On July 14, 2015, Federal Law No.246-FZ “On introducing amendments to Federal Law ‘On protection of rights of legal entities and individual entrepreneurs when exercising state control/supervision and municipal control’” (“Law No.246-FZ”) entered into effect to reduce administrative load on small business.

Who will not be subject to inspection?

Law No.246-FZ prohibits scheduled inspections of small businesses from January 1, 2016 to December 31, 2018. However, the prohibition does not apply to small businesses engaged in certain types of activities, e.g. in the field of health care, education, heat supply and energy conservation.

That said, any small business can be included in the annual inspection plan, if within the last three years it was held liable for a material violation or if a decision was made to suspend and/or cancel its license for certain type of activities.

What is a risk-oriented approach?

As a general rule, a risk-oriented approach will apply to arrangement of state control/supervision starting from January 1, 2018. This approach assumes that the intensity of control measures applicable to activities of a legal entity or individual entrepreneur depends on whether such legal entity or individual entrepreneur falls under a certain risk category or hazard class.

How to identify small and medium-size businesses?

On July 13, 2015, the Russian Government adopted Resolution No.702 “On thresholds of profit from selling goods (or works, or services) for each category of small and medium-size businesses” (the “Resolution”).

According to the Resolution, thresholds of profits used for classifying legal entities as small or medium-size businesses are changed as follows:

• 120 mln rubles for micro businesses;
• 800 mln rubles for small businesses;
• 2 bln rubles for medium-size businesses.

Therefore, there are now substantially more entities that are entitled to exercise rights granted to small businesses. 

Anastasia Fomicheva   Senior Associate   St. Petersburg    afomicheva@cls.ru   Tel.: +7 (812) 346 79 90

Tatiana Strakhova   Associate    St. Petersburg       Tel.: +7 (812) 346 79 90

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Anastasia Fomicheva  or  Tatiana Strakhova, St. Petersburg Office of Capital Legal Services.

This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.