What is the difference between a branch and a representative office? What are the differences between a branch and a separate division?

Many companies pursuing the goal of expanding their business, in practice, are faced with the problem of choosing the correct form of securing the legal status of an additional office or workshop.

What should you choose - a branch or a representative office? What are the differences between them and how do these forms differ from other separate units? Or maybe it's one and the same? This article will help you understand the differences between branches, representative offices, and other separate divisions, highlight their main features and help you choose the right form of doing business, not forgetting the specifics of the company’s taxation regime.

First of all, let us make a reservation that the terminology of civil and tax law differs. In the Tax Code of the Russian Federation (hereinafter referred to as the Tax Code of the Russian Federation, the Code) there is no definition of the concept of a branch, as well as the concept of a representative office. At the same time, Article 11 of the Tax Code of the Russian Federation determines that the institutions, concepts and terms of civil and other branches of legislation of the Russian Federation used in the Code are applied in the meaning in which they are used in these branches of legislation, unless otherwise provided by the Code. Therefore, we will use these terms for tax purposes exactly in the meaning in which they are used in civil legislation.

The concepts of “branch” and “representative office” are given in Article 55 of the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code of the Russian Federation). According to the provisions of this norm, a representative office is a separate division of a legal entity, located outside its location, which represents the interests of the legal entity and protects them.

A branch is a separate division of a legal entity located outside its location and performing all or part of its functions, including the functions of a representative office.

Based on the definitions, we can conclude that the main difference between a branch and a representative office from each other is their functional purpose: a representative office only represents the interests of a legal entity in its relations with participants in civil transactions, for example, it performs the functions of conducting negotiations and subsequent conclusion of transactions, as well as protecting the interests of the organization in the courts.

The branch also represents the interests of the legal entity, i.e. including performing the functions of representation. However, in addition to this, the branch carries out all or part of the functions of a legal entity. In other words, the branch not only negotiates and makes transactions on behalf of the legal entity, but also carries out actual actions aimed at fulfilling the concluded contracts, i.e. conducts production, trade or other activities, the implementation of which is carried out by the legal entity itself. In this case, the branch can perform all types of activities of the organization or some of them.

Having considered both concepts, we can identify features that are similar for both the branch and the representative office. The first and, perhaps, most defining feature comes down to the fact that neither the branch nor the representative office are legal entities, i.e., independent participants in civil transactions, but enter into civil, labor, tax and other legal relations on behalf of the legal entity that created them . In practice, this feature is reflected in the following:

Transactions on behalf of a branch or representative office are concluded by the legal entity itself;

It is also responsible for obligations arising in connection with their activities;

Branches and representative offices cannot act as plaintiffs and defendants in court, i.e. cannot independently participate in legal proceedings on their own behalf. This is how the Presidium of the Supreme Arbitration Court of the Russian Federation (hereinafter referred to as the SAC RF) regulates this issue in Information Letter No. 34 dated May 14, 1998 “On the consideration of claims arising from the activities of separate divisions of legal entities”: “... a separate division that is not legal entity, can bring a claim only on behalf of the legal entity... The statement of claim signed by the head of a separate division must be accompanied by a power of attorney (or a copy thereof) of the legal entity confirming his authority to sign the statement of claim on behalf of the legal entity.

In the absence of such a power of attorney, the statement of claim is returned without consideration on the basis of clause 2, part 1, art. 108 of the Arbitration Procedure Code of the Russian Federation.”

A similar conclusion is contained in the Resolution of the Plenum of the Supreme Court of the Russian Federation and the Plenum of the Supreme Arbitration Court of the Russian Federation dated June 11, 1999 N 41/9 “On some issues related to the implementation of part one of the Tax Code of the Russian Federation.” By virtue of clause 9 of this Resolution, branches and representative offices of Russian legal entities are not considered as participants in tax legal relations and do not have the status of taxpayers, tax agents and other obligated persons. Responsibility for failure to fulfill all obligations to pay taxes, fees, penalties and fines lies with the legal entity that includes the relevant branch (representative office).

Guided by this legal position, the FAS Moscow authority in its Resolution dated April 15, 2009 No. KA-A40/1708-09 noted that branches are not subjects of tax legal relations, therefore, cannot be brought to tax liability, since liability for actions (inaction) of branches only a legal entity can be involved.

