LLC or ” Limited Liability Company” – what is it? How to register, what rights and obligations exist, as well as features of this form of business?
An LLC is a limited liability company with a share-divided authorized capital, which may include from one to 50 founders.
This form of business involves the ability to engage in any legal type of economic activity (in contrast, for example, to an individual entrepreneur, where a number of restrictions apply). There is also the following advantage: the company’s participants bear the risk of losses related to their activities within the limits of the value of their shares in the authorized capital if the company is not at the stage of bankruptcy.
LLC is regulated by the following regulatory documents:
- The Constitution of the Russian Federation of 12.12.1993 (as amended on 21.07.2014).
- Civil Code of the Russian Federation.
- Tax Code of the Russian Federation.
- Federal law “About limited liability companies” 08 08.02.1998 N 14-FZ.
- Federal law” On state registration of legal entities and individual entrepreneurs ” dated 28.08.2001 No. 129-FZ (as amended on 31.12.2017).
- Federal law “On insolvency (bankruptcy)” from 26.10.2002 № 127-FZ (as amended on 23.04.2018).
- Federal law “On licensing of certain types of activities” dated 04.05.2011 and N 99-FZ (ed. from 31.12.2017).
- Labor Code of the Russian Federation of 30.12.2001 N 197-FZ (Ed. 05 05.02.2018).
What is the procedure for registering an LLC in Russia?
1.Approval of the company name – the full name, in Russian, will be used in all documentation of the LLC, as well as presented on the company seal. Possible to register up to 5 additional short names, including in a foreign language or the language of the nations in the Russian Federation.
2.Registration of a legal address: at the home address, in rented or own non-residential premises.
3.Assignment of activity codes. This is done using the Russian National Classification Types of Economic Activity
OKVED – Russian Classifier of Types of Economic Activity. “OK 029-2014 (kdes Ed. 2). all-Russian classifier of types of economic activity” (approved by the Order of Rosstandart of 31.01.2014 and N 14-St) (ed. of 27.08.2020)
This procedure has the following features:
The company includes 1 main activity code and several (or an unlimited number) additional codes, they are directly related to the right to engage in a particular activity.
All codes must be four-digit
All codes must be entered in the application for registration of a legal entity
Some activities involve obtaining an additional license
4.Choosing a tax system
- -General taxation system
- -The simplified system of taxation
- -Uniform agricultural tax
- -Unified tax on imputed income
Each of the systems assumes that certain conditions are met by the type of activity, number of employees, income level, and other parameters.
For more information about tax systems, see the following article.
5.Payment of state duty
6.Filing an application for registration with the tax service
7.Getting documents about the organization’s registration
8.Opening a current account and depositing the authorized capital
9.Stamp creation, registration in a sales register
Each of the stages involves the fulfilment of certain conditions and requires individual support o of specialists for a particular case.
For consultation on Registration Procedure of LLC in Russia, You can contact the specialists of BRB Ramo at the link.