No. 68. Improved Regulation of Joint-Stock Company Operations
No. 68. Improved Regulation of Joint-Stock Company Operations
17.08.2009
Goltsblat BLP advises that Federal Law of 19 July 2009 No. 205-FZ “On
Amendments to Certain Legislative Acts of the Russian Federation” (the
Federal Law) has been passed.
The Federal Law regulates a quite broad range of aspects relating to improvement
of the work of commercial organisations and resolution of corporate conflicts.
In particular, amendments affecting the Federal Law “On Joint-Stock Companies”
come into effect on 21 October 2009.
Above all, these amendments provide for the company and the registrar to bear
joint and several liability for losses caused to a shareholder by violations
in drawing up and maintaining the company’s shareholders’ register. A procedure
is determined for discharge of joint and several obligations to make recompense
for losses caused.
Significant changes have been made to the procedure for appealing against resolutions
adopted by General Meetings of Shareholders of a company. For instance, the
time limit for appealing such resolutions has been cut from six to three months.
The existing right enjoyed by members of the Board of Directors is supplemented
by the right of company shareholders to appeal against Board of Directors’ resolutions
as well (within three months of the day on which the shareholder becomes aware
or should have become aware of the resolution adopted and of the circumstances
constituting the grounds for the resolution to be deemed invalid). By analogy
with resolutions of a General Meeting of Shareholders, in the event of minor
infringements, the court is empowered to uphold the Board of Directors’ resolutions
against which appeals have been lodged.
It has been established that invalidity of a Board of Directors’ resolution
on convening a General Meeting of Shareholders does not entail invalidity of
a resolution adopted by a Meeting convened on its basis. Violations committed
in convening Meetings are considered by the court when it hears an appeal against
a resolution adopted thereby.
For the first time, invalidity of resolutions adopted by a company’s governing
bodies are judicially separated from invalidity of transactions performed in
accordance therewith. In particular, the Federal Law established that recognition
as invalid of Board of Directors’ resolutions approving major or interested-party
transactions does not automatically entail recognition of the transactions themselves
as invalid.
There has also been a change to the procedure for disputing major and interested-party
transactions and the statute of limitations for claiming invalidity of such
transactions, once elapsed, is not subject to reinstatement.
Amendments have been introduced into the procedure for convening an Extraordinary
General Meeting of Shareholders. If, during the set period, the Board of Directors
fails to adopt a resolution on convening such a meeting or decides not to convene
one, the company body or person requesting that such a meeting be convened is
entitled to refer the matter to court, demanding that the company be compelled
to hold the meeting (but not to convene it themselves). The court ruling obliging
the company to hold such a meeting is to indicate the time and procedure for
doing so. This rule also applies to an Annual General Meeting of Shareholders
if it has not been convened and held on time.
The list of documents that a joint-stock company must store has been extended,
with the addition of notifications of conclusion of shareholder agreements,
the list of persons concluding such agreements, judicial acts on disputes over
the incorporation of the company, management of the company or participation
therein. The company’s obligation to provide shareholders with access to the
given judicial acts is also secured.
For additional information, please contact:
Anton Sitnikov, Partner, Head of Corporate / M&A Practice,
Goltsblat BLP,
E-mail: Anton.Sitnikov@gblplaw.com
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