As of 1 July 2023, the Russian Federation implemented a new business termination procedure for SME entities. Over the year, more than 42,000 companies have applied for the new mechanism. The procedure reduces time and money costs for entrepreneurs.

The business termination procedure had previously been multi-stage and could take six to 12 months. This has led to a significant number of business community entities becoming more profitable to abandon the company and not to undertake all necessary activities to legally eliminate it. Ultimately, the company eliminated the tax service. At that time, owners faced various negative consequences, such as a three-year ban on the opening of a new business.

The new procedure allows legal entities to exclude the company from the EGRUL in a simplified manner. The procedure removes restrictions on the opening of a new case, allowing for further business, reduces time and money costs.

" Russia has one of the most convenient and speedy business registration procedures. Business can be opened in both the banking and government sectors. This, among other things, affects the barrier-free entrance to entrepreneurship and the growth in the number of companies being established. But there are, of course, situations where business needs to be redesigned or replaced. In such cases, we have established a procedure for the simplified elimination of business for entrepreneurs who have no debt and do their business in good faith. Since July last year, more than 42,000 companies have applied for the new mechanism. Of these, more than 19,000 have successfully completed the simplified system " , the Deputy Minister for Economic Development, Tatiana Ilyushnikov, reported.

According to the Deputy Minister, the number of businesses that have ceased to operate has remained unchanged, but the proportion of companies that have chosen a simplified procedure has increased. While the share of these entrepreneurs last year was 35 per cent, it was 44 per cent.

As part of the simplified procedure, the constituents of a legal entity need to apply once to the tax authority, which can be submitted in both personal and electronic form. The termination procedure will take no more than 3.5 months. When submitting the application, the owners must confirm that the company has no debt to the budget, the creditors, the employees who have been dismissed have received all payments, and the company will issue the necessary accounts no later than one working day before the removal from the EGL.

Source: www.economy.com

Source: freepik.com

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Details of all support measures for industry and investors on the investing site