Creating and developing a business in Belarus requires a deep understanding of the legal framework governing entrepreneurial activity. An important aspect of business organization is the question of who can and cannot be the company’s founder. These rules are important for registering a company and ensuring honesty, transparency and stability in the market. In this article, we will look at who can become the founder of a legal entity in Belarus, what restrictions and prohibitions exist for persons who wish to open a company and the consequences of opening a company by improper founders. Understanding these nuances will help entrepreneurs avoid legal problems and make informed decisions when creating their business.
Who can Open Companies in Belarus
Individuals and organizations, both residents and non-residents of Belarus, can open companies in Belarus. Founders – individuals can be citizens of Belarus, foreign citizens and stateless persons. They must be of legal age (over 18) and fully capable (they have not been assigned guardians).
The company officially opens after its state registration. At the time of applying for its state registration, the persons who open a company are called “founders.”
The composition of the founders of the company can be diverse:
- Only individuals.
- Only organizations (legal entities).
- Individuals and organizations.
Why is it Important to Understand Who Cannot be the Founder of a Company
There are several reasons why it is important to understand who can and who cannot be the founder of a company in Belarus:
1. Legal Restrictions
In Belarus, several legal norms determine who cannot be a founder. For example, minors, persons with limited legal capacity or those who have previously been convicted of serious crimes. It is important to know these rules to avoid problems when registering a company.
2. Compliance with Legal Norms
Failure to comply with requirements may lead to refusal of company registration and other legal consequences. If the founders do not meet the requirements, this may result in a loss of time and resources for document preparation.
3. Responsibility
The founders are legally responsible for the company’s actions. If a founder is a person who does not have the right to be a founder, this creates legal consequences for both the company and other founders.
4. Creditworthiness
The bank or other financial organizations can check the founders for restrictions. The presence of a founder who does not meet the requirements may negatively affect the possibility of obtaining loans or other forms of financing.
5. Company Management
Understanding the legal status of potential founders allows you to better organize the company’s management and determine who can really make decisions and be responsible for their consequences.
6. Business Sustainability
The wrong choice of founders can threaten the stability and reputation of the business, which can further affect its development and success.
Thus, awareness of who cannot be the company’s founder helps ensure the legitimacy and sustainability of the business, minimize risks, and comply with legal norms. Let’s take a closer look at the requirements for founders and prohibitions on founding.
Requirements for Founders of Companies
The state imposes certain requirements on company founders. These requirements can be found in the application for state registration of a company (but not all restrictions apply), or you can consult our experienced lawyer about state registration of companies.
The founder (or representative of the founders) who fills out the application for state registration must ensure that he meets these requirements. Company founders are responsible for the accuracy of the information they prescribe in the documents for state registration.
Consequences of False Information about the Founders
The company will not be registered if the founder indicates false information in the documents submitted for state registration. If the inaccuracy is found after the state registration, it will be declared invalid in court. It will lead to financial problems (all the company’s revenue will be charged to the budget) and problems with the business reputation (the company will be liquidated), and fines from government agencies and prosecution of the founders may follow. Therefore, before registering a company, we recommend that you get advice from our experienced lawyer on state registration and the compliance of future founders with the requirements imposed on them by the state.
When Individuals Cannot be Founders of a Company
Companies cannot be opened in Belarus by persons under 18 or with limited legal capacity.
Adults and capable persons cannot be founders when:
1. Have an outstanding criminal record for crimes against property and the procedure for carrying out economic activities.
2. They have an unfulfilled court order that has entered into legal force regarding the collection of funds from them and (or) foreclosure on other property, an executive inscription regarding the collection of taxes, fees (duties) and penalties from them, arrears on mandatory insurance premiums, and penalties to the budget of the state extra-budgetary fund for social protection of the population of the Republic of Belarus.
3. As of the date of state registration, they are the owners of the property (participants) and the heads of the company who are in liquidation and have not completed the liquidation process.
4. As of the date of state registration, they are the owners of the property (participants) and the heads of the company for which the court has initiated bankruptcy proceedings.
