Branch, representative office, "isolation": choose the best option. Distinctive features of the branch as a separate division

19.10.2018

Many companies pursuing the goal of expanding their business, in practice, face the problems of choosing the right form of fixing the legal status of an additional office or workshop. What should you choose - a branch or a representative office? What are the differences between them and how do these forms differ from other separate divisions? Or maybe it's the same thing? This article will help you to understand the differences between branches, representative offices, other separate divisions, highlight their main features and help you choose the right form of doing business, not forgetting about the specifics of the company's taxation regime.

Definition of terms

First of all, we will make a reservation that the composition of the terminology of civil and tax law is different. In the Tax Code of the Russian Federation (hereinafter referred to as the Tax Code of the Russian Federation, the Code) there is no definition of the concept of a branch, as well as the concept of a representative office. At the same time, Article 11 of the Tax Code of the Russian Federation indicates that the institutions, concepts and terms of the civil and other branches of the legislation of the Russian Federation used in the Code are applied in the sense in which they are used in these branches of legislation, unless otherwise provided by the Code. Therefore, we will use these terms for tax purposes in the sense in which they are used in civil law.

The concepts of "branch" and "representative office" are given in Article 55 of the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code of the Russian Federation). According to the provisions of this rule, a representative office is a separate subdivision of a legal entity located outside its location, which represents the interests of the legal entity and protects them.

A branch is a separate subdivision of a legal entity located outside its location and performing all or part of its functions, including the functions of a representative office.

Based on the definitions, we can conclude that the main difference between a branch and a representative office is their functional purpose: a representative office only represents the interests of a legal entity in its relations with participants in civil circulation, for example, it performs the functions of negotiating and subsequent conclusion of transactions, as well as protecting the interests of the organization in the judiciary.

The branch also represents the interests of the legal entity, i.e. including acts of representation. In addition, the branch performs all or part of the functions of a legal entity. In other words, the branch not only negotiates and makes transactions on behalf of the legal entity, but also performs actual actions aimed at fulfilling the concluded agreements, i.e. conducts production, trade or other activities carried out by the legal entity itself. At the same time, a branch can perform all types of activities of the organization, or some of them.

General signs of a branch and representative office

Having considered both concepts, we can identify features that are similar for both a branch and a representative office. The first and perhaps the most defining feature is that neither a branch nor a representative office are legal entities, i.e., independent participants in civil circulation, but enter into civil, labor, tax and other legal relations on behalf of the legal entity that created them . In practice, this sign is reflected in the following:

transactions on behalf of a branch or representative office are concluded by the legal entity itself;
it is also responsible for the obligations arising in connection with their activities;
branches and representative offices cannot act as plaintiffs and defendants in court, i.e. cannot participate in court proceedings on their own behalf.

Here is how the Presidium of the Supreme Arbitration Court of the Russian Federation (hereinafter referred to as the Supreme Arbitration Court of the Russian Federation) comments on this issue in the Information Letter dated May 14, 1998 N 34 "On Consideration of Claims Arising from the Activities of Separate Subdivisions of Legal Entities": "... a separate subdivision that is not a legal entity, may bring a claim only on behalf of a legal entity ... A power of attorney (or a copy thereof) of a legal entity confirming its authority to sign a statement of claim on behalf of a legal entity must be attached to the statement of claim signed by the head of a separate subdivision.

In the absence of such a power of attorney, the statement of claim is returned without consideration, on the basis of paragraph 2 of part 1 of Art. 108 APC RF".

A similar conclusion is contained in the Decree of the Plenum of the Supreme Court of the Russian Federation and the Plenum of the Supreme Arbitration Court of the Russian Federation of June 11, 1999 N 41/9 "On Certain Issues Related to the Enactment of Part One of the Tax Code of the Russian Federation." By virtue of paragraph 9 of this Decree, branches and representative offices of Russian legal entities are not considered as participants in tax legal relations and do not have the status of taxpayers, tax agents and other liable persons. Responsibility for failure to fulfill all obligations to pay taxes, fees, penalties and fines shall be borne by the legal entity, which includes the relevant branch (representative office).

Guided by this legal position, the Federal Antimonopoly Service of the Moscow Authority in its Decree of April 15, 2009 No. KA-A40 / 1708-09 noted that branches are not subjects of tax legal relations, therefore, they cannot be held liable for tax liability, since they are liable for actions (inaction) of branches, only a legal entity can be involved.

The problem of territorial isolation

Territorial isolation, or location outside the location of the organization, is also an important defining feature of both a branch and a representative office. In accordance with paragraphs 2 and 3 of Art. 54 of the Civil Code of the Russian Federation, the location of a legal entity is determined by the place of its state registration and is indicated in its constituent documents.

