Normative and organizational novations in registration

Mr. Vitaly Kolesnikov

Head of Registration of taxpayers Directorate of the FTS of Russia

Rio de Janeiro 2014

Until July 1, 2002

After July 1, 2002

over 4,5 thds. registration authoritiesabsence of single registration rulestime needed for registration is 30 days or moreabsence of unified forms of documents proving registration Absence of a single resource dedicated to registered legal entities

registration is conducted by tax authoritiesunified rules for registrationmaximum time needed for registration is 5 working daysunified forms of documents proving registration USRLE has been createddata from USRLE (except for personal data) is available for publica «one stop shop» principle has bee implemented

Creation of Unified State Register of Legal Entities (USRLE)

Federal data Base USRT

(ITN)

Other registry authorities

Russian State Register

Authority for Road Traffic Safety

Information about property owners (land)

Information about vehicles owners

USRLE(information about registration of legal

entities о in tax authorities)2003 год – 1,4 mln. 2013 год – 4,5 mln.

legal entities

Information provided by legal entity (approx. 95% - about separate unit establishing)

Registration of legal entities with tax authorities (foundations)

Reception and registration of

documents (also in

electronic form)

Input of data from

the application

Declining registration or

State registration. Information input to USRLE/USRIE

SENDING THE DOCUMENTS TO THE APPLICANTCertificate, record or decision to decline

DECISION MAKINGwith regard to checks results

Protocol

Business process – Registration of legal entity (5 working-days)

Checking if there are any entries about disqualification with regard to directors (for legal entities)

Verification of commercial names of legal entities

Verifying if the name of legal entity matches with Olympic and

(or) Paralympic symbols

Verification of passport data for individuals(source of information – Federal Migration Service)

Verification of information about notaries who certified the applicants’ signatures

Checking if the documents filed along with application are sufficient and correct

Checking if there is no injunctions for registration

Verification of fidelity of provided information,

including address

Checking if there is no objections of parties of interest

Digital signature

open registries of certificates

to acquire a key and a certificate it is required to

present an ID

certificate can be nullified

There are 91 Certifying centers in 332 cities of Russia accredited in the authorized state body

nullified certificates

Government services portal

Websites of governmental

bodies

FTS of Russia website

Price from 30$

Reporting

State registration services Control

E-Documents

Are stored in registry authority (USRLE)

It is possible to receive copies of documents and information from register in electronic form upon the request

Record sheet

Federal state bodies

Courts

Securities market

Authorized bodies of other countries

Insurance and credit organizations

Electronic trade platforms

Claimants and participants of civil relations

@

@@

@@

@

@

Other authorities

@

Record sheet, certificates

Since 2002 1. Failure to file documents prescribed by the federal law2. Misfiling (filing with a wrong registration authority )3. If USRLE contains an entry that the legal entity is being liquidated______________________________________________________________________________________________________________________________________

Since 2009 4. The filed documents are inconsistent with notarial forms5. An application was signed by an unauthorized person6. If participants withdraw from an LLC leaving no participants therein7. The name of the legal entity is inconsistent with federal law8. The required data is not validated by other authorities taking part in registration procedure

Legally set basis for declining registration

Since July 2013 9. Absence of data registration in authority on transfer of assets at liquidation of unitary enterprise10. The ID information stated in the application is inconsistent with data provided by authorities issuing

such IDs11. The registration authority received written petitions from individuals objecting from making entries

about them into USRLE12. The registration authority receives (before making entry into USRLE) a court or a court bailiff’s act

containing an injunction from registration13. An individual – settler (participant) of a legal entity – is deprived of a right to do business by a court

judgment (for the duration of this judgment)14. If a person with full authority or an individual entrepreneur – governor of a legal entity - is a

disqualified person (for the duration of disqualification)15. The registration authority has hard copy information that the information about address (residence) of

a legal entity is incorrect

Registration upon applicationLimited number of basis for rejecting the registration:

Negative implications of presentation of uncertain (misleading) information when registering

Individual Preventative

Bringing information to unspecified

persons through e-services

In 2013 Number of protocols of bringing to administrative liability - more than 20 thousand

Register of disqualified persons contains information about 1722 persons(including pursuant to Article 14.25 of Administrative Code - disqualified 834 persons)

Criminal liabilityThe Criminal Code of the

Russian Federation

article 170.1.

article 171

article 173.1.

article 173.2.

