November, 2017: Provision of incorrect information to the Unified State Register of Legal Entities

Document: Federal Law dated 08.08.2001 N 129-FZ (as amended on 29.07.2017) “On State Registration of Legal Entities and Individual Entrepreneurs” (hereinafter – Law 129-FZ)

Amended by: Federal Law dated 28.12.2016 N 488-FZ (as amended on 29.07.2017) “On making amendments to particular statutory acts of the Russian Federation”

Effective date: September 1, 2017

Description of changes

Based upon clause 5 Article 21.1 Law 129-FZ, since September 1, 2017, the tax authorities shall have the right to exclude a legal entity from the Russian Federation Unified State Register of Legal Entities (hereinafter – the Register), if there is made an entry on the provision of incorrect information with respect to such legal entity (for example, with respect to its address, CEO or participants). Earlier, a legal entity being detected to have violated the legislation, was only subject to compulsory liquidation based upon a court decision.

Applying the changes

A legal entity can be excluded from the Register in six months after the entry on the provision of incorrect information was recorded in the Register. However, during this period, there may be other negative consequences associated with the presence in the Register of an entry on the provision of incorrect information: a legal entity having such a record is regarded by other market participants, including commercial banks and state bodies, as an unreliable counterparty, which may entail the suspension of transactions on existing accounts, closure of such accounts and refusal to open a new bank account, a refusal by the state bodies to register documents; CEO of such a legal entity may be subject to administrative responsibility for providing incorrect information to the Register.

More information about the consequences of providing incorrect information about the legal entity to the Register you can find in the full article below.