In the 90s and "zero" there were fierce disputes between lawyers about what is the "location" of a legal entity? Some believed that this was a specific address, i.e. settlement, street, house, office where the permanent executive body of the legal entity is located, or in its absence - another body or person entitled to act on behalf of the legal entity without a power of attorney, information about which is contained in the Unified State Register of Legal Entities (hereinafter - Unified State Register of Legal Entities). In accordance with this assumption, territorial isolation means that if a company's additional office is located in the same locality, on the same street, and even in the same building as the legal entity that created them, but in a different location, they can safely be treated on this basis as branch or representative office.

Other lawyers believed that the location of a legal entity should not be considered a specific postal address contained in the Unified State Register of Legal Entities, but belonging to a specific subject of the Russian Federation (for example, St. Petersburg, Moscow, Saratov, and so on).

This dispute was resolved only in 2015, when the legislator adopted Law No. 209-FZ of 06/29/2015. This normative act amended the Civil Code of the Russian Federation and established that the location of the legal entity is specific locality(municipal formation) on the territory of the Russian Federation. In turn, the Unified State Register of Legal Entities indicates the address of the legal entity within its location.

Thus, territorial isolation, as a sign of a branch or representative office, means that a legal entity can create them only outside its location, i.e. outside the settlement (municipal formation) where the parent company is registered.

Issues of property isolation

The property isolation of branches and representative offices, as their next important feature, means that, firstly, they have the right to own and use property allocated by a legal entity to a separate balance sheet, and secondly, they have the right to have a separate current account.

However, about the "separate balance of a separate division" is not so simple. Legislation does not know such a term at all. In practice, it is understood as a document with reporting information on the activities of an economic entity, as well as a method of accounting for indicators that allows them to be correlated with each other. Paragraph 8 of PBU 4/99 “Accounting statements of an organization” states that such reporting should contain performance indicators of all branches. And hence the conclusion - branches do not form separate statements and do not draw up a separate balance sheet. Therefore, when regulations speak of a “separate balance sheet”, they simply mean a list of indicators that a legal entity has established for its divisions allocated to a “separate balance sheet”.

In addition, branches and representative offices only actually own and use the property (and funds) allocated to them by the organization. They do not have the right of disposal, operational management or economic management - real and liability rights to them.

Heads of branches and representative offices

Branches and representative offices are organizationally separated from the legal entity that created them. This means that their leaders are appointed by a legal entity and act on the basis of a power of attorney issued to them. The Supreme Arbitration Court, and later the Supreme Court, repeatedly emphasized this point. So, on June 23, 2015, the Plenum of the Supreme Court of the Russian Federation adopted Decree No. 25, in which it once again explained that the main powers of the head of a branch (or representative office) are confirmed only by his power of attorney, and not by the position or constituent documents of a legal entity.

It is interesting that back in 1996, paragraph 20 of the Resolution of the Plenum of the Supreme Court of the Russian Federation and the Plenum of the Supreme Arbitration Court of the Russian Federation dated 07/01/1996 N 6/8 "On some issues related to the application of part one of the Civil Code of the Russian Federation" indicated that: "When resolving a dispute, arising from the agreement signed by the head of the branch (representative office) on behalf of the branch and without reference to the fact that the agreement was concluded on behalf of the legal entity and by its power of attorney, it should be clarified whether the head of the branch (representative office) had the appropriate powers at the time of signing the agreement, expressed in the branch regulations and powers of attorney. Transactions made by the head of a branch (representative office) in the presence of such powers should be considered made on behalf of a legal entity.

A little less than 20 years have passed and the Supreme Court, explaining this point, considered it necessary to remove the phrase "in the regulation on the branch." Thus, he additionally stressed that the powers of the head are confirmed only by a power of attorney.

Regulations on the branch

Branches and representative offices act on the basis of a separate document (Regulations), which is an internal document of the organization (i.e. not subject to state registration) and is approved by the body whose competence includes making a decision on the establishment of a branch or representative office. It should be noted that any requirements for the content of the Regulations are not established by law.

Mandatory reflection of information about branches and representative offices in the Unified State Register of Legal Entities

Until 2015, business entities were required to indicate information about branches and representative offices in the Charter. As a result, 1/3 of the constituent document of any large federal company consisted of a long list of branches and their addresses, and changes were made to the Charter every six months.

Given this fact, the state changed this procedure. Currently, the legislation requires that information on branches and representative offices be contained only in the Unified State Register of Legal Entities. Information about them may not be included in the Charter (Article 55 of the Civil Code of the Russian Federation).

Creation of branches and representative offices

We examined the main features that characterize branches and representative offices, and distinguish them from legal entities. Now let's turn to the issue of securing the legal status of a branch and a representative office - let's talk about registering their creation. As we said above, information about branches should now be indicated only in the Unified State Register of Legal Entities. But this does not mean that it is necessary to immediately exclude this information from the current charters. The new rules apply only to branches and representative offices established after 09/01/2014.

