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Legal address

10.06.2015

Legal address: what is it and what address to choose?

Current legislation does not explain the exact interpretation of the term “legal address”.. It defines the term “location of legal entity” as a location of executive bodies of the company, determined by the state registration in the founding documents.

Legal address of the company is important for the determination of a tax inspectorate,  which will be controlling the company for correct tax payments. Prior to the state registration of a company, you need to have a draft agreement establishing a legal address of the company with the owner of the chosen office space.. After the company registration, you should have the corresponding agreement executed.

It is necessary to choose a legal address with a guarantee of its existence and the possibility to prolongate the contract.

The main factors for selecting a legal address are frequently the following:

  1. Proximity to the location of your company or your accounting company.
  2. Presence of informal friendly relationships in a particular tax inspectorate.

There are several methods to chose a suitable legal address for registering a new company:

  1. 1. Registration at the home address of a participant (shareholder)

In order to register the company at someone’s home address (shareholder address) it is necessary to:

  1. Obtain consent of all adult members of the family that resides at this address.
  2. Obtain a copy of the financial account statement.
  3. Obtain an extract from the “house book”.

Remember that a company registered at someone’s home address has to obtain an additional registration as a small enterprise and the tax inspectorate may hold internal inspections of the deignated residence..

2. Registration at an actual address

It is possible to find a real office and to agree with the owner of the premises to use this address for the company registration.

In that case, you have to check several points:

  1. The owner must posses all documents confirming his ownership rights (certificate of ownership, etc.).
  2. The owner must be registered in the tax inspectorate that controls this address.
  3. In the event you will receive the address from a person wishing to sublease the premises, you must check the lease contract and obtain a written consent of the owner to sublease the premises. In the event the owner is a state entity, it might be hard for you to obtain any consent at all.

3. Purchase of a legal address

Purchasing a legal address is convenient for those businessmen, who do not want to rent expensive apartments and/or  would like to choose the most amicable tax inspectorate in order to exclude frequent inspections. Such a contract provides a businessman with a legal address, but other obligations of the Parties remain only on paper and do not come into force. There are several forms of contracts that can be applicable for obtaining a legal address:

  1. Lease contract (sublease contract). Under a contract of lease, the Lessor undertakesresponsibility to grant temporary possession and temporary use of property to the Lessee for a compensation. And as a consequence, provide the Lessee with a legal address.
  2. Cooperation agreement, contract on joint activity, or simple partnership contract. Subjects of these contracts are different, but they all establish among other obligations the provision of a legal address.
  3. Contract on provision of a legal address. This form is the most convenient form because the subject of the contract directly establishes the use of a legal address.

Typically, state authorities send correspondence to the legal address of a company. Thus, from the very beginning it is necessary to pay attention to post services, which can be purchased additionally with the legal address.

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