Territorial isolation, or location outside the location of the organization, is also an important defining feature of both a branch and a representative office. In accordance with paragraphs 2 and 3 of Art. 54 of the Civil Code of the Russian Federation, the location of a legal entity is determined by the place of its state registration and is indicated in its constituent documents.

There are different opinions regarding the concept of “location of a legal entity” in modern legal literature. Some are inclined to believe that the location of a legal entity is a specific address, i.e. settlement, street, house, office where the permanent executive body of a legal entity is located, or in its absence - another body or person authorized to act on behalf of the legal entity without a power of attorney, information about which is contained in the Unified State Register of Legal Entities (hereinafter referred to as the Unified State Register of Legal Entities). In accordance with this assumption, territorial isolation means that if an additional office of a company is located in the same locality, on the same street, and even in the same house as the legal entity that created them, but in a different premises from it, they can safely be classified as a branch on this basis or representative office.

In accordance with the opposite theory, the location of a legal entity should be considered not as a specific postal address contained in the Unified State Register of Legal Entities, but as belonging to a specific subject of the Russian Federation (for example, St. Petersburg). Following the logic of this assumption, territorial isolation as a sign of a branch or representative office means that a legal entity can create them only outside its location, i.e. in another subject of the Russian Federation. However, in practice, it can be noted that tax authorities, guided for the most part by the Tax Code and without delving into the theoretical aspects of civil legislation, do not limit taxpayers’ right to create branches and representative offices in the same subject of the Russian Federation where the legal entity itself is located.

The property isolation of branches and representative offices as their next important feature means that, firstly, they have the right to have property allocated by a legal entity to a separate balance sheet, and secondly, they have the right to have a separate current account. At the same time, according to Letter of the Department of Tax Administration of the Russian Federation for Moscow dated 06/09/2004 N 23-10/1/38453, the allocation of a branch or representative office to a separate balance sheet is determined by the constituent documents of the organization, including its charter and regulations on this branch or representative office. However, branches and representative offices do not have the right of ownership, operational management or economic management of this property and funds - the legal entity itself has real and obligatory rights to them, and the branch or representative office only actually owns and uses them.

Branches and representative offices are organizationally separate from the legal entity that created them. This means that their managers are appointed by a legal entity and act on the basis of a power of attorney issued to them. The importance of a power of attorney as a document defining the powers of the head of a branch or representative office is discussed in paragraph 20 of the Resolution of the Plenum of the Supreme Court of the Russian Federation and the Plenum of the Supreme Arbitration Court of the Russian Federation dated July 1, 1996 N 6/8 “On some issues related to the application of part one of the Civil Code of the Russian Federation,” where in particular, it is stated:

“It must be borne in mind that the relevant powers of the head of the branch (representative office) must be certified by a power of attorney and cannot be based only on the instructions contained in the constituent documents of the legal entity, regulations on the branch (representative office), etc., or appear from the situation, in which the head of the branch operates.

When resolving a dispute arising from an agreement signed by the head of a branch (representative office) on behalf of the branch and without reference to the fact that the agreement was concluded on behalf of a legal entity and by its power of attorney, it is necessary to find out whether the head of the branch (representative office) had at the time of signing the agreement the corresponding powers expressed in the regulations on the branch and the power of attorney. Transactions made by the head of a branch (representative office) in the presence of such powers should be considered completed on behalf of the legal entity.

It must also be taken into account that the head of a branch (representative office) has the right to entrust the performance of actions for which he is authorized by a power of attorney to another person in compliance with the rules provided for in Article 187 of the Code."

Branches and representative offices operate on the basis of a separate document (Regulations), which is an internal document of the organization (i.e., not subject to state registration) and is approved by the body whose competence includes making a decision on the creation of a branch or representative office. We note that any requirements for the content of the Regulations are not established by law.

Information about branches and representative offices must be reflected in the constituent documents of the legal entity that created them. This is discussed, for example, in paragraph 5 of Art. 5 of the Federal Law “On Limited Liability Companies”, paragraph 6 of Art. 5 of the Federal Law “On Joint-Stock Companies”, paragraph 5 of Art. 5 of the Federal Law “On State and Municipal Unitary Enterprises”.

