Public Procurement After Bankruptcy: 44-FZ and 223-FZ

After Russian personal bankruptcy, an ordinary citizen may bid under Laws Nos. 44-FZ and 223-FZ as an individual or after registering as a sole proprietor, provided the specific procurement requirements are met. The five-year restriction on re-registration primarily concerns a debtor who was declared bankrupt while acting as an individual entrepreneur.

Short answer

Completed personal bankruptcy does not create a lifelong ban on Russian public procurement. Law No. 44-FZ allows individuals, including individual entrepreneurs, to participate. However, an individual entrepreneur declared bankrupt normally loses that registration and may not register again or conduct business for five years after completion of the asset-realisation procedure. Before bidding, check the final court order, the EGRIP register, the status of the bankruptcy case and the requirements of the specific procurement.

The key distinction: an ordinary individual or a bankrupt entrepreneur

The general consequences of a citizen’s bankruptcy are listed in Article 213.30 of Law No. 127-FZ. They include disclosure of the bankruptcy when taking new loans and restrictions on managing certain organisations. The article does not impose a universal ban on registering as an individual entrepreneur or participating in procurement on every bankrupt citizen.

The position is different when a current individual entrepreneur is declared bankrupt. Under Article 216, the entrepreneur’s registration ceases when the court declares the person bankrupt and introduces asset realisation. As a general rule, re-registration and business activity are prohibited for five years after completion of asset realisation or termination of the case during that procedure. Article 22.1 of Registration Law No. 129-FZ expressly reflects this restriction.

Status	Registration as an entrepreneur	Procurement participation
The citizen completed personal bankruptcy but was not an entrepreneur when declared bankrupt	Article 213.30 alone does not impose the special five-year ban; the court order and other refusal grounds must still be checked	Participation remains possible in principle if the person meets Law No. 44-FZ and the procurement terms
A current individual entrepreneur was declared bankrupt and asset realisation was introduced	The registration ceases; the five-year Article 216 restriction normally applies	The person cannot bid as an entrepreneur until that status may lawfully be restored
The Article 216 period has expired	An application may be filed if no other refusal ground exists	After registration, participation is on the ordinary terms of the specific procurement
An individual or professional-income-tax payer without entrepreneur status	Entrepreneur registration may not be required for a legally permitted working model	Eligibility depends on the law, subject matter and documents; tax status does not replace licences or permits

What Law No. 44-FZ requires

Article 3(4) of Law No. 44-FZ defines a procurement participant as any legal entity or individual, including an individual entrepreneur, subject to the statutory exclusions. The contract system is therefore not limited to companies.

At the same time, Article 31(1)(3) requires the absence of an arbitrazh court decision declaring a participating legal entity or individual entrepreneur bankrupt and opening insolvency proceedings. The customer or commission may verify compliance. A non-compliant participant may be removed, and the customer may refuse to sign the contract.

A completed past personal bankruptcy is not named as a separate lifelong exclusion. The participant must nevertheless meet every other requirement: hold a valid status, licence or SRO membership where required, satisfy tax, disqualification, experience and qualification rules, and provide accurate declarations.

During an active case

Do not assume that bidding is automatically safe. Check the participant’s status, the stage of the case, authority over money and assets, bank accounts and the practical ability to perform the contract.

After the case ends

Separate the general consequences of a citizen’s bankruptcy from the special consequences for an entrepreneur. Then check EGRIP, platform accreditation and the specific notice.

How procurement under Law No. 223-FZ differs

Under Article 3(5) of Law No. 223-FZ, a participant may also be a legal entity or individual, including an entrepreneur, if it meets the customer’s requirements. However, the process substantially depends on that customer’s procurement regulations, notice and documentation.

A conclusion under Law No. 44-FZ should therefore not be transferred automatically to Law No. 223-FZ. Check the permitted category of participants, uniform and additional requirements, rejection grounds, bid security and contract security. Article 3.4 contains special rules for SME procurement; professional-income-tax payers may participate in the cases provided by the applicable rules.

A self-employed person after bankruptcy

Professional income tax is a tax regime, not a universal permission for every activity. A professional-income-tax payer may participate where the law and documentation permit individuals or self-employed persons and the contract is compatible with that status.

If Article 216(4) applies, using the tax regime to bypass a prohibition on business activity creates a separate risk. Before bidding, assess the substance of the planned activity, the bankruptcy court order and the procurement rules rather than relying only on tax registration.

Step-by-step return to procurement

1. Obtain the final court order

Record the completion date and confirm whether the person went through the procedure as an entrepreneur.

2. Check EGRIP and Fedresurs

The registers must match the court order. Do not bid using an entrepreneur status that has ceased or cannot yet be restored.

3. Choose the participation model

An individual, self-employed person, entrepreneur and company are different participants with different documents, taxes and risks.

4. Read the full notice

Check Article 31, additional requirements, licences, SRO membership, experience, security and the bad-faith suppliers register.

5. Verify every declaration

Do not confirm compliance formally. Inaccurate information may lead to removal or refusal to conclude the contract.

6. Test performance capacity

Check financing, special accounts, guarantees, personnel and working capital before submitting the bid.

Documents to review

the bankruptcy judgment and order completing asset realisation or terminating the case;
a current EGRIP extract or proof of professional-income-tax status;
Fedresurs publications and the arbitrazh case file;
the procurement notice, documentation and draft contract;
licences, SRO approvals, experience and qualification evidence;
platform accreditation, special account and security documents;
tax debt, disqualification and bad-faith supplier register information.

Frequently asked questions

Can I register as an entrepreneur immediately after personal bankruptcy?

If you were not an entrepreneur when declared bankrupt, the special Article 216 five-year restriction may not apply. If an individual entrepreneur was declared bankrupt, re-registration is normally unavailable for five years after completion of asset realisation. The court orders and EGRIP data control the conclusion.

Is a former bankrupt person automatically unreliable under Law No. 44-FZ?

No universal lifelong exclusion is based solely on completed personal bankruptcy. The customer checks the current Article 31 requirements and the bid information. Any further criteria must comply with the law and the particular procedure.

May I participate as an ordinary individual?

Law No. 44-FZ permits an individual to be a participant. The subject matter may nevertheless require entrepreneur status, a licence, SRO membership, personnel or other resources.

May a bankrupt former entrepreneur use the self-employed tax regime during the five-year period?

Article 216 prohibits business activity for the specified period. Professional income tax should not be used as a formal workaround; the actual activity, court order and intended contracts require a separate assessment.

Does a shareholder’s personal bankruptcy prevent the company from bidding?

The shareholder’s personal bankruptcy and the company’s bankruptcy are different legal facts. Check the company’s status, its management, Article 31 requirements and any restrictions applying to the individual.

Are the rules identical under Laws Nos. 44-FZ and 223-FZ?

No. Under Law No. 223-FZ, the customer’s procurement regulations and documents are particularly important. Each procedure requires a new review.

Official sources

Check eligibility for procurement after bankruptcy

We can review the court orders, restriction period, participant status and the selected procurement requirements before you bid.

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