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In light of the fact that the current situation caused by COVID-19 and that the recommendation to avoid large gatherings coincide with the annual meeting season for companies, we would like to briefly outline key issues with respect to holding general meetings of shareholders of Russian companies.
1. General information on holding general meetings of shareholders (“GMS”) in limited liability companies (“LLCs”)
As a rule, GMS in LLCs are held in presence (“In Presence GMS”) with notarization of the minutes of such shareholders’ meetings in Russia in line with the formalities provided by Russian law, unless an alternative method of confirmation of shareholders’ resolutions (e.g., signing of the minutes by all shareholders) is set forth in:
a. the registered Charter of the company, or
b. established by resolution of the shareholders, which shall be also notarized.
Generally, even if the charter of an LLC provides for “on-line” options of holding In Presence GMS, such as videoconferencing, Skype, etc., such options are not considered as an exemption from the obligation to issue minutes of GMS (either notarized or in a form as set forth by the alternative ways of decisions making). Moreover, taking into account that it is not possible to notarize minutes of In Presence GMS abroad and in a view of the current ban on foreign citizens from visiting Russia and self-isolation requirements applicable to everyone upon arrival to Russia, the solution could be in holding a meeting via absent voting (“Absent Voting GMS”). Under the general requirements, the procedure for absent voting shall be set forth either in the Charter or in the special bylaws of the company. Usually Absent Voting GMS require the preparation and exchange of a package of documents, including voting ballots from each of the shareholders, minutes confirming the results of the absent voting of shareholders prepared based on the ballots, a list of the counted votes, etc.
However, it shall be noted that the absent voting solution is not applicable to the obligatory annual GMS of LLCs, during which inter alia annual reports and financial statements are approved, which may take place only in presence.
2. General information on holding GMS in joint stock companies (JSC)
Similar to LLCs, resolutions of JSCs may be held either in presence or by absent voting, while the obligatory annual GMS of LLCs, during which inter alia annual reports and financial statements are approved, as well as GMS to be held for the purposes of the election of the board of directors, revision commission and auditor cannot take place by absentee voting. Adoption of resolutions of GMS of JSCs shall be confirmed: (i) in the case of a public JSC by a registrar, and (ii) in the case of a non-public JSC by a notary public or registrar.
Please note that in light of the current situation caused by COVID-19, amendments to the Federal Law on Joint Stock Companies have been adopted, allowing for the holding of annual general meetings of shareholders in joint stock companies by absentee voting (Federal Law No. 50-FZ, adopted by the Russian State Duma dated March 12, 2020). As of now, no similar liberalization of rules for adopting decisions for LLCs have been introduced. However, a recently adopted law aimed at countering the COVID-19 pandemic and its effects have pushed back the deadline for holding annual GMS in 2020 to three months for JSCs and five months for LLCs. Thus, in 2020, LLCs and JSCs have to hold their annual GMS not later than 30th of September.
PETERKA & PARTNERS remains at your full disposal should you need any assistance in this respect. Please do not hesitate to contact our COVID-19 Help desk at firstname.lastname@example.org.