Recommendations of the Presidium of the SAC RF for aligning LLC Articles of Association with the legislation.

07.05.2010

Legal Update No. 142.

Goltsblat BLP advises of Information Letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated 30 March 2010 No. 135 “On certain aspects of application of article 5 of Federal law of 30 December 2008 No. 312-ФЗ “On amendments to Part One of the Civil Code of the Russian Federation and certain legislative acts of the Russian Federation““ (the Letter and the Law, respectively). The Letter includes, in particular, the following recommendations.

  • It is lawful for the registration authority to refuse state registration of amendments to LLC Articles of Association that have not been aligned with the legislation, unless it follows from the application for state registration or the decision on introducing amendments that the given amendments are designed to bring the Articles of Association into line.
  • The amendments introduced by the Law from 1 July 2009 are applicable whether or not the LLC Articles of Association have been brought into conformity.
  • Failure to bring the Articles of Association of an LLC into line at the time of the first amendment thereto does not constitute an irremediable violation and does not entail liquidation of the LLC, restricted legal capacity of the LLC, restricted turnover (disposal, pledge, etc.) of ownership interests in the LLC, or invalidation of transactions with the LLC and transactions with ownership interests in it.
  • The General Meeting of Participants in an LLC is entitled to make decisions on reorganisation or liquidation of the LLC and, for state registration purposes,  it is not necessary to bring the LLC’s Articles of Association into conformity. No amendments to the LLC Articles of Association will, however, be registered before those bringing the LLC Articles of Association into line.
  • Since 1 July 2009, the foundation agreements of LLCs have no longer been constituent documents but they remain in effect for the parties. Moreover, agreements concluded before this date on the basis of clause 2, article 421 of the Russian Civil Code and similar agreements on exercise of the LLC participants’  rights remain valid after this date.
  • When amendments to the LLC Articles of Association are submitted for state registration after 1 July 2009, if they contain information about  the size and nominal value of the LLC participants’ ownership interests, they do not constitute grounds for changing the information about the participants contained in the Companies Register.
  • The possibility envisaged by the Law of out-of-court refutation of information entered into the Companies Register about the sizes and nominal values of ownership interests applies only to information entered into the Companies Register from the version of the LLC Articles of Association prior to 1 July 2009 in conjunction with state registration of the amendments bringing the Articles of Association into conformity with the legislation.
  • Ownership interest pledge agreements concluded in simple written form before 1 July 2009 remain in effect after this date. Information about such a pledge may be entered into the Companies Register at the request of the Pledgor, transmitted by the pledgee or a notary public.
  • Representatives’ powers based on powers of attorney issued in simple written form before 1 July 2009 to perform transactions involving alienation of an ownership interest in an LLC and to conclude ownership interest pledge agreements terminated on this date.
  • If, before 1 July 2009, the LLC Articles of Association contained a provision on the participants’ right to withdraw from the company, they retain this right after the given date (irrespective of whether amendments have been introduced to make the LLC Articles of Association comply with the law). If there is no such provision in the Articles of Association, from the given date onwards, participants do not have the right to withdraw from the LLC in the manner of article 26 of the Federal Law “On LLCs”.  Such a right may be secured in the Articles of Association by ¾ of the votes of the participants up until 1 January 2010 or unanimously by all participants in the LLC after this date.
  • LLCs founded before 1 July 2009 are required to keep a list of participants only from the given date. Such LLCs must start keeping such a list by entering all the requisite information as of 1 July 2009. It is not necessary to enter information about any previous changes.
  • Until new formats of relevant applications are approved in connection with adoption of the Law, the registration authority may use the forms recommended by the Federal Tax Service of Russia and posted on its website www.nalog.ru. Use of these forms does not, in itself, constitute grounds for a notary public to refuse to certify the authenticity of the signature on the application or for decisions and actions of the registration authority with respect to making entries in the Companies Register on the basis of the given forms to be recognised as unlawful.

For additional information, please contact:

Anton Sitnikov,
Partner,
Head of Corporate/ M&A Practice, Goltsblat BLP,
Tel: +7 (495) 287 44 44,
Email: info@gblplaw.com

Anton Rogoza,
Partner,
Corporate/ M&A Practice
Goltsblat BLP,
Tel: +7 (495) 287 44 44,
Email: info@gblplaw.com

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