New Rules for inclusion of the words "Russian Federation", "Russia" or their derivatives in the company names

Inclusion of the words "Russian Federation" or "Russia," in company names is regulated by Article 1473 of the Civil Code. It states that they may be used if approved by the Government. The permit is issued by the Ministry of Justice if:

• a legal entity has branches (representative offices) in more than half of the subjects of the Russian Federation, or
• a legal entity is a major taxpayer, or
• a legal entity is classified as one having a market share of certain goods of more than 35 percent, or occupies a dominant position in the market of a particular product, or
• more than 25 percent of voting shares, or over 25 percent of the authorized capital of a business entity are owned by the Russian Federation.

Now, the government amended those rules by its directive dated January 15, 2016.

One of the changes liberalizes the requirements to be complied with by a company to be able to include those words. Now, the permit can also be granted to legal entities, whose 25 percent of the authorized capital (or more than 25 percent of voting shares) is owned by the organization established by the Russian Federation on the basis of a special federal law, and the name of which includes the official name "Russian Federation" or "Russia," as well as words derived from this name. Such organizations are, in particular, public corporations Rostech, Roscosmos and Rosatom. In such cases, the permit shall be issued to a legal entity which may use in its company name the name of the parent company whose name includes “Russia” or “Russian Federation”.

The Rules also are supplemented by the provision that in case of a change of name or of the incorporation form of a legal entity, it reserves the right to retain in its name the words "Russian Federation" or "Russia" and the words derived from that name which were previously obtained on the basis of a permit. No renewal of permits is necessary in this case.