Executing a resolution on charter capital increase by a sole participant: new rule for LLCs
Legal Update No. 571
This update relies on legal acts and draft laws existing as of 3 July 2016.
Goltsblat BLP advises that amendments have been made to the LLC Law1 changing the way a charter capital increase resolution by the sole participant in a limited liability company (“LLC”) is executed.
In particular, a rule has been added2 that a resolution by a sole participant in an LLC to increase the charter capital must be confirmed by the participant’s notarised signature. Previously, the Federal Tax Service of the Russian Federation (“FTS”) clarified that such a resolution, like a corresponding one passed by an LLC’s General Meeting of Participants, had to be confirmed by notarial certification. Please note that notarisation of a signature and notarial certification of a resolution of a legal entity’s governing body constitute different notarial actions that are performed in different ways prescribed by law3 . The above FTS clarifications are consequently no longer valid once the amendments to the LLC Law come into effect.
In addition, it should be noted that document signature certification, in contrast to notarial certification of a resolution by a legal entity’s governing body, may be certified by consular officials, so a sole LLC participant’s resolution to increase the charter capital, unlike a corresponding one passed by an LLC’s General Meeting of Participants, may be executed outside the Russian Federation.
A charter capital increase resolution by a General Meeting of Participants and the list of participants present at the meeting still have to be confirmed by notarial certification.
These amendments to the LLC Law come into effect on 15 July 2016.
1 Federal Law No. 14-FZ of 8 February 1998 “On Limited Liability Companies”.
2 To clause 3, article 17 of the Law on LLC.
3 By article 80 and article 103.10 of the Fundamentals of the Legislation of the Russian Federation on Notaries, respectively.
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