Today, to open a branch or representative office, you need to go through the following steps:

decide on the establishment of a branch/representative office by the competent authority determined by law and the charter;
appoint in a decision (minutes, or in an order) the head of a branch or representative office;
fill out an application in the form P13001 or P14001 and certify it with a notary. (We discussed the problem associated with the use of one form or another in some detail in a separate article. Those who wish can familiarize themselves with it on our website;
submit documents to the registration authority at the place of its location.

Registration, accounting of changes in information, deregistration of the organization with the tax authority at the location of the branch and representative office are carried out on the basis of the information from the Unified State Register of Legal Entities. This means that after making changes to the Unified State Register of Legal Entities, in connection with the creation of a branch or representative office, the registering authority transfers a file containing the relevant information via electronic communication channels to the tax authority at the location of the organization, and that, in turn, to the tax authority at the place establishment of a branch or representative office. The latter is given five days for tax registration of the organization at the location of its branch or representative office.

From what moment should a branch or representative office be considered established? The answer to this question can be found in the Letter of the Department of Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation dated December 16, 2009 No. 03-02-07 / 1-541: the date of creation of a branch (representative office) of an organization is the date of entering information about it in the Unified State Register of Legal Entities.

Separate division in tax law

We examined the similarities between a branch and a representative office and the differences between them, determined the procedure for registering them. Now it is worth talking about another concept used in legislation and in practice, namely, a separate division of a legal entity.

The semantic content of the concept of "separate subdivision" used in tax legislation is wider than in civil law. In accordance with Article 11 of the Tax Code of the Russian Federation, a separate subdivision of an organization is any subdivision that is territorially isolated from it, at the location of which stationary workplaces are equipped. A separate subdivision of an organization is recognized as such regardless of whether or not its creation is reflected in the constituent or other organizational and administrative documents of the organization, and on the powers vested in the specified subdivision. At the same time, the workplace is considered stationary if it is created for a period of more than one month.

Thus, the Tax Code of the Russian Federation distinguishes another type of separate subdivision of a legal entity, different from a branch and a representative office.

The difference between branches and representative offices from other separate divisions. The main feature of a separate division

We determined that branches and representative offices have a number of features that distinguish them not only from legal entities, but also from other separate divisions, namely:

location outside the location of the organization;
endowment of property by the organization that created them;
availability of information about them in the constituent documents of the legal entity and in the Unified State Register of Legal Entities;
the presence of a separate document (Regulations), duly approved, on the basis of which they operate;
appointment of their heads by the competent body of the organization and exercise of their powers on the basis of a power of attorney issued by the organization;
implementation of all functions of the organization or part thereof (for a branch);
representation of the interests of the organization and the implementation of their protection (for representative offices).

Moreover, the judicial authorities proceed from the fact that in order to qualify a separate structural unit as a branch or representative office, it is necessary to have all the features listed in Art. 55 of the Civil Code of the Russian Federation (Resolution of the Federal Antimonopoly Service of the Moscow District dated 04.07.2007 N KA-A41 / 5937-07-P). And the absence of at least one of them means that such a division of a legal entity cannot be recognized as a branch or representative office.

Based on their definition given in the Tax Code of the Russian Federation, a separate subdivision is characterized for tax purposes by the following features: the presence of jobs that are stationary, equipped, created outside the location of the organization itself for a period of more than a month, at the location of which the activities of this organization are carried out.

The presence of jobs is a fundamental feature of any separate structural unit, which allows you to determine whether the organization has an obligation to register it. A similar conclusion is contained in the Letter of the Ministry of Finance of the Russian Federation dated May 4, 2007 No. N 03-02-07 / 1-214: "From the meaning of the indicated provisions of paragraph 2 of article 11 of the Tax Code of the Russian Federation, in conjunction with articles 16, 20, 22 and 209 of the Labor Code of the Russian Federation (hereinafter referred to as the Labor Code of the Russian Federation), it follows that the main a sign of a separate subdivision of an organization is the implementation by this organization of activities in the Russian Federation outside its location, through a stationary workplace equipped for its employee. Art. 209 of the Labor Code of the Russian Federation defines a workplace as a place where an employee must be, or where he needs to arrive in connection with his work, and which is directly or indirectly under the control of the employer. Based on this rule, the Department of Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation has repeatedly indicated in its letters that if an organization has not created at least one stationary workplace for its employees, which is directly or indirectly under the control of this organization, the grounds for setting there are no tax records for this organization at the place of business (see Letter No. 03-02-07/1-211 of August 5, 2005 and Letter No. 03-02-07/1-212 of August 8, 2006).

Taxation of separate divisions

Differences between branches, representative offices and other separate structural subdivisions of a legal entity are of great practical importance for the purposes of taxation of the organization itself.

The point is that, according to 1 paragraph 3 of Art. 346.13 of the Tax Code of the Russian Federation, organizations that have branches do not have the right to apply the simplified taxation system. However, this prohibition does not apply to other separate subdivisions (including representative offices since 2015) established in compliance with tax legislation. Therefore, a taxpayer interested in having the right to apply the simplified taxation system should keep this rule in mind when creating a structural unit.

