Establishing a Legal Entity: From Idea to Registration

Choice of Organizational-Legal Form

Before registering a company, it is necessary to answer several key questions: How many founders? Is limited liability required? Is external investment planned? Is public transparency of the structure needed? What is the tax burden?

LLC (Limited Liability Company) — optimal for small and medium-sized businesses with up to 50 members. The minimum charter capital in Russia is 10,000 rubles. Members are liable only within the limits of their contributions. Governance is flexible: a corporate agreement can be customized to suit business needs.

JSC (Joint Stock Company) — for attracting investments through the issuance of shares. PJSC (Public Joint Stock Company) is traded on the stock exchange and required to make disclosures. Private JSC is for a closed group of shareholders.

Constituent Documents

Charter — the main document of a legal entity. Contains: full and abbreviated name, location, scope of activity (in most jurisdictions — general legal capacity, all types of activities), size of the charter capital, management structure, decision-making procedure, rights and duties of members.

Corporate Agreement (Shareholders’ Agreement) — an agreement between participants regulating their relations: voting, sale of shares (lock-up, tag-along, drag-along), anti-dilution, exit from the business.

Registration in Russia

1. Choosing a company name (checking uniqueness)
2. Determining the legal address
3. Selecting OKVED code (type of activity)
4. Preparing the charter
5. Founders’ decision to establish
6. Payment of charter capital (10,000 rubles — within 4 months after registration)
7. Submission of documents to the Federal Tax Service (via MFC, notary, or online)
8. Obtaining OGRN, INN, and entry in the Unified State Register of Legal Entities (EGRUL)
9. Opening a checking account
10. Registration with the Pension Fund (PFR), Social Insurance Fund (FSS) (automatically upon registration)

Registration period — 3 working days. State fee — 4,000 rubles (waived for electronic submission).

Registration in UAE (DIFC)

1. Selecting the company type (DIFC Company, Branch, Representative Office)
2. Approval from DFSA for regulated activities
3. Submission of application to the DIFC Registrar of Companies
4. Contribution of charter capital
5. Obtaining Certificate of Incorporation
6. Obtaining business license

Minimum charter capital for DIFC Company (LLC) — 50,000 USD.

Practical Assignment

Develop a plan to create a technology startup in two jurisdictions: an LLC in Russia (for operational activity) and a holding company in one of the offshore jurisdictions (BVI, Cayman Islands, Cyprus) for attracting venture investments. Describe the structure, tax consequences, and key risks.