A draft law introducing an email address when registering legal entities is being prepared

Nov, 12 2023

The State Duma is working on a bill on the Business ID, which will allow companies to use an email address instead of a legal address. It is also planned to create a new digital platform for the implementation of this initiative.

The Parliament plans to consider this bill in the autumn, after it has been agreed with the relevant departments. Many experts agree that the adoption of the bill will help to mitigate the requirements for company registration, the absence of the need to rent premises will allow companies to direct more funds to development.

  • Foreign experience

In foreign jurisdictions, companies often resort to the service of providing an email address. This address is indicated in the company’s corporate documents, it can be used for official purposes. For example, in Hong Kong, an email address is already used to receive correspondence from government authorities. It can be used by both individual entrepreneurs and legal entities.

  • Current legislation and advantages of the company’s email address

According to the current legislation, when registering a company, it is mandatory to indicate the location of its permanent executive body. In a practical sense, this creates obstacles for small companies, since they need premises for rent and the opportunity to specify it as a legal address, while not all landlords agree to provide their premises for the official address of the company. In addition, employees of many companies can work remotely, and the employer does not consider it necessary to maintain an office for employees.

With the advent of a virtual address, the company receives a so-called Business ID, which will be assigned using a special digital platform. For the use of Business ID, all conditions will be created within the framework of Russian legislation, the current legislation concerning the legal status of legal entities and individual entrepreneurs will be adjusted. At the same time, business participants will be able to independently choose a more convenient way for them to obtain legally significant documents – at a virtual address or at a legal address, the chosen method will be reflected in the Unified State Register of Legal Entities and thanks to this, counterparties will be able to track the correct address for sending documents. In addition, at this stage of the discussion, it is proposed to keep the address of the company’s location in the Unified State Register of Legal Entities for carrying out control measures by state authorities.

The authors of the bill believe that now the presence of premises for the executive body is not a guarantee that the company actually carries out its activities, since employees can work remotely, meetings can be held through online services, and documents do not have to be signed in person, you can do it using an electronic digital signature. Therefore, the requirement to have a legal address entails optional expenses for the rental of premises. There are no changes in taxation when using a Business ID, since the location address will determine which budget taxes will be paid to.

Author of the article
A draft law introducing an email address when registering legal entities is being prepared
Valentina Khlavich
Managing Partner
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