Administrative liabilityAdministrative Offences

Code of the Russian Federationarticle 14.1.

sub-article 1. fine

article 14.25.

sub-article 3. fine

sub-article 4. fine, disqualifying

Legal entity liquidation

Input in USRLE information about information

uncertainty

Tax Code

Russian Federation

article 116

USRLE Statistics

Limited liability companies- approx. 3,7 millions,+ other forms of legal entity’s incorporation 916,5 thousands:

From all registered legal entities in 145 628 foreign companies or individuals are founders+Registered with tax authorities:12 872 foreign companies (relative to activities through subdivisions, and under another Tax Code provisions)2 187 409 foreign citizens

More than 1300 Mutual investment funds operate all over Russian Federation

other non-profit organizations

(75,6)

Do

ub

le li

ab

ilit

y c

om

pa

nie

s (

1,2

)

Lim

ite

d a

nd

un

lim

ite

d

pa

rtn

ers

hip

s (8

31)

Other commercial enterprises (19,7)

Unitary enterprise

(25,5)

Production co-operative (31,5)

consumer co-operative

(81,2)

Joint stock

companies

(32,2)

State and municipal

organizations (303,3)

companies, registered (214,5)

Limited companies

(131)

271588

8361166

1386

21082471

0

500

1000

1500

2000

2500

01.01.2008 01.01.2009 01.01.2010 01.01.2011 01.01.2012 01.01.2013 01.01.2014

Ways to close a business.Dynamics of taking non-operating legal

entities off the register upon the decisions of tax authorities

*non-operating legal entities –entities that during the year neither file accounting reports with tax authorities nor make transactions on accounts (Article 21.1 of Federal Law “On state registration of legal entities and individual entrepreneurs” dated 08.08.2001 №129-ФЗ

LiquidationBankruptcy

Reorganization

Other grounds

Taking non-operating

legal entities off the USRLE upon the

decisions of tax authorities

thds.

USRLE contentdocuments and information on the legal entity

Originals or notary order copies of constituent documents of the legal entity;

Company Name: in Russian full / short / corporate + one of the languages of the peoples of the Russian Federation and (or) foreign language (if specified

in the constituent documents); TIN / tax registration event code and date of registration with tax authorities; Information on the legal form; Codes of economic activities; Address; Information about the founders (participants); The authorized capital (equity capital, the authorized fund, shares); Information about licenses; Information on branches and representative offices; Methods of formation (termination); Date of registration of changes and information on Succession; Information on registration as an insurer by the Pension fund and the Social security fund; Information about the person having the right, without the power of attorney to act on behalf of

the legal person: name, surname, first name, position, TIN, data of identity document; Information about that entity, a business entity is in the process of reducing its authorized

capital; Information about that entity is in the process of liquidation (reorganization);

In case if there are any changes of the information contained in USRLE, formerly included information remains stored

FTS official web-pageState Registration

Openness principal is a basic value of democracy.This approach implies the creation of transparent mechanisms for governmental bodies operation, and feedback tools which enable the citizens to interact with state authorities

Information about legal entities and individual entrepreneurs, documents for state registration (including state registration of amendments made into articles of incorporation of a legal entity and making changes into USRLE entries on legal entity) thereof have been filed with registration authority/64 618 902

FTS of Russia e-servicesFTS of Russia e-services

Information published in «State Registration Bulletin» magazine on the prospective exclusion of non-operating legal entities from USRLE

Legal entities executive bodies of which include disqualified persons / 1 043 870

Addresses stated as a place of residence by several legal entities / 11 347 369

Information on persons, who refused to participate (be a director) in business during the court trial or in respect to which the court established that fact / 318 801

Information on legal entities that are impossible to communicate with on the address (place of residence) stated by them and entered into the USRLE / 879 058

Information about legal entities included into USRLE (publication) / 585 mln.

Number of calls to a service in 2013

More than 31 thds. attributes of access to USRLE data has been provided via Internet

Messages of legal entities regarding liquidation, reorganization, charter capital reduction, acquisition of 20% charter capital of other company by LLC published in «State Registration Bulletin» magazine, and other messages of legal entities subject to publication in accordance with Russian legislation

It is planned to create NEW services providing information on legal entities which:- do not submit tax returns - have arrears to the budget and - about individuals - mass leaders

(founders)

Open government data – information regarding state and local authorities operations posted in Internet as bulk data in the format providing its automated processing for the purposes of repeated use without manual adjustment (machine readable format) and implying its free (without charge) use

Roadmap «Registration of enterprises optimization»

• reduction of time needed for state registration;• reduction of number of documents filed for registration;• reduction of the number of registration actions requiring notary verification of applicant’s

signature;• increase the share of e-registration;• increase availability of e-services,

including e-means of notifying taxpayers which do not require to visit tax authority personally

Indicator 2011 2012 2013 2014 2015 2017 2018

Position in “Doing business” rating on «Starting a business» indicator

106 105 101 88 70 30 20

Number of procedures 9 9 8 7 5 3 3

Time needed to start a business, working days

30 29 18 15 13 7 5

Cost of starting a business, RUB

6 100 6 100 6100 5 400 4 550 4 200 4 000

Thank you for your attention!