It is noteworthy that, despite the visible signs, the fact of creating a branch, and not a separate subdivision, the taxpayers managed to challenge in court, defending their right to apply the desired "simplification". When considering such cases, the courts proceeded from the following.

In order to apply the rules on the simplified taxation system, it is not enough just to fix the decision to establish a branch or representative office on paper. The company must perform specific actual actions aimed at carrying out activities through its branch or representative office. For example, in one case, the court noted that the company did not approve the Regulations on the branch, did not appoint its head, no property was transferred to the branch, not a single workplace was equipped for its functioning, the company did not register for tax at the location of the branch. The premises for the location of the branch at the address specified in the supplements to the constituent documents of the Company were not transferred to the use of the company by the owner, and the lease agreement was not concluded either.

In addition, the court clarified that from the provisions of paragraphs. 1 p. 3 art. 346.12 of the Tax Code of the Russian Federation it follows that the right to apply the simplified taxation system is not granted only to those organizations that actually have separate subdivisions endowed with all the functions of a branch and formed in accordance with the requirements of civil law. In this case, the division indicated in the company's constituent documents does not actually exist, and therefore the company cannot be considered as having a branch. The introduction of amendments to the constituent documents relating to the creation of a branch, in the case when the branch has not actually been created, cannot in itself indicate a company's non-compliance with the requirements established in paragraphs. 1 clause 3 article 346.12 of the Tax Code of the Russian Federation (Decision of the Arbitration Court of the Kemerovo Region in case No. А27-16080/2017 dated 03.11.2017).

In another case, the court came to the conclusion that the separate subdivision created by the company, in essence, does not have the signs of a branch, defined by Article 55 of the Civil Code of the Russian Federation, since it does not represent the interests of the company, the founders of the company did not endow it with the functions and powers provided for by the named article.

In addition to the absence of grounds for the loss of the right to apply the simplified taxation system, separate subdivisions, unlike branches, have one more advantage. It lies in the fact that registration of a separate subdivision is much easier than a branch or representative office. Firstly, this does not require the execution of an appropriate decision. Secondly, there is no need to enter information about a separate subdivision in the constituent documents and in the Unified State Register of Legal Entities. It is enough just to register with the tax authorities according to the rules of Art. 83 of the Tax Code of the Russian Federation. This exception is of particular relevance in the case of successive creation of several separate subdivisions within a short period of time, which saves both the time allotted to the registration authority for the performance of the state function and the state duty. Especially in those subjects where the mechanism for transferring data on the creation of branches and representative offices in accordance with the new rules has not yet been worked out, and it occurs with great delays.

In any case, even despite all the organizational simplicity of the design and operation of a separate subdivision, do not forget that modern business practices dictate the current rules of doing business and require its participants to legally fix the form of building business relations.

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All domestic legal entities have the opportunity to open one or more separate divisions. These are both branches and representative offices, as well as other divisions, for example, stationary workplaces. The procedure for their opening and the requirements for them, as well as their definitions, are sufficiently described in the current legislative acts of Russian law. Let's try to figure out the difference between a branch and a separate subdivision.

General provisions on separate divisions

The Civil Code of the Russian Federation allows the creation and existence of legal entities that, along with other business entities, take part in entrepreneurial activities or are created to achieve specific goals (Article 48 of the Civil Code of the Russian Federation).

All organizations of the Russian Federation have the right and have the ability to create separate subdivisions (Article 55 of the Civil Code of the Russian Federation). It is important to consider that separate subdivisions are not legal entities and lack the legal capacity inherent in legal entities.

It must be remembered that a separate subdivision must be located at an address different from the address of the main organization, and have stationary jobs, i.e. jobs created for a period of more than one month (Article 11 of the Tax Code of the Russian Federation). A separate subdivision of a legal entity is a branch, representative office or stationary workplace (Article 55 of the Civil Code of the Russian Federation and Article 11 of the Tax Code of the Russian Federation).

Information about each separate subdivision, with the exception of stationary jobs, is indicated in the unified state register of legal entities, for which the organization creating them must submit completed applications to the tax inspectorate according to approved forms No. P13001, No. P13002 or No. P14001.

Types of separate divisions

Civil law names two structural divisions: a branch and a representative office. Other structural divisions, isolated from the main organization, do not contain the norms of the Civil Code of the Russian Federation.

But the list of divisions that are separate from the main organizations is also contained in other legislative acts.

Thus, the tax legislation directly indicates the possibility of recognizing as separate parts of the main organization any territorially separate structure that has stationary jobs.

A workplace, including a stationary one, is a place that is controlled by the organization and in which the employee performs his labor functions (Article 209 of the Labor Code of the Russian Federation).

At the moment, the list of structures that can be recognized as separate entities is open and is not limited to a branch and a representative office.

