Establishment of a branch in Belarus

• Decision to create a branch
• Making changes to the charter
• Approval of the branch regulations
• Power of attorney to the head of the branch
• Registration
• Opening a bank account

A branch is a separate subdivision of a legal entity. Unlike a representative office, a branch is not only a legal representative of the company when concluding transactions, but can also carry out business activities at its separate location. When deciding to expand a business, there is a choice between opening a branch or a subsidiary. The advantage of the branch will be the ease of creation and, subsequently, closure, the ability to monitor the activities of the head of the branch. At the same time, it should be understood that the property of the branch, although in a certain sense, is also separate, but not to the same extent as the property of a newly created legal entity. This means that even if the branch itself is solvent and profitable, the financial problems of the parent organization will certainly hit the branch.

Step 1. Making a decision to create a branch.

The decision to establish a branch is made by the supreme management body of a commercial organization (the founder of the enterprise, the sole participant of the LLC or the general meeting of participants). The decision on the establishment and liquidation of branches may be attributed to the competence of the Board of Directors (Supervisory Board). This decision determines its name, location other than the location of the parent organization, and also approves amendments and additions to the constituent documents in the form of an appendix to the charter or its new edition. Also, the decision may determine the main activities of the branch, as well as contain instructions about the head of the branch. However, it should be understood that the approval of the regulations on the branch and the appointment of the head is within the competence of the head of the legal entity.

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Step 2. We are making amendments and additions to the charter.

Based on the decision of the management body of the legal entity authorized to make a decision on the establishment of a branch, the head of the legal entity registers amendments and additions to the charter by submitting an application for registration, a Sheet B (branch questionnaire), as well as a new version of the charter (appendix) in duplicate and on a disk in *.doc format. For amendments to the charter in connection with the establishment of a branch, a fee of 2 basic units is paid (as of 01.01.2017).

Usually an indication of the establishment of a branch in the constituent documents contains information about the name and location of the branch. Information about the head of the branch and its functions are not included in the charter.

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Step 3. Approval of the regulations on the branch.

The head of the legal entity (parent organization) approves the regulations on the branch. The legislation does not approve a mandatory list of information included in the regulations on the branch of a commercial organization of private ownership. However, it usually contains information about the name of the branch, its location, the main activities, the powers of the head, the order of relations between the branch and the parent organization. The regulations on the branch are not registered.

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Step 4. We issue a power of attorney to the head of the branch.

Do not forget that the head of the branch does not have the authority, based on the fact of the position held. This shows his difference from the head of the parent organization. The head of the parent organization issues a power of attorney to the head of the branch on the basis of civil legislation. You should carefully consider the wording of the powers in this power of attorney. Since the absence of certain powers in it cannot be compensated either by the presence of appropriate powers in the regulations on the branch, or by their presence in the decision of other management bodies of the legal entity. The issuance of a power of attorney to the head of a branch may not be delegated to other management bodies of a legal entity. This is the difference between the power of attorney for the head of the branch and the regulations on the branch.

At the same time, we should not forget that the head of the branch must be an employee of a legal entity. Accordingly, his rights and obligations should also be reflected in the employment contract and job description. In case of disputes with the head of the branch as an employee, it is these documents, and no longer a power of attorney, that will have a legal value.

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Step 5. Registration.

Legal entities are obliged to inform the tax authority at the place of registration about the establishment of a separate subdivision of the organization no later than ten working days from the date of establishment of the branch. In connection with registration with the tax authority, you should also not forget about the need to get a book of comments and suggestions. Branches allocated to an independent balance sheet are also subject to registration with the FSZN bodies. The terms of registration with the FSZN are not set, but it is recommended to resolve this issue within a month after the opening of the branch. Here we can give an analogy with the fact that the registration period in the Belgosstrakh is set as 1 month.

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Step 6. Open a bank account.

The branch has the right to open a separate settlement account in a Belarusian bank, but this is not an obligation. This issue can also be settled in the regulations on the branch. To open an account, the bank usually requests a copy of the charter of the parent organization, a power of attorney for the head of the branch, the regulations on the branch. However, the exact list of documents must be clarified at the bank where the account is opened. Since, despite the content of the instructions in the legislation (Decree of the President of the Republic of Belarus No. 1 of 16.01.2009) regarding the documents required to open an account, banks require a list of documents that they independently establish. It should be remembered that at the time of opening a bank account, registration with the tax authorities must be completed. Even if the bank does not require to provide a notice of registration with the IMNS.