Absolutely all legal entities that are registered in Russia have the opportunity to open one or several separate subdivisions at once. This is where the question arises: what is the difference between a separate division, branch and representative office?
Not the same thing
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 laws.
What is the difference between a separate division and a branch? We will dwell on this issue in more detail.
Separate units
The Russian Civil Code permits the creation as well as the existence of legal entities that, together with other business entities, are directly involved in conducting entrepreneurial activities or are created to achieve certain goals.
Absolutely all organizations operating in Russia have the right and ability to open separate units. It should be borne in mind that separate divisions do not act as legal entities. For this reason, they are deprived of the legal capacity inherent in legal entities. You can feel the difference between a branch and a separate division.
Jobs for a period of more than a month
It should be remembered that separate units must be located at an address that differs from the location of the main institution, in addition, they must have stationary jobs. In this case, it implies the creation of jobs for a period of more than one month. A separate unit 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 division.
Information about each separate division, excluding stationary workplaces, is recorded in the unified state register of legal entities. For this, the institution that creates them must submit to the tax inspectorate the completed application in accordance with the established forms.
So what is the difference between a branch and a separate division? Let's look through the article and find out the controversial issues.
What are separate units?
Civil law distinguishes two structural divisions, namely the branch and representative office. The Civil Code does not contain any other structural units that are separate from the main organization. Is the branch a separate division? In the course of the material already studied and newly received, we will find out to the end.
Link to the law
But at the same time, the list of divisions that are isolated from the main institutions is contained in other legislative acts. So, in the tax legislation there is a reference to the possibility of recognition as separate parts of the main organization of any geographically separated structure that has stationary jobs. A workplace, including stationary ones, is a place controlled by the organization and in which the employee fulfills his labor duties, which is discussed in the article of the Labor Code No. 209. What is a better branch or a separate division? Let's figure it out next.
In open access
Today, the list of structures that can be recognized as separate is open and is not limited only to the branch and 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 affiliates?
By a 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, she carries out activities that, in its content, are fully consistent with the functions of the main office. Next, we consider the difference between a separate division from a branch and a representative office and many other obscure points.
In the same way as in the situation with separate divisions, the creation of branches takes place at the level of local regulatory and legal acts of the institution. That's the difference between a branch and a separate division. True, such a procedure, as a rule, is much more complicated compared to the one that defines the establishment of structures of the first type. In particular, an executive person hired by a labor document, for example, the 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 should vote for the creation of a branch in the case of LLCs. The charter of a company may provide for the establishment of branches in accordance with decisions taken by the board of directors.
The charter should contain this
Unlike the 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 transferred to the tax authorities so that the said service subsequently makes all the necessary adjustments to the USRLE. In addition, it is important for tax officials to send copies of documents, within the framework of which changes were made to the organization’s charter. 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 accounting according to the location.
Information on the establishment of a branch, as in the situation with separate representative offices, should be transferred to a pension fund, and, in addition, to the tax authority. The branch of the company must have its own head, who will occupy his position according to the power of attorney issued by the head office. It also requires the publication by the Director-General of an order on the relevant decision. The powers in the appointment of the branch manager can be transferred to other management bodies of the company. So what is better branch or separate division? The following material will help draw conclusions.
The main differences
Here we come to the answer to the question of what is the difference between a separate division and a branch hereinafter.
The concept of a branch is enshrined in the Civil Code in article No. 55. According to this article, a branch is not only remote from the main organization in the territorial sense, but also carries out all or part of the functions of the main institution, and also performs the tasks of the representative office.
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, we will consider the basic differences of branches from separate divisions, and also find out what are the characteristic features of stationary workplaces:
- Functional differences. As part of the functional differences, it should be noted that the branches fulfill all or part of the responsibilities of the main institution.They also perform 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 carry out their duties directly at their place.
- Differences in commercial activities. In carrying out commercial activities, branches have the entire arsenal of powers and have the right to carry it out. As for the separate units, they do not have this right. Stationary jobs also cannot carry it out, they can only deal with labor relations.
- Tax Inspection Notice. Affiliates are not required to notify the tax office of their establishment. For separate units, 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 register. Information on separate divisions, as well as on branches, is contained in the Unified State Register of Legal Entities. As for the stationary workplace, this information is not indicated in the register.
- Differences in the order of creation. When opening branches, as well as separate divisions, obtaining permission from the owner of the institution is required. To start a stationary place you need an order of the sole executive representative of the organization.
- Accounting. Branches, as well as separate units have the right to independently conduct accounting. Stationary places do not have such an opportunity.
- Ability to open your own bank account. Branches, along with separate divisions, can open their current account in a banking institution. Stationary workplaces cannot open their current account in the tank.
The difference is not only in the names
As you can 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 units has a fundamental character. Mostly the differences are in the functions for the implementation of which the required structural units are created.
Do not forget that there are some common features between structural units. For example, they are not considered legal entities, information about them does not need to be indicated in the charters of institutions, and their leaders have the right to fulfill their duties solely on the basis of a power of attorney. Directly structural units operate on the basis of regulations. Any separate unit must have stationary workplaces.
When there is a choice between a separate subdivision or 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 units, should also take into account the following factors:
- Is independent accounting planned by a separate unit.
- Will these units be endowed with property.
- Will there be a settlement account open for departments.
Conclusion
So what is the difference between a separate division and a branch? I think every student already knows the answer for himself.
Separately, it can be noted that the right to choose one or another separate unit belongs only to the organization that creates it. But before making a final decision on the form of a separate unit, it is necessary to study in detail all the features of each of the possible options.