Taxpayers often ask whether it makes sense to include information about a branch or representative office in the new edition of the Charter, adopted in accordance with the requirements of Federal Law No. 312-FZ of December 30, 2008. This question was unequivocally answered by the Federal Arbitration Court of the West Siberian District in its decision of December 17, 2009 No. F04-7560/2009 in case No. A03-6220/2009: information about the branch must also be reflected in the new edition of the company’s Charter.

We examined the main features that characterize branches and representative offices and distinguish them from legal entities. Now let's turn to the issue of consolidating the legal status of a branch and representative office - let's talk about registering their creation.

Companies often forget that making one decision to create a branch or representative office and registering it for tax purposes is not enough. It is also necessary to make appropriate changes to the organization's constituent documents. So, to open a branch or representative office, you must go through the following steps:

Make a decision on the creation of a branch/representative office by the competent authority determined by law and charter;

Make appropriate changes to the organization’s constituent documents in terms of indicating information about a specific branch or representative office, the decision to create which has been made;

Finally, register the organization for tax purposes at the location of the established branch/representative office.

Until recently, taxpayers had to go through all three stages of the procedure on their own, knocking up the thresholds of the offices of tax authorities with a whole volume of documents confirming the fact of creating a branch or representative office and making appropriate changes to the Unified State Register of Legal Entities and constituent documents. This procedure was simplified in terms of tax registration by Federal Law No. 229-FZ of July 27, 2010, which came into force on September 2, 2010. Now registration, accounting of changes in information, deregistration of an organization with the tax authority at the location of the branch and representative office are carried out on the basis of information from the Unified State Register of Legal Entities. This means that after making changes to the Unified State Register of Legal Entities and the constituent documents in connection with the creation of a branch or representative office, the registering authority transfers a file containing the relevant information to the tax authority at the location of the organization, and that, in turn, to the tax authority at the place of creation of the branch or representative office. representative offices. The latter is given five days to register the organization for tax purposes at the location of its branch or representative office. The taxpayer can only receive a Notification of Tax Registration from this tax authority.

However, I would like to add that simplifying this procedure at first glance requires the development of a detailed mechanism for debugging the process of interaction between tax authorities. For example, today a far from illustrative example is given by MIFTS No. 46 in Moscow, a registration authority, in whose practice there have been cases of failure to submit data about an established branch to the tax authority at the location of the organization, which significantly delayed the process of registering the branch for tax purposes. To eliminate such situations, we recommend that taxpayers do not wait for the Interdistrict Inspectorate to perform its functions, but after entering information into the Unified State Register of Legal Entities, independently contact the tax office at their location and lobby for the relevant request to be sent to the registration authority.

From what moment should a branch or representative office be considered established? The answer to this question can be found in the Letter of the Department of Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation dated December 16, 2009 No. 03-02-07/1-541: the date of creation of a branch (representative office) of the organization is the date of entering information about it into the Unified State Register of Legal Entities.

We examined the similarities between a branch and a representative office and the differences between them, and determined the procedure for registering them. Now it’s worth talking about another concept used in law and in practice, namely a separate division of a legal entity.

The semantic content of the concept of “separate division”, used in tax legislation, is broader than in civil law. In accordance with Article 11 of the Tax Code of the Russian Federation, a separate division of an organization is any territorially separate division from it, at the location of which stationary workplaces are equipped. Recognition of a separate division of an organization as such is carried out regardless of whether its creation is reflected or not reflected in the constituent or other organizational and administrative documents of the organization, and on the powers vested in the specified division. In this case, a workplace is considered stationary if it is created for a period of more than one month.

Thus, the Tax Code of the Russian Federation distinguishes another type of separate division of a legal entity, different from a branch and representative office.

We have determined that branches and representative offices have a number of characteristics that distinguish them not only from legal entities, but also from other separate divisions, namely:

1) location outside the location of the organization;

2) vesting of property by the organization that created them;

3) availability of information about them in the constituent documents of the legal entity and in the Unified State Register of Legal Entities;

4) the presence of a separate document (Regulations), duly approved, on the basis of which they act;

5) appointment of their managers by the competent body of the organization and the exercise of their powers on the basis of a power of attorney issued by the organization;

6) implementation of all functions of the organization or part thereof (for a branch);

7) representing the interests of the organization and protecting them (for representative offices).

