7 fatal mistakes or the most common reasons for refusal to register a business

To register your own business, it is not at all necessary to contact professional registrars. Anyone can independently prepare the necessary documents, even without special legal knowledge. But although the procedure for opening an individual entrepreneur or LLC is quite simple, novice entrepreneurs still make the same annoying mistakes that lead to refusal of registration.

Outdated application forms

Applications for registration of an LLC or individual entrepreneur are submitted on official forms P11001 and P21001. Forms are updated periodically, partially or completely. For example, the latest update of the forms was caused by the transition in July 2016 to OKVED 2, the codes for which are entered into the application.

If you downloaded an application form somewhere on the Internet, then it is not a fact that this form will be relevant on the date of submission of registration documents. Download forms P11001 and P21001 only from reliable sources - the official website of the Federal Tax Service, the Garant and Consultant systems, or from our website database.

The requirements for filling out the application are not met

Completed applications for business registration are processed automatically, which is why the Federal Tax Service has developed multi-page Document Requirements. Among them:

• all letters in the application must be capitalized;
• When filling out on a computer, only Courier New font with a height of 18 points is allowed;
• brackets and the “+” sign when indicating a telephone number are entered in a separate place;
• special rules for abbreviating address objects

Do you know that…

In this case, passport data must be entered exactly as it is indicated in your passport. For example, the word “city” is generally abbreviated to “g”, but in your registration it is written “gor.” This means that this is how you need to enter your address in the application.

Subtleties of registration: grounds for refusal that you don’t know about

There is an opinion that 90% of refusals in state registration of information about the founder (participant) or head of an organization are explained by formal violations of the law on state registration of legal entities. But in 2016, special grounds for refusal were added to it. They are still unknown to most directors and founders. Therefore, refusal of registration, as well as its reasons, may come as a complete surprise to applicants. Nikita Rozhentsov, senior consultant of the Department of Legal Practice of Alliance Legal Consulting Group , will tell you how to choose the right director or founder (participant) of a company

On January 1, 2016, new grounds for refusing to register founders (participants) and managers (persons acting on behalf of a company without a power of attorney) came into effect. Candidates will not be included in the Unified State Register of Legal Entities if their past experience gives reason to doubt their integrity:

– the person was previously a founder/participant of an LLC (with a share of 50% or more in the authorized capital) or the head of a legal entity of a different organizational and legal form, which was excluded from the Unified State Register of Legal Entities as invalid (clause 2 of Article 21.1 of the registration law) and at the same time had debts, including bad ones, to the budget;

– the person is a founder/participant of an LLC (with a share of 50% or more in the authorized capital) or the head of a legal entity of a different organizational and legal form, information about which in the Unified State Register of Legal Entities is marked as unreliable, or there is an unexecuted court decision on the liquidation of the company.

New norms were introduced into paragraph “f” of Art. 23 of the Law “On State Registration of Legal Entities and Individual Entrepreneurs”. These restrictions are valid for three years from the moment the company is excluded from the Unified State Register of Legal Entities or the relevant information is entered into the register.

Restrictions on the founder (participant) or head of the company de facto duplicate the provisions of the Code of Administrative Offenses of the Russian Federation on disqualification (Article 3.11), with the only difference that the administrative penalty in the form of disqualification can only be imposed by a judge.

It is worth noting that the introduced restrictions may apply to cases where the management of a legal entity is carried out by a management company (see Resolution of the Sixth Arbitration Court of Appeal No. 06AP-6644/2016 in case No. A73-9926/2016 dated February 6, 2022) .

"Time bomb"

The logic of the legislator is simple and understandable: he sought to ensure the reliability of the Unified State Register of Legal Entities, in particular, to prevent the registration of companies that are created for dishonest activities through the use of “nominalities”, etc.

At the same time, the interests of persons who were involved in the company and then lost interest in it and were left with debts to the budget (even the most insignificant ones) may suffer. For such persons, the norms can turn out to be a “time bomb”: they may not even be aware of the restrictions, which they usually learn about only when they receive a decision from the Federal Tax Service to refuse registration.

Those who are related to a “problem” company that has not yet been liquidated, but whose information in the Unified State Register of Legal Entities is marked as unreliable, are in a more advantageous position. They can overcome the restriction if they enter reliable information into the register or appeal the corresponding entry in an administrative and (or) judicial manner.

Information: how and what to check

Although the law does not regulate the procedure for verifying these restrictions, it is not difficult to find out whether a person has participated in an activity in the past. It is enough to check the information in the Unified State Register of Legal Entities, it is publicly available. It is much more difficult to find out whether a company that has ceased operations had debts. Its participant or leader may simply not have reliable information about this.

Current legal acts make it possible to obtain certificates from tax authorities on whether the taxpayer (payer of fees and/or insurance contributions, tax agent) paid taxes, fees, insurance premiums, penalties, fines, interest, as well as certificates on the status of tax payments, fees, insurance premiums, penalties, fines, interest of organizations and individual entrepreneurs.

