Lately, entries noting “unreliable data” have started to appear quite often in the Unified State Register of Legal Entities (hereinafter the “State Register”) with regard to a company address, director or shareholder. From January to May 2017 alone, more than 220,000 such entries have been made in the State Register.¹

Starting January 1, 2016 the the reliability of data, whether newly incorporated or already contained in the State Register, can be checked in the event a registration authority has reasonable doubts about it (objections of interested parties, noncompliance of submitted documents with data already on record at the Federal Tax Service, company address being listed among mass registration addresses, etc.).

Table 1. General procedure of the Federal Tax Service

Recognition of data as unreliable leads to adverse consequences both for the company’s image, because contracting parties as a rule have reliance on data contained in the State Register, and for activities of the company, because it is not possible to perform registration acts. Moreover, starting September 1, 2017, a company referenced as having unreliable data for longer than 6 months may be removed from the State Register under an administrative procedure.

Along with adverse consequences for the company itself, a record on unreliable data may affect its shareholders and/or management. For instance, a person being a director of any legal entity or shareholder of any limited liability company with an equity share of at least 50% in respect to which data in the State Register on the address and/or director is unreliable will not be able to be a director or shareholder of other legal entities for 3 years from the date an entry on data unreliability is made. The current court practice shows that courts find a denial to introduce changes into the State Register on such grounds to be justified.

Moreover, if obligations of a company removed from the State Register under an administrative procedure have not been performed due to fraudulent or unreasonable actions of a director and/or persons empowered to determine the company’s actions, secondary liability for obligations of this company may be imposed on the said director and/or persons following a creditor’s claim.

In view of the foregoing, we recommend giving attention to incoming notices and checking whether a record on data unreliability is entered in respect to your company on the web site egrul.nalog.ru.

In practice, in most cases a record on data being unreliable is entered with respect to a company’s address. In the event you receive a notice on the need to confirm an address or an extract from the State Register contains a mark of “unreliable data,” we recommend the following actions:

• Submit confirming documents and data (lease agreement, letter from a landlord, photos of the building or office, as well as a cover letter with detailed instructions on finding your company in the event a tax inspector visits the address given in the State Register);
• Change the registered address in the event your current address does not match the address of the permanent executive body of the company and it does not allow communication with the company.

Furthermore, each specific case of record on “unreliable data” being made has its own grounds, and if you are faced with the issue, you should contact the tax authorities as soon as possible and clarify the reasons for such record.

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¹ According to Interfax news agency.

Elizaveta Dvoinishnikova   Associate   St. Petersburg   Tel.: +7 (812) 346 7990

Nataliya Larkina   Associate   St. Petersburg   Tel.: +7 (812) 346 7990

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Elizaveta Dvoinishnikova or Nataliya Larkina, Office of Capital Legal Services.

This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues. 

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