Moreover, the judicial authorities proceed from the fact that in order to qualify a separate structural unit as a branch or representative office, all the characteristics listed in Art. 55 of the Civil Code of the Russian Federation (see Resolution of the Federal Antimonopoly Service of the Moscow District dated July 4, 2007 N KA-A41/5937-07-P). And the absence of at least one of them means that such a division of a legal entity cannot be recognized as a branch or representative office.

Based on their definition given in the Tax Code of the Russian Federation, a separate division is characterized for tax purposes by the following characteristics: the presence of workplaces that are stationary, equipped, created outside the location of the organization itself for a period of more than a month, at the location of which the activities of this organization are carried out.

The availability of jobs is a fundamental feature of any separate structural unit, allowing one to determine whether the organization has an obligation to register it. A similar conclusion is contained in the Letter of the Ministry of Finance of the Russian Federation dated May 4, 2007. N 03-02-07/1-214: “From the meaning of the specified provisions of paragraph 2 of Article 11 of the Tax Code of the Russian Federation in conjunction with Articles 16, 20, 22 and 209 of the Labor Code of the Russian Federation (hereinafter referred to as the Labor Code of the Russian Federation), it follows that the main feature a separate subdivision of an organization is the implementation by this organization of activities in the Russian Federation outside its location through a stationary workplace equipped for its employee.” Art. 209 of the Labor Code of the Russian Federation defines a workplace as a place where an employee must be or where he needs to arrive in connection with his work and which is directly or indirectly under the control of the employer. Based on this norm, the Department of Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation has repeatedly indicated in its letters that if an organization has not created at least one stationary workplace for its employees, which is directly or indirectly under the control of this organization, the grounds for placing There are no tax records of this organization at the place of activity (see Letter dated August 5, 2005 N 03-02-07/1-211 and Letter dated August 8, 2006 N 03-02-07/1-212).
The differences between branches and representative offices and other separate structural divisions of a legal entity acquires important practical significance for tax purposes of the organization itself.

The fact is that, according to paragraphs. 1 clause 3 art. 346.13 of the Tax Code of the Russian Federation, organizations with branches and/or representative offices lose the right to use a simplified taxation system. However, this prohibition does not apply to other separate divisions created in compliance with tax legislation. Therefore, a taxpayer interested in having the right to apply a simplified taxation system should keep this rule in mind when creating a structural unit.

It is noteworthy that, despite the visible signs, the fact of creating a branch, and not a separate division, taxpayers managed to challenge in court, defending their right to apply the desired “simplification”. When considering such cases, the courts proceeded from the following.

In order to apply the rules on a simplified taxation system, it is not enough to simply consolidate the decision to create a branch or representative office on paper. The company must take specific actual actions aimed at carrying out activities through its branch or representative office. For example, in one case, the court noticed that the company did not approve the Regulations on the branch, did not appoint its director, no property was transferred to the branch, not a single workplace was equipped for its functioning, and the company did not register for taxation at the location of the branch. The premises for the location of the branch at the address specified in the amendments to the constituent documents of the Company were not transferred to the company for use by the owner, nor was a lease agreement concluded. In addition, the court explained that from the provisions of paragraphs. 1 clause 3 art. 346.12 of the Tax Code of the Russian Federation it follows that the right to apply the simplified taxation system is not granted only to those organizations that actually have separate divisions endowed with all the functions of a branch and formed in accordance with the requirements of civil legislation. In this case, the division indicated in the constituent documents of the company does not actually exist, and therefore the company cannot be considered to have a branch. The introduction of amendments to the constituent documents regarding the creation of a branch, in the case where the branch is not actually created, cannot in itself indicate the company’s non-compliance with the requirements established in paragraphs. 1 clause 3 of Article 346.12 of the Tax Code of the Russian Federation (see Resolution of the Federal Arbitration Court of the North-Western District of July 14, 2009 N A56-40765/2008).

In another case, the court came to the conclusion that the separate division created by the company, in essence, does not have the characteristics of a branch defined in Article 55 of the Civil Code of the Russian Federation, since it does not represent the interests of the company, the founders of the company did not vest it with the functions and powers provided for by the said article (Resolution of the Federal Arbitration Court Court of the North Caucasus District dated August 11, 2010 in case No. A32-4638/2010).

