Changes in the Legislation on Limited Liability Companies

09.03.2016

Legal Update No. 554

Goltsblat BLP advises that changes to Federal Law No. 14-FZ “On Limited Liability Companies” dated 8 February 1998 (the “LLC Law”) came into effect on 1 and 15 January 2016. These regulate formalisation of various corporate acts and other relevant matters pertaining to disposal and encumbrance of a participatory interest in the charter capital of a Russian limited liability company (the “LLC”).

Moment of Transfer of Title to a Participatory Interest in the Charter Capital of an LLC

From 15 January 2016, title to a participatory interest or a part thereof in the charter capital of an LLC will be transferred to the acquirer once the relevant entry is made in the unified state register of legal entities (the “USRLE”) rather than at the time the participatory interest disposal transaction is certified by a notary. An application for the relevant entry in the USRLE must be filed with the tax authority in electronic copy bearing an enhanced qualified signature of the notary that certified the transaction for disposal of a participatory interest or a part thereof in the charter capital of the LLC.

Option

The LLC Law now allows effecting disposal of a participatory interest in the charter capital of an LLC by way of a separate notarised irrevocable offer (agreement granting an option to enter into a contract) and subsequent notarisation of its acceptance. The irrevocable offer is then deemed accepted once the acceptance has been notarised.

Pre-Emption Right

The LLC Law establishes a 7-calendar-day period in which an LLC may exercise its pre-emption right to purchase a participatory interest or a part thereof. The pre-emption period starts to run on the day pre-emption rights enjoyed by LLC participants expire or LLC participants waive their pre-emption rights.

Increase of Charter Capital

Making a resolution at a general participants’ meeting of an LLC to increase the charter capital and the composition of LLC participants present at the relevant meeting must be at all times confirmed by a notarial certificate.

Notarisation of Certain Corporate Acts

The revised LLC Law provisions require that the following corporate acts be notarised starting from 1 January 2016:

  • an offer by an LLC participant notifying the other participants of its desire to sell a participatory interest in the charter capital of the LLC;
  • a call for the buy-back sent by a participant to the LLC; and
  • an application for withdrawal from the LLC. 

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