How to open your own business without communicating with an official?
At the end of November 2018, the parliament radically updated the legislative framework for the registration of entrepreneurs and companies. The new legislation combines diverse initiatives: both those that have already successfully proven themselves in practice, and innovations, such as, for example, a simplified procedure for the official liquidation of LLCs, other forms of education of business entities that the business environment has long needed.
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With the beginning of systemic decentralization, more than 7 thousand notaries simultaneously received the right to register legal entities and individual entrepreneurs. This figure is not called by chance. Our registered more than 2 million entrepreneurs and more than 1 million companies. But the number of state registrars is not enough to serve the business efficiently and quickly. Therefore, queues and bureaucratic delays are typical synonyms for public services. Expanding the circle of entities that provide registration services will make it possible to correct these shortcomings without spending funds from the state budget. And since notaries already have experience in fulfilling the functions of real estate registrars and the necessary material base, the acquisition of new powers by them will occur without any delay. In addition, the involvement of private entities (and therefore competition in the field of registration) is an effective way to combat domestic corruption.
Finally, it was possible to transfer the functions of state registration entities to local authorities. Decision making, which is most demanded among citizens, at a low level and “interference” of higher authorities only when the decision of the lower level are ineffective – this is the basic principle that the entire system of power in the EU countries is built on. Guided by the same approach, in April 2016 the Ministry of Justice will finally get rid of the powers for state registration of business that will be transferred to local authorities, and therefore the centralization and monopolization of this sphere will remain in the past.
However, it should be noted that it is not always necessary to be able to provide business registration services in a village, town or small town. Therefore, under the new legislation, the relevant local councils have the right, and not the obligation, to assume new functions. This is a rational approach, because before delegating state powers, you need to make sure that the local councils have sufficient material resources, jobs and trained personnel.
Another subject of state registration of entrepreneurs, in addition to notaries and local authorities, will be accredited entities. We are talking about legal entities under public law, mainly state or municipal enterprises. Based on the contract, they will perform the functions of a front office or fully exercise the powers of state registrars. In fact, we are talking about legislative consolidation of existing practice. With the support of the Ministry of Justice, the efforts of some local councils have already done a lot for the functioning of the so-called houses of justice – citizen service centers that will provide, in addition to state registration, a number of other administrative services. The adoption of the new law will allow the dissemination of such practices throughout the country, establishing a clear legal framework.
Reception of documents and implementation of state registration take place on the basis of extraterritoriality. Simply put, it becomes possible to contact any state registrar within the country, regardless of the location or place of residence of the applicant. Previously, the Justice Ministry has already tested this principle in 8 regions as part of the Extraterritoriality pilot project. Thus, during the year about 7 thousand registration actions were carried out, clearly indicates the success of the idea. Legislative consolidation of this principle provides businesses with the opportunity to freely choose the place for filing documents and will solve the problem of the uneven workload of state registrars in different registration bodies.
Another positive aspect of the new legislation is that the procedure for starting a business has been greatly simplified. Firstly, unlike many countries, the initial registration of entrepreneurship in our country is free. Secondly, the new Law “On State Registration of Legal Entities, Individual Entrepreneurs and Public Associations” introduces clear and understandable procedures.