In addition to the absence of grounds for losing the right to use the simplified taxation system, separate divisions, unlike branches and representative offices, have another advantage. It lies in the fact that registering a separate division is much simpler than a branch or representative office. Firstly, this does not require the execution of a corresponding decision. Secondly, there is no need to enter information about a separate division into the constituent documents and into the Unified State Register of Legal Entities. It is enough just to register for tax purposes according to the rules of Art. 83 Tax Code of the Russian Federation. This exception becomes especially relevant in the case of the alternate creation of several separate divisions within a short period of time, which allows saving both the time allotted to the registration authority to perform a state function and the state duty. Especially in those entities where the mechanism for transmitting data on the creation of branches and representative offices in accordance with the new rules has not yet been worked out and it occurs with long delays.

In any case, even despite all the organizational simplicity of the design and operation of a separate division, do not forget that modern business customs dictate the current rules of doing business and require its participants to legally formalize the form of building business relations.

Companies that occupy leading positions in the sale of certain services and goods can operate in the territory of several administrative-territorial units or even countries. Separate structural divisions allow you to effectively promote your business away from the main production. Those companies that have not yet reached great heights strive to expand production, increase sales volumes, market leadership and sky-high profits. On the path to success, the leaders of such companies come to the conclusion that without going beyond the boundaries of one locality it will not be possible to achieve their goals.

In order for the product to be promoted with maximum efficiency and the brand to become recognizable, it is necessary to meet potential customers halfway by opening company divisions in close proximity to their places of residence. When deciding to open a separate division, you need to understand what organizational forms they come in and what the differences are between them.

Branch and representative office: definition of terms

Independent divisions that are remote from the main office of the company can be branches or representative offices.

A branch is a form of organizing commercial activity separately in which a division receives the right to perform part or all of the functions of the company.

The representative office is entrusted with the tasks of protecting the interests of the company, as well as representing them.

Basis for identifying differences between separate units

The following documents are the basis for distinguishing a representative office from a branch. They provide for the rules by which the activities of independent structural units are carried out.

• Tax and Civil Codes.
• Instructions for opening and closing bank accounts.
• Company charter.
• Regulations regulating the work of separate divisions.

Common features of branches and representative offices

It is impossible to determine the differences between phenomena without analyzing their similarities. It is necessary to understand the specifics of the functioning of remote units of any type. For the full operation of both representative offices and branches, the following measures should be taken.

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• Provide divisions with isolation from the main enterprise by territorial distancing from the company’s main office and providing a certain amount of independence.
• Enable departments to expand the scope of the company’s activities as a whole.
• Mention branches and representative offices in the company charter.
• Appoint directors and other representatives of the management team, issue the necessary powers of attorney for them.
• Develop regulations on structural divisions.
• Provide the property necessary to carry out the activity.

Main differences between branches and representative offices

The representative office is characterized by the following features:

• Granted only the authority to represent the company.
• Does not conduct economic activities.
• Operates on the basis of the company's own regulations and charter.
• There is no own balance.
• A bank account cannot be opened.

The branch is characterized by the following features:

• The functions of the company are partially or fully performed.
• Economic activity is underway.
• The basis for functioning is the regulations and charter of the organization.
• It has its own balance.
• As a rule, a bank account is opened.

The main difference between the forms of remote divisions is that a branch is endowed with greater independence than a representative office.

Which type of unit should I choose?

To determine which unit is better to open, it is not enough to know how they differ. It is necessary to clearly define the purpose and prospects for opening a particular office.

For example, it is better to open a representative office if it is necessary to perform tasks such as:

• Conclusion of contracts and their support.
• Expanding the circle of clients.
• Problem solving.
• Increasing brand popularity.
• Promotion of the company's product.

A branch is opened when problems of greater complexity need to be solved. However, you should first assess whether such a division will generate income, since maintaining a branch can often be quite expensive. In addition, when carrying out activities that require obtaining a license, you will have to incur costs for this. Often, a branch is entrusted with independently paying salaries to employees, so it is also necessary to register it with the appropriate funds.

A legal entity, unlike an individual entrepreneur, has the opportunity and right to open its own separate division. There may be several of them. There are a number of varieties of “isolations”. The most common are representative offices and branches. There are also equipped workplaces. Let's find out what is the difference between a branch and a separate division as such.

