On shareholders’ agreements and other changes to company law


Legal Update No. 44

Goltsblat BLP advises that Federal Law No. 115-FZ of 3 June 2009 “On Amendments to the Federal Law “On Joint-Stock Companies” and article 30 of the Federal law “On the Securities Market”” (hereinafter the Federal Law) came into effect on 8 June 2009.

This Federal Law has secured the shareholders’ agreement as a new institution of company law. Under such an agreement, the parties undertake to exercise the rights conferred by shares and (or) rights to shares in a specific manner and (or) to refrain from exercising these rights.

A shareholders’ agreement may require its parties to:

  • vote in a specific way at General Meetings of Shareholders;
  • agree with other shareholders on how to vote;
  • acquire or dispose of shares at a previously agreed price and (or) under certain circumstances;
  • refrain from disposing of shares until specific events occur;
  • perform other coordinated actions relating to the company’s management, activities, reorganisation and liquidation.

A shareholders’ agreement is concluded in relation to all the shares of each of the parties and is binding only on these parties. Violation of a shareholders’ agreement cannot invalidate decisions made by joint-stock company bodies. A shareholders’ agreement may envisage methods for securing performance of, as well as civil law sanctions for failure to fulfil or duly fulfil the obligations deriving from it. In the event of violation of a shareholders’ agreement, the rights of the parties to it are subject to judicial protection, including the right to claim damages, imposition of penalties (fines, default interest), compensation or other such sanctions.

The person acquiring, under a shareholders’ agreement, the right to determine the voting procedure at the General Meeting of Shareholders must notify the company that such an agreement has been concluded, if issue of the company’s equity securities was accompanied by registration of a relevant prospectus. Shareholders may demand such notifications of shareholders’ agreements and lists of the parties to these, which are to be kept by the company, and may receive them for familiarisation. During preparations for a General Meeting of Shareholders, information about shareholders’ agreements concluded over the previous year should be furnished to persons entitled to participate in the meeting.

The Federal Law has introduced changes to the effect that any person acquiring the right to dispose of over 5, 10, 15, 20, 25, 30, 50 or 75 per cent of the votes on outstanding ordinary shares in a joint-stock company (if an issue prospectus was registered for these) must notify the company and the federal securities authority of this. The entitlement to dispose of the given quantities of shares may derive from share acquisition or the right granted under an agreement with a shareholder to determine the voting procedure at General Meetings of Shareholders. In turn, the issuer must disclose such information as a material fact.

The Federal Law has also established a mechanism for resolving situations when the Board of Directors of a joint-stock company is unable to constitute a sole executive body at two consecutive meetings or within two months of the previous sole executive body’s rights terminating or expiring. In general, the decision-making on such an issue may be transferred to the General Meeting of Shareholders, with its agenda including the issue of early termination of the Directors’ powers and election of a new Board of Directors. This is also the procedure when the Board of Directors is unable to decide on early termination of the powers of the sole executive body at two meetings in a row.

In addition, joint-stock companies that disclose information in compliance with the securities legislation of the Russian Federation are required to do so regarding failure to take a decision on formation (on early termination of the authority) of the sole executive body as a material fact and other companies must notify of failure by shareholders to adopt such a decision in the manner envisaged by the Federal Law “On Joint-Stock Companies” for announcement of a General Meeting of Shareholders.

For additional information, please contact:

Anton Rogoza, Partner,
Corporate / Mergers & Acquisitions,
Goltsblat BLP;
T: +7 495 2874444
E: info@gblplaw.com

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