Tax Service Verification of the Authenticity of Information About the General Director - Foreign Citizen

The Interdistrict Inspectorate of the Federal Tax Service No. 46 in Moscow (hereafter referred to as 'the Inspectorate') is forming a new registration practice for verifying the authenticity of the information provided about the general director.

If a limited liability company or a joint-stock company intends to change its general director, and the director is a foreign citizen, the Inspectorate may suspend the registration of changes based on Clause 4.4 of Article 9 of the Federal Law dated 08.08.2001 No. 129-FZ 'On State Registration of Legal Entities and Individual Entrepreneurs' and conduct a verification in accordance with Sub-clause 2 of Clause 2 of the Order of the Federal Tax Service of Russia dated 11.02.2016 No. MMV-7-14/72@.

As a reminder, according to Clause 4.4 of Article 9 of the aforementioned Federal Law No. 129-FZ, state registration cannot be carried out if the information to be included in the Unified State Register of Legal Entities is found to be inaccurate. If necessary to conduct a verification of the authenticity of the information to be included in the Unified State Register of Legal Entities due to changes in the information about the legal entity, the registering body has the right to suspend state registration until the day the verification is completed, but for no more than one month.

In accordance with Sub-clause 2 of Clause 2 of the Order of the Federal Tax Service of Russia dated 11.02.2016 No. MMV-7-14/72@, one of the grounds for conducting verification activities is the discrepancy between the information contained in the documents submitted to the registering authority for state registration of a legal entity and the information from the documents of the Federal Tax Service of Russia.

Referring to this formal basis, the Inspectorate does not allow changes to be made in the Unified State Register of Legal Entities in connection with the change of the general director if the new general director is a foreign citizen. In this case, the registering authorities, in accordance with Sub-clause 'b' of Clause 4.2 of Article 9 of the Federal Law No. 129-FZ, conduct an inquiry of persons who may be aware of any circumstances relevant to the verification.

Therefore, it is possible to apply to the territorial tax office with a request to conduct an inquiry. The inquiry is conducted regarding the new general director - a foreign citizen. In particular, the person is asked clarifying questions that allow verifying whether the person knows or does not know that they have been elected as the new director of the company and whether they have any relation to the company.

Confirmation of the inaccuracy of the information provided about the sole executive body is the basis for the registering body to send a notification to the company about the need to provide accurate information within 30 days (Clause 18 of the Order of the Federal Tax Service of Russia dated 11.02.2016 No. MMV-7-14/72@). Failure to provide accurate information results in a refusal of state registration according to Article 23 of the Federal Law No. 129-FZ.

If the person during the inquiry confirms his or awareness of being appointed as the general director, the territorial registering body prepares a protocol recording the results of the inquiry. This protocol is sent to the Inspectorate, and the applicant organization is issued a confirmation that the protocol has been sent to the Inspectorate. Subsequently, in accordance with Federal Law No. 129-FZ, corresponding changes are made in the Unified State Register of Legal Entities.

Other tax authorities are likely to soon implement a similar registration practice. Therefore, participants and management of economic societies need to be aware of the possibility of independently and proactively approaching the territorial tax authority with a request to conduct an inquiry of the new general director - a foreign citizen.