Resolution of the sole participant of a limited liability company on the charter capital increase – Federal Tax Service’s position

25.03.2016

Legal Update No. 557

Goltsblat BLP advises that the Russian Federal Tax Service has sent out the Letter No. ГД-3-14/743@ dated 24 February 2016 (the "Letter") on formalisation of corporate resolutions on increase of the charter capital of limited liability companies (the "LLC").

The position set out in the Letter states that the provisions of Federal Law No. 14-FZ dated 8 February 1998 "On Limited Liability Companies", pursuant to which a decision taken by the general participants’ meeting of LLC on the charter capital increase and the composition of LLC participants present at such meeting must be confirmed by the notarial certification, apply to a resolution on the LLC charter capital increase taken by both the general participants’ meeting of LLC and the LLC sole participant.

Consequently, the Russian Federal Tax Service's position specified in the Letter excludes automatically the possibility of formalising any corporate resolutions on increase of the charter capital of LLC, including ones taken by the LLC sole participant, outside the Russian Federation, taking into account the mandatory involvement of Russian notaries in notarisation of such resolutions.

It should be noted that the position specified in the Letter contravenes previously published Letter of the Federal Notarial Chamber No. 2405/03-16-3 dated 1 September 2014 "On Sending a Manual on Notarisation of Decisions Taken by the General Meeting of Participants in a Business Entity and the Composition of Participants Present at Such Meeting", pursuant to which notarial certification of resolutions does not apply to LLCs consisting of one participant. In order to clarify the above conflict, Goltsblat BLP has filed relevant enquiries with the Russian Federal Tax Service and the Federal Notarial Chamber and will definitely update you on the responses.

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