Dissolution instead of suspension

entrepreneur for violations of the law.

A group of deputies submitted to the State Duma a draft of the renewed Administrative Offences Code. The most innovative suggestion contained in the document is the possibility to dissolve a legal entity and to terminate the activity of an individual entrepreneur for violations of the law.

Article 3.2 of the draft of the amendments to the Code states that a legal entity may be forcefully dissolved for material administrative offences. Alexander Bolomatov, Partner of the Law Firm "YUST", explains: “There is essentially only one ground: operating without license or, if required, without ARO membership. For example, if the organization performs medical activities. In the case of an individual entrepreneur – if he renders notarial services or constructs a building without license or ARO membership”. Suspension is currently the most severe administrative punishment for legal entities and individual entrepreneurs. No special details of application of dissolution are given. The speaker says: “It is only said that the punishment is applied in the case of a severe, repeated or recurrent administrative offence”. And also if other kinds of influence over the offenders are not able to produce the effect of correction of the offence. It should be noted that “severe offence” is also a news category for the Code. The draft law sets three categories of severity of the offences” severe, material and less material.