Each type of structural units has not only its own distinctive features, but also common ones.

Let's try to figure out what is the difference between a branch and a separate subdivision.

Branch Differences

The concept of a branch is enshrined in paragraph 2 of Art. 55 of the Civil Code of the Russian Federation, according to which the branch is not only geographically removed from the main organization, but also performs all or part of the functions of the main organization, and also performs the functions of a representative office.

It should be noted that the concepts of representation and branch are different. Such differences already follow from the definitions of both structural units, which are given in civil law.

Consider the main differences between a branch and a separate subdivision in the table below.

No. p / p	Characteristic features of the branch	Characteristics representative offices	Characteristics stationary workplace
1	Functions of a separate division
	Carries out all or part of the functions of the main organization. Performs representative functions.	Represents and defends the interests of the parent organization.	The employee carries out his labor activity at the workplace.
2	Possibility of commercial activity
	May conduct commercial activities.	Cannot conduct commercial activities.	Cannot conduct commercial activities. Only labor relations.
3	The need to notify the tax office of the creation
	There is no obligation to notify the inspectorate.	There is no obligation to notify the IRS.	It is necessary to notify the tax office within a month from the date of organization.
4	Reflection of information about a separate subdivision in the Unified State Register of Legal Entities
	Information is contained in the Unified State Register of Legal Entities.	Information is contained in the Unified State Register of Legal Entities.	Information in the Unified State Register of Legal Entities is not contained.
5	Creation order
		The decision of the owner of the organization.	Order of the sole executive body of the organization.
6	Possibility of independent accounting
		Can manage independent accounting.	Cannot keep independent accounting records.
7	Opportunity to open your own bank account
		Can open their own checking account.	Unable to open own checking account.

As can be clearly seen from the table, the differences between different types of separate structural units are much wider than just differences in names.

The differences existing between different types of structural units are of a fundamental nature and consist mainly in the functions for which the corresponding separate structural unit is created, as well as in order to achieve which the structural unit is created.

It should also be remembered that there are certain common features between separate structural units, for example, they are not legal entities, information about them does not need to be reflected in the charters of organizations, their heads can only act on the basis of a power of attorney, and the structural units themselves can only act on the basis of the provisions . Each separate subdivision must have stationary workplaces.

When making a choice between a branch or a separate subdivision, one should decide on the functions that the corresponding structure will perform, as well as the goals for which it is created. Moreover, the body of the main organization that makes the decision to open separate subdivisions also needs to take into account the following: whether it is planned to independently maintain accounting by separate subdivisions, and whether such subdivisions will be endowed with property and whether current accounts will be opened for them.

As a conclusion to this article, it can be noted that the right to choose a specific separate subdivision belongs exclusively to the organization that creates it. But when making a final decision on the form of a separate subdivision, it is simply necessary to study in detail the features of each of the possible ones.

Business expansion can be carried out through the creation of a separate division or branch of the company. What are they?

What is a separate division?

Under separate subdivision It is customary for a company to understand a structure belonging to it, which is located in another territory, has a staff and represents the interests of the main office. In a separate subdivision, there must be stationary jobs (created for a period of 1 month or more).

Information about the relevant structure does not have to be included in the constituent documents of the company. At the same time, firms that form separate subdivisions must register with the Federal Tax Service at the location of each of the local institutions. To do this, it is necessary to send a notification about the opening of a unit to the territorial structure of the Federal Tax Service. This must be done within 1 month from the date of creation of the relevant structure. Having received a message about the opening of a separate division of the company, the Federal Tax Service, within 5 days, registers the company on tax records in its territory and issues a notice of this to it.

In addition, within 1 month from the date of creation of a separate subdivision, the company must notify the Pension Fund and the Social Insurance Fund about this.

What is a branch?

Under branch It is customary for firms to understand the structure belonging to it, which, like a separate subdivision, is located in another territory. At the same time, it carries out activities that, in their content, fully correspond to the functions of the main office.

As in the case of a separate subdivision, the creation of a branch is carried out at the level of local regulatory legal acts of the company. However, this procedure, as a rule, is noticeably more complicated than the one that characterizes the establishment of structures of the first type. In particular, an executive hired under an employment contract (for example, a general director) cannot establish branches. In addition, at least 2/3 of the total number of votes of the company's owners must be given for the creation of a branch - if we are talking about an LLC. The charter of the company may provide for the creation of branches in accordance with decisions taken by the board of directors.

Unlike the establishment of a separate subdivision, the creation of a branch involves the indication of information about it in the charter of the organization. In addition, data on the relevant changes in the constituent document of the company must be transferred to the Federal Tax Service - so that the said body subsequently makes adjustments to the Unified State Register of Legal Entities. At the same time, tax authorities must also send copies of documents with the participation of which changes were made to the company's charter. Or - copies of the relevant constituent document. Based on the data on the branch of the company, which are entered by the Federal Tax Service into the Unified State Register of Legal Entities, the new local structure of the company is tax registered at its location.