5. On the date of state registration, they were the owners of the company’s property (participants). An individual entrepreneur whose debt was recognized as a bad debt and written off. Less than three years have passed since the date of exclusion from the Unified State Register of Legal Entities and Individual Entrepreneurs.
6. The owners of property (participants), the heads of a debtor company recognized as economically insolvent or (bankrupt, and less than a year has passed since the date of its exclusion from the Unified State Register of Legal Entities and Individual Entrepreneurs.
7. Have restrictions on applying for state registration in connection with recognising state registration as invalid.
8. The State or the court has established other prohibitions and restrictions on applying for state registration.
9.Civil servants, military personnel, law enforcement officers and similar organizations.
10. Former employees of the Hi-Tech Park of Belarus resident companies, with whom the employers have concluded a non-competition agreement (NCA). During the period prescribed in the NCA (up to 1 year), such people cannot be founders of competitive companies with a former employer. Otherwise, the former employer may collect fines from such persons provided for by the NCA in court.
When Organizations Cannot be Founders of a Company
A representative of the founding company who fills out an application for state registration must provide reliable information in the application. If later it turns out that the information is unreliable, there will be negative consequences for both the company and the founder. Here is a list of situations when a company cannot act as a founder:
1. The company is in the process of liquidation or bankruptcy.
2. A foreign company has not submitted documents in its legal capacity (a legalized extract from the commercial register of the state in which the company is located or a similar document).
3. When applying for state registration of a joint-stock company, the founders (including companies) have restrictions established by the state for state registration of business entities.
4. A private unitary enterprise cannot be a founder when there is no consent of its owner to establisha new company by a unitary enterprise.
5. In relation to the company, an unfulfilled court order has entered into force to recover money and other property.
6. As of the date of state registration, the company is the property owner (participant) of the company, in respect of which a decision on liquidation has been made. Still, the liquidation process has not been completed.
7. As of the date of state registration, the company is the owner of the property (participant) of the company in respect of which bankruptcy proceedings have been opened (the company is in bankruptcy proceedings).
8. As of the date of state registration, the company is the owner of the property (participant) of the company, whose debt was recognized as a bad debt and written off. At the same time, less than three years have passed since the date of exclusion of such a company from the Unified State Register of Legal Entities and Individual Entrepreneurs.
9. On the date of state registration, the company was the owner of the property (participant) of a debtor legal entity declared bankrupt; less than a year has passed since its exclusion from the Unified State Register of Legal Entities and Individual Entrepreneurs.
10. The State or the court has established other prohibitions and restrictions on applying for state registration.
11. State organizations and companies with a share of state ownership cannot be founders unless they have passed the approval procedure with their higher-level organizations and state bodies.
Exceptions for Hi-Tech Park Residents
Individual entrepreneurs and resident companies of the Hi-Tech Park have the opportunity to be founders of new companies until the liquidation process is completed and the company’s founders and managers are bankrupt.
Also, residents of the Hi-Tech Park are not subject to a one-year ban on becoming founders of new companies after bankruptcy and exclusion from the Unified State Register of Companies in which they were founders, owners, and managers.
Conclusion
To start and do a business successfully, it is important to understand who can and cannot be the founder of a company in Belarus. Compliance with legal norms minimizes the risks of registration refusals and legal consequences and contributes to creating a stable and reliable company.
It is important to remember that restrictions on the status of founders are aimed at protecting the interests of all market participants and ensuring business stability. Therefore, before proceeding with the registration process, future founders should carefully study the legal requirements or seek advice from our experienced lawyer or attorney. It will save you from making mistakes when creating a company and help lay a solid foundation for its further development and prosperity in the dynamic economic environment of Belarus.
Contact us
If you have any questions or disputes regarding register as an individual entrepreneur or a legal entity in Belarus, we will be happy to help! Our long-term experience in divident payment will help you resolve any disputes in this area.
- +37529142-27-19 (WhatsApp, Viber, Telegram);
- info@ambylegal.by.
