New Minimum for Starting Business Capital Proposed
The government is making preparations to strengthen state control over businesses. Following a bill which abolishes the Joint-Stock Company in Russia, the Ministry of Finance and the FNS have submitted another bill for consideration by the State Duma. The bill would raise the minimum size of authorized business capital up to European standards.
Currently, the minimum amount of business capital is set by the Federal Law from August, 8th, 2001 129-ФЗ entitled "On State Registration of Legal Entities." For Open Associations, the amount is set at 100,000 roubles, and for Joint-Stock Companies and Open Companies — 10,000 roubles.
The new bill would raise the minimum for limited liability companies to 25,000 euros (rouble equivalent), and for open joint-stock companies — to 100,000 euros. Companies in current operation will be grandfathered. However, the grandfathered companies will be expected to maintain the old level of working capital. If they fall below it, the law would require the business to be liquidated. The same would be required of business formed after the new law takes effect, should they fall below the new standards.
To read the analysis in Russian, click here.