Information on the creation of a branch, as in the case of a separate representative office, must be transferred to the FIU and the FSS.

The branch of the organization is required to have a head - he holds his position on the basis of a power of attorney issued by the head office, as well as upon the fact that the general director issues an appropriate decision. The authority to appoint the head of the branch may be vested in other management bodies of the company.

Comparison

The main difference between a separate subdivision and a branch is that information about the structure of the first type should not be entered into the constituent documents of the company and the Unified State Register of Legal Entities. In general, the establishment of a separate division is a simpler procedure than the creation of a branch. Above, we examined what this is - the need to make a decision on the formation of a branch at a meeting of founders, transfer copies of the charter or sources corresponding to it to the Federal Tax Service, and also appoint the head of the relevant structure.

At the same time, both local institutions under consideration have much in common. So, neither one nor the other is a legal entity independent of the head office. The property they use belongs to the main organization. Separate subdivisions of firms and branches are established, as a rule, for the same purposes - expanding the brand's representation, solving local problems related to business development.

Having determined the difference between a separate subdivision and a branch, we fix the conclusions in the table.

Table

Separate subdivision	Branch
What do they have in common?
They are structures legally dependent on the head office, created in order to solve approximately the same tasks
Information about the opening of both types of structures is transmitted to the Federal Tax Service (in the case of a separate subdivision, only in the form of a notification), the PFR and the FSS
What is the difference between them?
Information about the creation of a separate division is not reflected in the constituent documents of the company	Information about the creation of a branch is reflected in the constituent documents of the company
Can be created without approval at a meeting of founders	Created subject to approval by the meeting of founders
Does not require a leader	Requires the appointment of a leader

06.09.2010

Separate subdivision, branch or representative office?

Often legal entities, when conducting activities, are not limited to working at the address of registration of the organization, then they create branches, representative offices, separate divisions located outside the place of registration of the legal entity.

Referring to Art. 55 of the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code of the Russian Federation), two main forms of separate subdivisions can be distinguished, which are located outside the location of the organization, such are branches and representative offices. A branch differs from a representative office in its purpose: it performs all the functions of an organization or part of them, including the functions of a representative office. The representative office represents the interests of the legal entity and protects them.

However, the Civil Code of the Russian Federation does not restrict organizations in creating separate subdivisions of other types; such separate subdivisions are most often called “Separate subdivisions”. The concept of such a separate subdivision is contained in Art. 11 of the Tax Code of the Russian Federation (hereinafter - the Tax Code of the Russian Federation) - “any subdivision territorially isolated from it, at the location of which stationary workplaces are equipped. A separate subdivision of an organization is recognized as such regardless of whether or not its creation is reflected in the constituent or other organizational and administrative documents of the organization, and on the powers vested in the specified subdivision. At the same time, the workplace is considered stationary if it is created for a period of more than one month. All listed forms of separate subdivisions are not legal entities, they are structural subdivisions of the organization.

Features of the functioning of the branch / representative office are:

the branch/representative office conducts economic activity only on behalf of the head organization that created it;
responsibility for the obligations of the branch/representative office shall be borne by the legal entity that founded it (including in cases where the activities of the branch (representative office) are allegedly conducted not on behalf of the legal entity);
a branch/representative office may sue in the courts only on behalf of the organization;
state registration of a branch / representative office is not provided for by the current legislation, it is necessary to make appropriate changes to the constituent documents of the parent organization;
the branch/representative office is endowed with property by the legal entity that created it, while the branch (representative office) itself is not the owner of the property transferred to it;

The decision to create any form of a separate subdivision in a joint-stock company is taken by the Board of Directors (supervisory board), and in a Limited Liability Company such decision is made by the General Meeting of Participants. After the decision to establish a branch and (or) representative office has been made, appropriate changes must be made to the charter of the organization, since, in accordance with Art. 55 of the Civil Code of the Russian Federation, branches and representative offices must be indicated in the constituent documents of the legal entity that created them. A separate subdivision as a different type is not included in the constituent documents of the organization.

Heads of representative offices, branches, separate subdivisions are appointed by the organization and act on the basis of its power of attorney. It should be noted that a power of attorney defining powers is issued to the head of a branch, representative office, separate subdivision, and not to the branch, representative office or separate subdivision as a whole.

The document that regulates the activities of a branch and (or) representative office is the Regulations on the branch (representative office), the content of which is determined by the parent organization. Often the Regulations include the following sections: goals, objectives and functions, types of activities carried out, management bodies, sources of property formation, the procedure for interaction with the bodies of the parent organization.

As for a separate subdivision, in most cases, when registering, tax inspectorates do not require the provision of the Regulations.

In the territorial tax office, it is necessary to clarify the list of documents that are required to be submitted when registering any form of a separate subdivision.

