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Edict on business registration, liquidation procedures signed

The President of the Republic fo Belarus signed the Edict No. 2 as of 24 January. The document amended the Edict No. 1 as of 16 January 2009, which regulates the state registration and liquidation (termination of operation) of economic operators.

The document has been adopted for the sake of improving the procedures of the state registration and liquidation (termination of operation) of commercial and non-commercial corporations as well as self-employed businessmen. It will also help to protect rights of investors and creditors.

The Edict introduces several restrictions meant to prevent possible abuses by dishonest economic operators. In particular, new business entities cannot be established by property owners (founders, participants) of commercial organizations, against which the decision on liquidation has been made but the liquidation process has not been completed. The maximum time an economic operator can be involved in the liquidation process has been limited to nine months since the decision on liquidation has been made, with the right to extend the term up to 12 months available.

The present Edict provides for making responsible the chairman of the liquidation commission (the liquidator), the owner of the property (founders, participants) for violating the legislation resulting in the shutdown of a legal person without using the bankruptcy procedure. The number of persons, who can head a liquidation commission (be the liquidator) is restricted if the business entity that has to be liquidated has accounts payable to creditors. Thus, the position of the chairman of the liquidation commission (the liquidator) cannot be held by owners of the property (founders, participants), the chief executive officer of the legal person.

For the sake of optimizing the establishment of companies the Edict provides for forming the authorized fund by commercial organizations within one year since the state registration day unless specified otherwise by the legislation or unless a shorter term to establish the authorized fund is specified by the charter.

The Edict now regulates the use of the term “private” in names (legal names) of unitary enterprises. The term can now be used only by unitary enterprises that have been established by natural persons.

Unitary enterprises, which property is in private ownership of legal persons and which names (legal names) contain an indication to the form of ownership, will have to make the relevant amendments during the next correction of their charters but not later than one year after the decree comes into force.

Apart from that, the document revised the regulations on the state registration and liquidation (termination of operation) of business entities.

The Edict enters into force three months after its official publicaton.