Startup registration in Russia: putting everything on the shelves

How to register a startup in Russia: legal forms

The most popular legal forms for startups are a limited liability company (LLC) and a joint-stock company (JSC). Theoretically, a startup can be registered as an individual entrepreneur, but this will make it almost impossible to work with investors. In Russian legislation, there is also a form of economic partnership, but it is not popular among entrepreneurs.

The form of ownership in the form of an LLC in Russia allows you to distribute the rights to property in a startup with partners, makes it possible to attract investments by accepting investors as members of an LLC, lets you apply a simplified tax system, and also reduces the property risks of business owners-since the responsibility for the property is already borne by a legal entity. Another option of a limited liability company is the development of a new business through the possibility of creating branches and representative offices. It should be noted that an LLC can be registered at your home address.

A joint-stock company is a more complex form for registering a startup. The JSC has a flexible decision-making procedure, the authorized capital is divided into public or non-public shares, and their release is registered. In contrast to the shares that are in an LLC, shares are securities. Registering a startup as a joint-stock company is more complicated, the home address for the company is not suitable — an office is required, the registration procedure itself is two-stage and takes a total of more than a month.

State registration of legal entities is located in the department of the inspectorate of the Federal Tax Service (FTS), you need to contact the area where the office of the future company will be located.

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LLC is the most common form for registering a legal entity. Here are the documents that you need to register this form of management.

If the LLC has one founder:

• application for registration of a startup in Russia;

• the decision to create an organization;

• articles of association of the company;

• bank receipt for payment of the state fee for the registration of a legal entity (except for the submission of documents for registration in electronic form/through a notary).

If an LLC has several founders, then instead of the decision to create an organization, you will need the minutes of the general meeting of founders and the agreement on the establishment of a commercial organization.

If foreign citizens participate in the creation of a startup, you must provide a translation of their identity documents.

You also need documents confirming the legal address of the LLC. If the place of registration is an flat, the application for registration will need to be accompanied by a copy of the certificate of ownership and a free-form consent of the owner of the premises. You will also need to confirm that the business activity will not violate the interests of other residents. In the opposite case, the FTS inspectorate may refuse to register a startup at its home address.

JSC is the second most common form of legal entity ownership in the Russian Federation. The founders conclude an agreement on the establishment of a joint-stock company, which defines the procedure for the establishment of the company, the amount of the authorized capital, categories and types of shares, their size, and payment procedure.

Documents for the registration of a joint-stock company:

• application for registration;

• decision on the establishment of a joint-stock company;

• JSC charter (two copies);

• receipt of payment of state duty (except for the case when the company is registered in electronic form/through a notary);

• a document that confirms the status of the founder (if it is a foreign organization);

• documents with information about the legal address (lease agreement, letter of guarantee from the owner of the premises, certificate of ownership).

When opening a joint-stock company in the Russian Federation, you will need to register the first issue of shares by the Bank of Russia. Documents for the registration of the first issue of shares are submitted no later than one month from the date of registration of the joint-stock company.

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Russia provides equal rights and obligations for its citizens, foreign citizens and stateless persons. Both an individual and a legal entity can register an LLC. To register an LLC, an individual founder does not need a temporary residence permit or a residence permit. These documents, as well as a work permit, are only needed if the foreigner plans to become a director of the company.

There are several ways to register as a legal entity:

• personally, in the IFNS, you can determine the address of your inspection on the website of the Federal Tax Service;

• through a representative under a notarized power of attorney;

• by registered mail with an inventory of the attachment;

• through the Multifunctional Center for the Provision of State and Municipal Services;

• in electronic form, you can submit documents for registration online through the State Services website, through the website nalog.ru.

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1. The first step is to decide on the name of the company, check whether it does not contradict the law.

2. Decide on the legal address.

3. Select the OKVED codes that describe the activities of the company being created. It is recommended to use a selection of OKVED codes, so as not to miss any code that may be useful in the future.

4. Determine the amount of the authorized capital. The minimum amount for an LLC is ₽10 000, except for some types of businesses.

5. Draw up the decision of the founder or the minutes of the general meeting on the establishment of the LLC.

6. Make the Charter of the LLC.

7. Write an application for registration.

8. Pay the state fee for registering an LLC with a bank, in 2021 it is ₽4 000, if you submit documents to the Federal Tax Service in person.

9. If you plan to pay taxes under the simplified tax system, prepare a notification about the transition to the USN.

10. The final step is to submit the necessary documents to the Federal Tax Service corresponding to the company’s registration address or use another method of registering a legal entity.

If everything is in order with the documents — in three working days, the tax inspectorate will issue a list of entries in the Unified State Register of Legal Entities and one copy of the charter of the organization with a mark of the registering authority.

Congratulations: you are officially a startup!