Peculiarities

The Civil Code provides for the right to create organizations to conduct business activities. Legal entities are opened, as a rule, by ordinary citizens. They are also managing their own enterprise.

Any company is opened to obtain some positive result. Legal entities have the same rights as other economic entities.

Literally every organization registered on the territory of the Russian Federation can open branch or separate division(hereinafter also referred to as OP). This right is enshrined in Article 55 of the Civil Code of the Russian Federation.

When opening a separate division of their enterprise, managers must understand that in this case we are not talking about creating a new legal entity. The OP does not have the same legal status.

But desire alone is not enough to open a separate division. According to the Tax Code (Article 11), it must have a number of characteristics. Namely:

• the address of the head office (the one written in the registration and statutory documents) and the address of the OP should not be identical;
• It is mandatory to have equipped workplaces for employees to work for a period of 1 month or more.

The Tax Code also contains information about possible types separate divisions: branch or representative office, or stationary workplace (hereinafter also referred to as SWP). Each of them has both its own characteristics and common features.

For example, data on PSA is not entered into the Unified State Register of Legal Entities. And in the case of a branch or representative office, this is mandatory.

When creating a separate division of an organization, you need to fill out a special information form (it is different for each type of OP) and take it to the Federal Tax Service.

Varieties

Information about the types of structural divisions is contained in several legislative acts, but the data in them varies. So:

It turns out that these codes somewhat contradict each other.

Let us note that the workplace is understood as a place that is under the control of responsible officials for the employee to perform his immediate tasks and responsibilities there.

The types of OP include not only a branch and a representative office. This list is somewhat longer. The law allows other structural parts of the organization to be recognized as separate divisions. They all have common features and their own characteristics.

Branch specifics

A branch is one of the most common forms of separate divisions. This type allows you not only to create a geographically remote OP, but also to endow it with many functions.

An important feature is that branch is a separate division of a legal entity, which may simultaneously bear the functions and responsibilities of a representative office.

The concepts of branch and representative office cannot be combined. These two forms of separate division have many differences, functional, for example. Even the definitions from the Civil Code of the Russian Federation indicate this.

To have a clearer understanding of what difference between a branch and a separate division (table presented below), it is necessary to consider the functions, capabilities and other features of each of the forms.

Organization and registration branches, opening representative offices and creation separate divisions on the territory of the Russian Federation is carried out in compliance with the requirements of the Law and other federal laws, and outside the country also in accordance with the legislation of the foreign state on the territory of which a branch is created or a representative office or separate subdivision is opened.

The difference between the concepts of “branch” and “separate division”

Branch- a division territorially isolated from the organization, located outside the location of the organization and performing all its functions. The organization of the branch must be reflected in the constituent documents of the parent organization.

Separate division- any division territorially isolated from the organization, at the location of which stationary workplaces are equipped. Recognition of a separate division of an organization as such is carried out regardless of whether the creation of the division is reflected or not reflected in the constituent or other organizational and administrative documents of the organization, and on the powers vested in the specified division. That is, the parent organization no need to make changes in its Constituent Documents. All that is required is a decision made at a general meeting of the organization’s participants.

The difference between the concepts of “branch” and “representative office”

Representation- is a separate division of a legal entity located outside its location, which represents the interests of a legal entity and protects them.

Branch- a division of a legal entity that carries out function of the parent organization, including performing the functions of representative offices. The range of activities of the branch is greater than the range of functions of the representative office.

Registration of a branch, representative office and separate division

Registration of a branch, representative office and separate division is carried out by the Federal Tax Service Inspectorate (Inspectorate of the Federal Tax Service) at their location. The period for reviewing documents and making a decision on registration is currently five working days.

Registration of a branch and separate division different from registering a new organization at least by the fact that branches, as defined in Article 55 of the first part of the Civil Code of the Russian Federation, are not independent legal entities - they are tied to which created a branch of the parent organization.

Organization of a branch or representative office

A branch is a separate division of a legal entity located outside its location and performing all or part of its functions. The legal entity that created the branch endows it with property. The branch operates on the basis of regulations approved by the organization that created it. At the general meeting of participants (founders) of the parent organization, a decision is made to create a branch and/or a separate division by two-thirds of the votes of the total number of all participants. The quantitative condition of two thirds is valid unless the constituent document (Charter or Memorandum of Association) stipulates otherwise. At the same meeting it is approved and head of a branch or representative office, as well as its location.

