Corporate bankruptcy

newsletter 07/02/2013

According to the Federal Tax Service, 9290 companies have failed in the last year (2012), due to bankruptcy, that is 17.5% less than in the previous year (2011), thereby proving Credinform experts' earlier predictions. It is worth mentioning that the bankruptcy rate has been going down since 2010. 

Most of them were LLCs and ALCs. A share of such companies in total number of failed companies has increased for 82% compared to 2011 with only 67%. The share of open and closed Joint Stock Companies has not significantly change with 15% in 2012 vs. 12% in 2011. And only 2.6% of non-commercial organizations have failed last year. 

In 2012 the two areas with the most significant number of bankruptcies were Volga Federal District and Central Federal District with 2,622 and 2,591 cases respectively.  The lowest rate of business failure was found in North Caucasian Federal District and Far Eastern Federal District with 613 and 267 cases respectively.

Among largest federal subjects of Russia by GDP with most bankruptcy cases for 2012 are Moscow (773 cases), Samara region (549 cases) and The Republic of Bashkortostan (489 cases). 

There is also decrease in total number of bankruptcies among sole proprietorship companies with 1,772 court cases, which is 7.9% less than in 2011. 

The most common cause for an entrepreneur to file for bankruptcy is an insufficient Field Tax Audit Report. The entrepreneur might be obligated to pay extra VAT if Tax Service officials discover undeclared contracts with fly-by-night companies made within last three years. In today's business practice in Russia arrears can exceed ten million rubles so it is reasonable to check your business partner's background before signing a contract. Make sure that the contractor has official registration and all required licenses and permissions to provide the kinds of services or products you intent to purchase. Also it is wise to ensure the company owns the equipment necessary to fulfill the contract.

Detailed information on Russian companies bankruptcy you can obtain from our specialists.