However, the law does not regulate the right of the former founder (participant) or head of a legal entity to apply for such certificates to the tax authority. By virtue of sub. 10 p. 1 art. 32 of the Tax Code of the Russian Federation, this can only be done by a taxpayer, fee payer or tax agent. At the same time, even a minimal outstanding debt to the budget is quite a reason to refuse registration (see Resolution of the Arbitration Court of the Volga District F06-21519/2017 in case No. A49-11258/2016 of June 8, 2022).

We can only hope that the discussed norms of the Law on State Registration of Legal Entities and Individual Entrepreneurs will improve the reliability of the information contained in the Unified State Register of Legal Entities, and will also serve as an impetus for the conscious selection of candidates for the position of participant or director of the company.

• Unified State Register of Legal Entities, Courts and judges

Documents submitted to the wrong registration authority

It is not always necessary to submit business registration documents to the tax office nearest to you. In large cities and regional centers, special registration bodies are often created. If, out of ignorance, you contacted the wrong Federal Tax Service, tax officials can tell you the correct address. But if the documents are sent by mail, the application will be returned to you, and you will lose the state fee.

These and many other mistakes can be avoided if you prepare documents using our free service. The experience of tens of thousands of users proves that successful self-registration of a business is possible if you follow our tips and instructions when working in the service.

Still in doubt? Order a free consultation with registrar lawyers in your city or send prepared documents for a free review. We guarantee full legal literacy of the developed documents and the confidentiality of your information.

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On what grounds can the Federal Tax Service refuse to register a legal entity?

A complete list of legal grounds that guide employees of the Federal Tax Service in the process of making a decision to refuse state registration of a specific legal entity is given in Chapter Eight of the relevant Federal Law. The list of acceptable and recognized legal grounds includes a total of 21 conditions. Moreover, most of these conditions and circumstances are used as part of the settlement of the state registration procedure for a newly created organization or enterprise.

The grounds provided for by the Federal Law can be grouped in accordance with the content and essence of the violation committed by the applicant. Thus, state registration may be denied if the following violations are committed by a legal entity:

• subject to failure to provide a complete list of necessary documents and information from the legal entity. In this case, we are talking about information and documents that are implied by general and individual legislative norms for various forms of legal entities;
• in case of violations of regulations that were identified in the process of studying the content of the constituent documentation of a legal entity;
• if the authorized body is incorrectly selected according to various principles and the subsequent sending of an application and documents to a body that does not have the appropriate powers;
• incorrect form and content of forms required to complete the procedure;
• when providing forms that have not undergone the notarization procedure in cases where this procedure is mandatory by law;
• when identifying any restrictions that prevent the participation of certain groups of people in the status of founder of an organization or enterprise.

The grounds for refusal can be identified and established after the applicant has submitted the necessary documents to the authorized tax authority (at the stage of checking these documents for compliance with the requirements of the legislation of the Russian Federation). Officials of the tax authority have the right to make interdepartmental inquiries in order to obtain detailed information regarding the founders of an organization or enterprise.

The presence of reasons when deciding to refuse state registration can be determined taking into account the specific form of the potential legal entity. For example, if we are talking about a non-profit education, then additional reasons for refusal, in accordance with Article 23.1 in the relevant Federal Law, may be:

• the existence of a non-profit entity with a name similar to that chosen by the founders;
• identification of the fact of insult and violation of moral, national and religious values ​​by the name chosen by the founders.
• the presence of contradictions to the current legislation of the Russian Federation in the case of the creation of a foreign non-profit organization of a non-governmental nature;
• the emergence of a threat when creating a foreign non-profit organization of a non-governmental nature in relation to state sovereignty, independence and other factors;
• identification of the fact of liquidation of a foreign non-profit entity that previously existed, on the basis of gross contradiction with the current standards and regulations of the country.

Other reasons for refusal that may be accepted in relation to the registration of legal entities in the form of a non-profit entity correspond to those provided for a commercial company.

The above list of reasons is completely exhaustive. This means that the authorized body represented by the tax service does not have the right to refuse registration of legal entities for other reasons that are not provided for in the current legislation of the Russian Federation. Likewise, there are grounds that cannot influence the decision of the tax service. The list of these grounds that are not taken into account includes the presence of judicial or arbitration disputes regarding the following subjects:

• the amount or part of the share of a certain founder in the authorized capital;
• ownership of a whole share or partial authorized capital by one person or another;
• other factors that are directly related to the content of data about an enterprise or organization subject to state registration.

Legal practice shows that, despite a clear list of grounds, tax officials can often independently expand this list, causing registration refusals. For example, errors in filling out various points of the application may be regarded by officials as failure to provide a document or provision of incorrect information. Thus, cooperation with qualified lawyers even at the stage of preparing documents for registration of an organization or enterprise is an important condition for eliminating the likelihood of a refusal.