 24 June 2019 and the relevant information should be entered into the Unified State Register of Legal Entities (article 5(1)(f) of the Law on State Registration). However, the previous application forms did not provide for entering such information (Letter No. 03-12-13/60357 of the Russian Ministry of Finance dated 9 August 2019).

Other new developments

We have listed only some of the new developments. In addition to them, the amendments also provide as follows:

• The information as to whether the legal entity’s name exists in the languages of the peoples inhabiting the Russian Federation and/or foreign languages should be specified in the application for the state registration of the legal entity. However, the name itself should be specified in Russian and in English. The current application form No. R11001 provides for the name to be specified only in Russian;
• It should be possible to specify the address within the location of the legal entity in more detail;
• A legal entity should be able to submit a notification of reorganisation carried out by means of a combination of various reorganisation forms;
• It should be possible to submit a uniform application form R13014 in the event the company’s constituent document is amended (previously, form R13001) simultaneously with the information in the Unified State Register of Legal Entities which is not related to the amendments to the constituent document (previously, form R14001);
• It should be possible to submit an application for the state registration of an international company or an international fund, including owing to the foreign legal entity changing its personal law under the redomiciliation procedure and state registration under the incorporation procedure (form No. R18002).

Summary table

of state registration forms (for legal entities)

in accordance with the new and the “old” orders

Other updated forms include:

• No. R21001 - application for the state registration of an individual entrepreneur;
• No. R24001 – application for amending the information about the individual entrepreneur in the Unified State Register of Individual Entrepreneurs;
• No. R26001 – application for deregistering an individual entrepreneur;
• No. R24002 - application for entering the information about farm businesses in the Unified State Register of Individual Entrepreneurs;
• No. R26002 - application for terminating the activity of farm businesses.

What to think about and what to do

The entities planning to file documents with the registration authority should take into account the new developments that will take effect on 25 November 2020 and, for the avoidance of the state registration to be denied (articles 23(1)(a), 23(1)(x) and article 9(1.2) of the Law on State registration), file documents in accordance with the new forms.

It is important to remember that article 5 of the Law on State Registration obliges companies to enter in the Unified State Register of Legal Entities the information, including that which the companies now have an opportunity to communicate, for example:

• the name of the company in a foreign language (clause 1(a));
• the information that the company acts based on a template charter (clause 1(f));
• the information that several parties are authorised to act on the legal entity’s behalf without a power of attorney and that such parties act jointly or independently (clause 1(m));
• the information that there is a corporate agreement which provides for the scope of the members’ powers (clause 1(m.1);
• the information that there is a corporate agreement which provides for limitations and conditions for the disposal of membership interests (shares) (clause 1(m.2)).

If companies delay the data to be entered into the Unified State Register of Legal Entities (or if companies do not provide such data), there is a risk that their officers will be subject to administrative liability in the form of a fine of RUB 5,000 to 10,000 (article 14.25(3) and 14.25(4) of the Russian Code of Administrative Offences).

Article 5(5) of the Law on State Registration sets the timeframe for filing such documents with the registration authorities - three business days from the date when the amendments were made as specified in article 5(1) of the Law on State Registration.

The Federal Tax Service’s Order at issue does not provide for any special “transitional” rules as to within what timeframes the information that may be provided to the Unified State Register of Legal Entities with the use of new document forms should be communicated to the registration authority (for example, the information about the corporate agreement that the company has). It cannot be ruled out that the tax authorities will understand the specified amendments in such a way that companies will have to notify the tax authority about the existence of the corporate agreement within 3 days from the effective date of the amendments.

At the same time, the absence in the Unified State Register of Legal Entities of the information for which article 5 of the Law on State Registration provides is often not good for such companies. As far as the information in the Unified State Register of Legal Entities is characterised by public accuracy (article 51 of the Civil Code), the absence in the Unified State Register of Legal Entities, for example, of the information about the corporate agreement that the company’s members had concluded and that limits the disposal of shares, may matter in the event transactions with shares that have been concluded in violation of such a condition of the agreement are contested.

It is likely that the Federal Tax Service will provide further clarifications as was the case with the mass amendments to charters on 1 September 2014.

Help from your adviser

Pepeliaev Group’s experts are ready to offer any necessary advisory support to prepare for the new developments and provide legal support in registration procedures as well as to provide comments on contentious issues relating to the application of legal provisions.