Company Registration Regulations Updated


Legal Update No 817

Bryan Cave Leighton Paisner (Russia) LLP (formerly Goltsblat BLP in Russia) advises that Russian FTS Order No. ED-7-14/617@ dated 31 August 2020 “On Approving Document Forms and Requirements for Submission to the Registration Authority for State Registration of Legal Entities, Sole Traders or Peasant (Farmer) Households” (the FTS Order) came into force on 25 November 2020.

The previous forms were approved in 20121 and then updated somewhat prior to the FTS Order. Over the last eight years, there have been many developments in civil and corporate laws calling for amendments to the Unified Stated Register of Legal Entities (the Companies Register). Yet it was not technically possible to enter the required information into the available forms.

To change this, the FTS Order approved updated document forms and the scope of the information to be entered in the Companies Register is now greater, whereas state registration forms are fewer in number.

Allocation of Terms of Reference Between Several Top Executives

As per Article 53 of the Russian Civil Code, in its constituent document, a company may empower several persons to act for it, either jointly or individually. This information must be included in the Companies Register. According to Russian Supreme Court Plenum Resolution No. 25 dated 23 June 2015 ‘On Courts Applying Certain Provisions of Section I, Part 1 of the Russian Civil Code’, “lack of information in the Companies Register about joint exercise or other allocation of powers implies that they (BCLP notes: the persons acting for the legal entity without power of attorney) act individually and exercise independently the powers relating to all aspects covered by the terms of reference of the relevant corporate body”.

In theory, the previous forms allowed information to be entered in the Companies Register about several persons being authorised to act for the legal entity without power of attorney but it was not clear how the terms of reference were allocated or whether such top executives acted jointly, individually or otherwise.

The updated forms approved by the FTS Order unfortunately resolve only part of this problem. For instance, if several persons are authorised to represent the legal entity, it can now be indicated whether they act:

1.      jointly OR

2.      independently from each other

but it is not possible to explain/comment on the powers allocated to all or each of the company’s top executives.

This restriction prevents legal entities from allocating the powers of the single member executive body between several corporate top executives at their own discretion, meaning they are unable to authorise several corporate top executives to act only jointly on specific aspects of the terms of reference and individually on others, or to determine what decisions a certain top executive may make independently.

Corporate Agreements

As per Article 66 of the Russian Civil Code, powers of non-public company participants that are not proportionate to their interests in the authorised capital may be established by a corporate agreement, provided the corporate agreement and the specific scope of the participants’ powers are recorded in the Companies Register.

The forms used previously lacked the requisite pages/fields for entering details of a corporate agreement between company participants establishing disproportionate scope of their powers. The FTS Order remedied this defect and such data can now be entered in the Companies Register.

Moreover, the updated forms allow the Register to include information about a corporate agreement introducing restrictions and conditions for disposing of interests (without specifying the restrictions themselves).

Please note that the updated forms do not prescribe that the Companies Register cover details of a corporate agreement that does not establish any restrictions or conditions for disposing of interests/shares or contain any clause on disproportionate allocation of powers between company participants. Although such cases are rare in practice, they do occur. So, from the practical point of view, it will be interesting to monitor how corporate agreement-related data will be presented in the Companies Register.

Combination of Various Types of Reorganisation

Article 57 of the Russian Civil Code permits a legal entity to be reorganised by combining different types of reorganisation.

The updated forms include a field for this purpose but do not identify the specific combination of types of reorganisation. As we understand, the registration authority may learn about combined types of reorganisation only from examining the submitted reorganisation decision made by the General Meeting of Participants/Shareholders.

Limited Liability Company Liquidation Timeline

As per Article 57 of the LLC Law2, the term for winding up a limited liability company (the LLC) is established by decision of the relevant corporate body and may not exceed one year. Moreover, if the liquidation cannot be completed within the given timeline, it may be extended by a court by a maximum of six months. The previous forms did not have space for information about the LLC liquidation term whereas the updated forms require this information and allow details to be entered of an extended liquidation term.

Registration of an international company or fund

According to the legislation3, the status of international company or international fund is granted to business entities entered on the Companies Register when a foreign legal entity changes its personal law by redomiciliation4 or incorporation (for international funds only).

The FTS Order approved special form No. P18002 (Application for (Notice of) State Registration of an International Company, International Fund) for state registration of an international company or fund.

Elements of a Legal Entity Address

The FTS Order establishes that any location or address elements in the new forms must be consistent with those in the State Address Register.

Other Data to be Entered in the Companies Register

In addition to the most vital changes listed above, the FTS Order introduced others for unifying the legislation. For instance, the new forms allow the following information to be entered in the Companies Register:

1.      an LLC using model Articles of Association5;

2.      the company having a full and/or abbreviated corporate name in languages of the Russian Federation and/or foreign languages, provided that a corporate name in English must be specified in full;

3.      e-mail address of the company.

Please note that the new forms expressly allow indication that, in cases specified by the legislation, access is restricted to certain Companies Register information about a legal entity, its bodies and participants. These include:

1.      the legal entity is under restrictive measures imposed by a foreign state, state association and/or union and/or government (inter-governmental) agency of a foreign state or state association and/or union;

2.      the legal entity is a credit institution classified as per the legislation as an authorised bank6;

3.      the legal entity is located in the Republic of Crimea or Sevastopol.

1 Russian FTS Order No. MMB-7-6/25@ dated 25 January 2012 “On Approving Document Forms and Requirements for Submission to the Registration Authority for State Registration of Legal Entities, Sole Traders or Peasant (Farmer) Households”.

2 Federal Law No. 14-FZ of 8 February 1998 “On Limited Liability Companies”.

3 Federal Law No. 290-FZ of 3 August 2018 “On International Companies and International Funds”.

4 Redomiciliation implies change by a foreign business entity of its country of state registration and registered address.

5 Please remember that, despite Clause 2, Article 52 of the Russian Civil Code stating that any legal entity is entitled to use model articles of association, the Russian Ministry for Economic Development, by its Order No. 411 dated 1 August 2018 “On Approving Model Articles of Association on the Basis of which Limited Liability Companies May Operate” approved model articles of association only for companies operating as LLC.

6 Federal Law No. 275-FZ of 29 December 2012 “On Defence Procurement”.

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