Russian Company Law is part of the Civil Law and the Civil Code of the Russian Federation is at the base of both Civil and Company Law. The Company Law makes a difference between commercial businesses and non-commercial ones. The most important commercial entities are the joint stock companies, the limited liability companies and the partnerships.
Our lawyers in Russia can offer more information the Commercial Law.
Companies in Russia fall under the Commercial and the Company Law. These are further divided into several sub-chapters. The Commercial Code is made up of:
The Russian Company Law is made up of:
As seen above, the Company Law is the one providing for the types of companies which can be registered in Russia. Foreign investors should also know that in 2016 the Contract Law which is comprised in the Company Law was amended.
The Russian limited liability company is required to have a maximum number of 50 members and 50% of its capital must be paid before the company is registered. The capital of a limited liability company is made up of participation interests that, according to the Russian Company Law, cannot be considered securities and they cannot be publicly traded.
Their values can be unequal and offer their holders the rights to vote. The members of a limited liability company in Russia may be subject to obligations that will exceed the value or the size of their participation interests. Also, the members of Russian limited liability companies have preemption rights that will possibly forbid the transfer of interests to third parties.
If you need more information about how you can open this type of company, you may contact our law firm in Russia.
There are two types of joint stock companies in Russia: private and open or public. The difference between the two types is that in an open joint stock company the shares can be transferable to third parties, while in the private joint stock company shares cannot be transferred directly due to the shareholders’ preemption rights.
To incorporate a public joint stock company, the shareholders must bring a minimum of 1,000 monthly wages and it is allowed for this type of company to have unlimited number of shareholders. For the private joint stock company, the minimum capital share is set at 100 monthly wages and it can have up to 50 shareholders. For both types of companies the Russian law treats the shares as securities, therefore securities market regulations are applied to joint stock companies.
Russian Civil Law considers partnerships separate legal entities. Partners are totally liable for partnership obligations. This is the main reason partnerships are not very popular in Russia. Also, Russian partnerships do not beneficiate from any tax deductions.
Foreign companies are allowed to open representative offices in Russia that will normally not engage in commercial activities, even if the Russian Civil Law does not specifically interdict carrying such activities.
Representative offices will be considered separate legal entities and taxed depending on the activities they carry in Russia. Representative offices are required to register with both regional and state tax authorities.
The first step to open a company in Russia is to prepare the incorporation documents: the Memorandum and Articles of Association. These must be filed with the Trade Register in Russia together with the details of the companies’ shareholders and directors. After the company is registered, the owners or their representatives must open the corporate bank account where the share capital will be deposited. Then the company must register with the tax authorities. It should be noted that depending on the activity the company will undertake, special licenses could be required. These must be obtained with the relevel authorities in Russia.
Our Russian lawyers provide you valuable information about opening a business in this country.
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