In the constituent documents of the parent organization when registering branches Information about the organization’s branches must be recorded. Therefore, at the same meeting it is adopted decision to amend the constituent documents of the parent organization. State registration of changes made to the charter in connection with the formation of a branch (representative office) from July 1, 2002 is carried out in the manner established by Chapter VI of the Federal Law of 08.08.01 N 129-FZ “On State Registration of Legal Entities”. Only after the parent organization has completed the procedure for registering changes in the charter, legislation is given thirty days period registration of a branch or separate division.

Activities of a branch or representative office

The main internal document regulating the activities of a branch or representative office is Regulations on the branch (representative office). The composition of information to be disclosed in this document is determined by the parent organization independently.

It is advisable to provide in the Regulations, at a minimum, the following sections:

• goals, objectives and functions of the branch (representative office);
• types of activities performed;
• management bodies of the branch (representative office);
• sources of property formation;
• the procedure for interaction with the bodies of the parent organization;
• control over the activities of the branch (representative office).

Taxes of a branch, representative office and separate division

If there are taxes pay parent organization, then the branch, representative office and separate division do not need to register with local funds: MHIF (Compulsory Health Insurance Fund), PFR (Pension Fund of Russia), FSS (Social Insurance Fund).

Otherwise, an application for registration with the Compulsory Medical Insurance Fund, Pension Fund, Social Insurance Fund at the location of the branch, representative office or separate subdivision is submitted no later than 30 days from the date of creation of the branch, representative office or separate subdivision. For failure to comply with the deadline - a fine of 5,000 rubles.

Legal entities, during their activities, create branches, representative offices, or other separate divisions that are located outside the place of registration of the parent company.

There are two most common forms of separate divisions - branches and representative offices. It should be noted that when opening a branch or representative office, it is necessary to make certain changes to the constituent documents by applying the procedure registration of changes in the Unified State Register of Legal Entities.

The purpose of a branch and a representative office has significant differences. The branch performs all the functions of the company and representative functions, and the representative office, in turn, represents the interests of the legal entity and implements their protection. Their state registration as legal entities is not provided for by law. The fact is that branches and representative offices are not a separate legal entity, but only a separate division of these same legal entities. Therefore, it is necessary to make changes to the constituent documents of the parent organization. The branch conducts its economic activities exclusively on behalf of the organization that founded it; it is endowed with property, but is not the owner of the property.

The Civil Code of the Russian Federation also does not prohibit organizations from forming separate divisions of other types. They are called “Separate Division”. These are suborganizations that are equipped with stationary workplaces, i.e. are created for a period of more than 30 days. At the same time, the formation of a separate division is not reflected in the organization’s constituent documents.

The decision on the formation of any form of division of a joint stock company is made by the Board of Directors, and in an LLC - by the General Meeting of Participants. Heads of departments are appointed by the organization. They act on the basis of a power of attorney, which is issued to the name, and not to the branch, representative office or separate division as a whole.

You need to find out from the territorial tax authority about the detailed list of documents required for registering any form of a separate division. Within a month from the date of foundation of a separate division or termination of its activities by the organization, managers must report this in writing to the tax authority.

All branches, representative offices, and separate divisions can be conditionally divided into two main types: allocated and not allocated to a separate balance sheet.

If the number of operations and employees is insignificant, then accounting is maintained without being allocated to a separate balance sheet. They usually do not have their own bank account. The branch is provided with monetary and material resources by the parent organization. In this case, the branch does not have an accountant on its staff.

Separate divisions allocated to a separate balance sheet have a personal accounting department with a chief accountant. The chief accountant processes, systematizes and stores primary documentation, conducts all operations and prepares financial statements for a separate division.

Therefore, when choosing the form of a separate division, you need to decide whether it is necessary to add data to the constituent documents. We remind you that they are added only when branch registration and registration of a representative office only after purchasing a certificate of changes, the branch can be registered with the territorial tax office. When choosing this form, it is not allowed to use the simplified taxation system. The formation of a separate division in this case is much easier: it is enough to register with the tax authority, and you can use the “simplified” procedure. At the same time registration of a branch of a foreign company on the territory of Russia it is necessary to take into account its own characteristics.