In accordance with paragraphs. 3 p. 2 art. 23 of the Tax Code of the Russian Federation, taxpayers, within one month from the date of the creation of a separate subdivision or the termination of the organization's activities through a separate subdivision (closing of a separate subdivision), are required to notify the tax authority in writing about all separate subdivisions created on the territory of the Russian Federation. This message is submitted to the tax office at the place of registration of the organization.

It should be noted that the organization at the location of the branch (representative office) can open a bank account, the right to dispose of which is granted to the head of a separate subdivision.

All branches, representative offices, separate divisions can be conditionally divided into two main types: dedicated and not allocated to a separate balance sheet. Consider the features of each of them.

Accounting in separate divisions that are not allocated to a separate balance sheet.

In cases where the volume of transactions and the number of employees in branches, representative offices and separate subdivisions is insignificant, then accounting is kept without allocation to a separate balance sheet. As a rule, Separate Subdivisions that are not allocated to a separate balance sheet do not have a separate bank settlement account. All money and material resources they receive from the parent organization.

In this case, the branch, representative office or separate subdivision does not keep accounting records and, accordingly, does not have an accountant in its staff. Primary accounting documents drawn up by a separate subdivision are transferred to the accounting department of the head organization. The accounting department processes these documents and reflects them in the accounting. At the same time, operations, property and liabilities related to the activities of a separate subdivision are accounted for by the parent organization on separate sub-accounts.

Accounting in separate divisions allocated to a separate balance sheet.

Separate subdivisions allocated to a separate balance sheet have their own accounting service, headed by the chief accountant. The accounting department processes, systematizes and stores primary documentation, keeps accounting records of all operations, property and liabilities related to the activities of a separate subdivision, and generates financial statements of a separate subdivision.

In order to choose the form of a separate subdivision, it is necessary to clarify whether it is necessary to enter data into the constituent documents or not. Only information about the branch and (or) representative office is entered into the constituent documents, only after receiving a certificate of the relevant changes and an extract with data on the branch and (or) representative office can be registered with the territorial tax inspectorate. Unlike branches and representative offices, the procedure for creating a separate subdivision is much simpler: it is enough to register a separate subdivision with the territorial tax office.

Based on the foregoing, we can conclude that when choosing the form of a separate subdivision, it must also be taken into account that organizations that have branches and / or representative offices are not entitled to apply the simplified taxation system (clause 3 of article 346.12 of the Tax Code of the Russian Federation). And companies that have established a separate subdivision that is not a branch or representative office, and have not indicated it as such in their constituent documents, they have the right to apply the “simplification” (subject to the norms of Chapter 26.2 of the Tax Code of the Russian Federation).

Ignatieva Elena Vladimirovna

Absolutely all legal entities that are registered in Russia have the opportunity to open one or several separate divisions at once. This is where the question arises: what is the difference between a separate division, a branch and a representative office?

Not the same

So, branches and representative offices, as well as stationary workplaces, are equated to separate divisions. The procedure for opening them, along with the requirements that apply to them, as well as their definitions, is fully described in the current Russian legislative acts.

What is the difference between a separate division and a branch? Let's dwell on this issue in more detail.

Separate divisions

The Russian Civil Code allows the creation and existence of legal entities that, together with other business entities, are directly involved in conducting business activities or are created to achieve certain set goals.

Absolutely all organizations operating in Russia have the right and opportunity to open separate divisions. It should be borne in mind that separate subdivisions do not act as legal entities. For this reason, they are deprived of the legal capacity that is inherent in legal entities. You can feel the difference between a branch and a separate division.

Jobs for more than a month

It should be remembered that separate subdivisions must be located at an address that is different from the location of the main institution, in addition, they must have stationary workplaces. In this case, the creation of jobs for a period of more than one month is implied. A separate subdivision created by a legal entity is a branch, representative office or stationary workplace. Here you can already understand the difference between a branch, a representative office and a separate subdivision.

Information about each separate subdivision, excluding stationary jobs, is recorded in the unified state register of legal entities. To do this, the institution that creates them must submit completed applications to the tax office in accordance with the established forms.

So what is the difference between a branch and a separate division? Let's look at the course of the article and find out the controversial points.

What are separate divisions?

Civil law distinguishes two structural divisions, namely a branch and a representative office. The norms of the Civil Code do not contain any other structural divisions that are separate from the main organization. Is the branch a separate division? In the course of the already studied material and the newly arrived, we will find out this to the end.

Link to law

But at the same time, the list of divisions that are separate from the main institutions is also contained in other legislative acts. So, in the tax legislation there is a reference to the possibility of recognizing as separate parts of the main organization any territorially separated structure that has stationary jobs. The workplace, including stationary ones, is a place that is controlled by the organization and in which the employee performs his labor duties, as discussed in article of the Labor Code No. 209. What is better, a branch or a separate subdivision? Let's understand further.

In the public domain

Today, the list of structures that can be recognized as separate is open and is not limited to a branch and a representative office. Each type of structural units has not only its own distinctive features, but also common characteristics.

