On 8 August 2024, federal laws introducing a number of changes to the regulation of Russian LLC and JSC activities were published: Federal Law No. 305-FZ dated 08.08.2024 “On Amendments to Articles 48 and 66 of the Federal Law “On Joint Stock Companies” and Certain Legislative Acts of the Russian Federation” (hereinafter – “Law No. 305”) and Federal Law No. 287-FZ dated 08.08.2024 “On Amendments to the Federal Law “On Joint Stock Companies” and Certain Legislative Acts of the Russian Federation” (hereinafter – “Law No. 287”).
Delimitation of powers of JSC and LLC bodies
Law No. 305 established a list of issues that cannot be delegated by the general meeting to other bodies for authorization. Thus, in an LLC, some powers of the general meeting may not be transferred:
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to the board of directors – for example, the authority to approve the transfer of a share in the LLC as a pledge to a third party; to grant, limit or terminate additional rights or obligations of LLC participants, etc.;
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the collegial executive body (executive board) – this list includes both the powers that cannot be transferred to the board of directors and some other powers (election of the audit commission, determination of the main activities of the company).
Similarly, the legislation on joint-stock companies was also changed – for instance, a list of issues that cannot be transferred to a collegial executive body has been established: appointment of an auditor, election of members of the counting commission and early termination of their powers, approval of the company’s internal documents, etc. The Law No. 305 has also formalized that the transfer of issues to a collegial executive body does not provide shareholders with a right to demand the redemption of their shares.
The list of issues that may be delegated to the resolution of a JSC’s board of directors has not changed.
The rule for combining “posts” in LLC and JSC was also clarified – now the sole executive body (general director) and members of the collegial executive body (executive board) may not constitute more than 25% of the company’s board of directors and may not hold the position of its chairman. Previously, only the general director could not hold the position of chairman of the board of directors, and the 25% limitation applied only to members of the company’s executive board.
Changes in the procedure for holding meetings
Law No. 287 established detailed rules for remote general meeting of JSC and LLC and provides for the following methods of decision-making starting from 1 March 2025:
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a meeting (including a meeting with remote participation);
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a meeting where voting is combined with absentee voting;
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voting without holding a meeting (absentee voting).
When a remote meeting is held, real-time broadcasting of images and sound should be provided, and the company’s participants should be given the opportunity to be present at the venue of the meeting. A record of the broadcast of the session should be kept by the company together with the minutes.
The methods of identifying a person present remotely are established, including using an enhanced qualified electronic signature, an enhanced unqualified signature and a simple electronic signature. If a meeting with remote participation cannot be held due to significant technical failures that occurred when using electronic or other technical means, the meeting is declared invalid.
The procedure for board of directors’ activities is also clarified. In particular, decisions of the board of directors will be adopted by the same means as decisions of the general meeting and will be recorded by signing minutes. A quorum for decision-making is also introduced – not less than 50% of the body’s members, while this amount may be increased by the company’s charter.
Procedure for interaction with “lost” shareholders
Law No. 287 introduces a mechanism for dealing with so-called “lost” shareholders – those who have not exercised their shareholder rights for a long time. Thus, it establishes the possibility of suspending the payment of dividends to them and the sending of notices of general meeting holding.
Such a decision on suspension may be made if the following conditions are met simultaneously:
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for at least 2 consecutive years preceding the date of the decision, dividends transferred or all notices on holding meetings (absentee voting) sent to such shareholders has been returned to the company;
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the company has transferred dividends to the shareholder and sent notices to the shareholder at least 2 times within 2 years;
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5 working days prior to the date of the decision, the company’s registrar has not received up-to-date information on the shareholder required for payment of dividends or sending of notices, or the shareholder’s application for confirmation of the relevance of the information contained in the company’s shareholder register;
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to make a decision on suspension of sending messages about a meeting (absentee voting), it is also necessary that the last notice of the meeting contains a warning about the possibility of suspension of messages, as well as a notice about the shareholder’s right to send up-to-date information to the company.
At the same time, a shareholder in respect of whom the payment of dividends has been suspended has the right to demand their payment within 3 years from the date of expiration of the term for fulfillment of the company’s obligation to make payments. The said term shall not be restored in case of its omission (except for cases when the shareholder did not make this demand under the influence of violence or threat).
If a shareholder submits up-to-date information about himself, payment of dividends and sending of notices of meetings (absentee voting) will be resumed.
Election of the sole executive body
From 1 September 2024, notarial certification of resolution on election of general director becomes mandatory for LLC. Previously, the rule on notarization did not apply to the election of a sole executive body.
At the same time, no similar rule was introduced for JSC.