On 07 March 2013 Government’s decree No. 317-r (hereinafter “Decree”) adopted schedule of measures on “Optimizing legal entities and sole entrepreneurs’ registration procedures in Russia” (hereinafter “Road map”).
Road map concept aims at reducing time and cost expenditures of the applicant during the course of incorporation procedures, expanding possibilities of using e-document management as well as developing interaction of state authorities at registration stages.
Elimination of necessity of 50% authorized share capital payment prior to legal entity’s registration is one of the most significant initiatives of the Road map, scheduled on August 2013. Instead of this requirement, incorporators would be obliged to pay the whole share capital amount within two months since the date of company registration.
Introduction of template charters is scheduled for December 2013. Forms of mentioned charters will be elaborated and adopted by federal executive bodies. In case of implementation of said initiative the applicant may opt not to submit the charter within the package of documents for registration. In this case the resolution on company establishment shall include decision to use the template charter for the company. Decrease of documents package for registration will therefore lead to reducing risks of registration denial due to technical mistakes in submitted documents. It is also planned to establish by December 2014 a procedure of preliminary revision by the registration authorities of correct filling and completeness of incorporation documents.
The Road map stipulates for abolishment by July 2013 of necessity of notary verification of applicant’s signature in registration form provided the documents are submitted by the applicant in person. This should positively lower costs of registration, however might cause increase of number of so called “fly by night companies” since identification of signatory will be complicated. Registration authorities’ liability for applicant’s identification is not yet stipulated.
Another novelty of the Road map planned by December 2014 is establishment of institution of “registration agents”, authorized to accept from applicants and transfer to registration authorities incorporation documents, as well as entitled to identify the incorporator(s). According to the Road map registration agents will be liable for provision with registering authorities of non-trustworthy information as well as non-submission or untimely submission of necessary data.
Another initiative of the Road map is aimed at reduction of terms of interdepartmental interaction between the tax authorities and state non-budgetary funds (till 4 working days in 2013, till 2 working days – in 2018), as well as on phase-by-phase plan of decreasing registration terms with non-budgetary funds (till 3 days - in 2013, till 1 day - in 2018). Currently company’s registration and record with non-budgetary funds takes approximately two weeks since the date of registration and assigning State registration number to legal entity.
The benchmark of the schedule of measures adopted by the Decree is reduction of registration terms of legal entities and sole entrepreneurs to five working days and diminishing registration costs to 4 000 RUB by 2018. The goal of Road map implementation is reaching of top 20 countries of Doing Business rating of the Worldwide bank for legal entities registration feature by the Russian Federation. Russia currently ranks 112 place in the mentioned rating.
It should be specifically noted that the Road map adopted by the Decree is a schematic general plan of measures and steps on optimizing registration procedures and does not contain details on separate phases realization. Therefore in order to give effect to initiatives and concepts of the Road map substantial enhancement of statutory basis in this area will be required. Successful implementation of the Road map might lead to significant modification of legal entities’ and sole entrepreneurs’ registration procedure already by the second half of 2013.