So what is the difference between a separate division and a branch? Let us first dwell on the very concept of the latter.

What are branches?

Under the branch of a company, it is customary to mean a structure belonging to it, which, like a separate division, is located in another territory. At the same time, it carries out activities that, in their content, fully correspond to the functions of the main office. Next, we will consider the difference between a separate division from a branch and a representative office, and many other unclear points.

In the same way as in the situation with separate subdivisions, the creation of branches takes place at the level of local regulatory and legal acts of the institution. This is the difference between a branch and a separate division. True, such a procedure, as a rule, is much more complicated than that which determines the establishment of structures of the first type. In particular, an executive hired under a labor document, for example, a general director, does not have the right to establish branches. In addition, at least two-thirds of the total number of owners of the company must vote for the creation of a branch if it concerns an LLC. The charter of the company may provide for the creation of branches according to decisions made by the board of directors.

The statute must contain

Unlike institutions of separate divisions, the creation of a branch provides for the indication of information about it in the company's charter. In addition, information about the relevant changes in the constituent documents of the company must be submitted to the tax authorities so that the mentioned service subsequently makes all the required adjustments to the Unified State Register of Legal Entities. In addition, it is also important for tax authorities to send copies of documents in which changes were made to the charter of the organization. Or you can provide copies of the relevant constituent paper. Based on the information about the branch of the organization, which is entered in the Unified State Register of Legal Entities, the new structure of the company is put on tax records according to the location.

Information about the establishment of a branch, as in the case of separate representative offices, should be transferred to the pension fund, and, in addition, to the tax authority. The branch of the company needs to have its own manager, who will hold his position in accordance with the power of attorney issued by the head office. It is also required that the general director issue an order on the appropriate decision. Powers within the framework of the appointment of the head of the branch may be transferred to other management bodies of the company. So, which is better a branch or a separate division? The following material will help draw conclusions.

Main differences

Here we come to the answer to the question of what is the difference between a separate division and a branch further in the text.

The concept of a branch is enshrined in the Civil Code in Article No. 55. According to this article, the branch is not only remote from the main organization in the territorial sense, but also performs all or part of the functions of the main institution, and also performs the tasks of representation.

It should be noted that the concept of representation and the definition of a branch differ from each other. These differences already follow from the characteristics of both structural units given in civil law.

So, let's consider the basic differences between branches and separate divisions, and also find out what are the characteristic features of stationary jobs:

functional differences. Within the framework of functional differences, it should be noted that branches perform all or part of the duties of the main institution. They also carry out the functions of representative offices. The activities of separate divisions are aimed at representing and protecting the interests of the main company. At stationary workplaces, employees perform their duties directly at their place.
Business differences. When carrying out commercial activities, branches have the entire arsenal of powers and have the right to conduct it. As for separate subdivisions, they do not have such a right. Stationary workplaces also cannot carry it out, they can only deal with labor relations.
Notice to the tax office. Branches are not required to notify the tax inspectorate of their establishment. With regard to separate divisions, such a need is also not provided. But stationary places must notify the tax authority within a month from the date of opening.
Availability of information in the Unified State Register of Legal Entities. Information about separate subdivisions, as well as about branches, is contained in the Unified State Register of Legal Entities. As for the stationary workplace, this information is not indicated in the Unified State Register of Legal Entities.
The difference is in the order of creation. When opening branches, exactly like separate subdivisions, it is required to obtain permission from the owner of the institution. To launch a stationary place, you need an order from the sole executive representative of the organization.
Accounting. Branches, as well as separate subdivisions, have the right to independently conduct accounting. Stationary places do not have such an opportunity.
Opportunity to open your own bank account. Branches, along with separate subdivisions, can open their current account with a banking institution. Stationary workplaces cannot open their current account in the tank.

The difference is not only in the names

As you can clearly see, the differences between different types of separate structural units are much wider than just the difference in names. The difference between the existing types of structural divisions is of a fundamental nature. Mostly, the differences are in the functions for the implementation of which the required structural units are created.

It should also not be forgotten that there are some common features between the structural divisions. For example, they are not considered legal entities, information about them does not need to be indicated in the charters of institutions, and their heads have the right to perform their duties solely on the basis of a power of attorney. Structural divisions directly act on the basis of regulations. Any separate subdivision must have stationary jobs.

When there is a choice between a separate division or a branch, it is necessary to determine the assigned functions that the corresponding structure will have to perform. In addition, it is required to determine the goals for which it is created. In addition, the body of the main institution, which decides on the opening of branches, should also take into account the following factors:

Conclusion

So what is the difference between a separate division and a branch? I think everyone who has studied already knows the answer for himself.

Separately, it can be noted that the right to choose one or another separate subdivision belongs only to the organization that creates it. But before making a final decision on the form of a separate subdivision, it is necessary to study in detail all the features of each of the possible options.