Unreliable data in the Unified State Register of Legal Entities: how to escape negative consequences

вестник 11.01.2018

According to the data of the Information and Analytical system Globas as of October 2017, almost 410,000 companies have an entry concerning unreliability of data in the Unified State Register of Legal Entities (EGRUL).

An entry on data unreliability is to compromise any company’s operation. Such company will lose its counterparties. Banks will try to get protected from risks and freeze all its accounts, and this will close the door on the company’s activity. There will be no access to state procurement and tenders. An unreliability entry might cause loss of the company’s market reputation, cancellation of contracts, bringing administrative action against the company’s CEO or shareholder, or restriction of their rights.

Tax authorities are entitled to check the reliability of data both already contained and the one to be included in the EGRUL under the Federal Law #67-FZ from March 30, 2015. And since September 1, 2017, the Federal Law #488-FZ from December 28, 2016 establishes the order of forced striking off the EGRUL: a 6-month long entry on unreliability is enough for that.

The Federal Tax Service keeps fighting fly-by-night companies (see statistics in Pictures 1 and 2) by liquidation of doubtful companies. However, even responsible companies may get an unreliability entry. The Federal Tax Service may question the operational address if mail is undeliverable and returns to the Federal Tax Service; if the address seems to be a mass registration address; if a company failed to update information about change of CEO or it did not make sure to inform tax authorities in time.

A timely checking of one’s counterparties’ responsibility in the Information and Analytical system Globas can help to avoid negative consequences of entries on unreliability of data in the EGRUL.

It is possible to escape the consequences of an unreliability entry by introduction of reliable data to the EGRUL instead of unreliable data, appealing through legal proceedings against such entry, over 3 years past the entry. Having received a notification from the Federal Tax Service, a company has one month for data correction.

A timely checking of one’s counterparties’ responsibility in the Information and Analytical system Globas can help to avoid negative consequences of entries on unreliability of data in the EGRUL.

Picture 1. Rate of change in the number of dissolved legal entities according to the EGRUL (during an average month) Picture 1. Rate of change in the number of dissolved legal entities according to the EGRUL (during an average month)

For eight months of 2017 most companies ceased operations due to removal from the EGRUL in accordance with a registration body’s decision (Picture 2).

Picture 2. Change of average industrial values of the return on investment ratio of the Russian manufacturers of cast iron, steel and ferroalloys in 2007 – 2016 Picture 2. Reasons of termination of operations of legal entities for 8 months of 2017, according to the EGRUL (share %)