On September 1, 2014 significant amendments to the Russian Civil Code’s provisions for the creation, operation, reorganization and liquidation of legal entities came into force. Key amendments are briefly described below.
Forms and Systems of Legal Entities
All legal entities are either corporate (founders (participants) have membership rights) or unitary (founders are not participants or members). For-profit legal entities are either public or non-public, with corporate governance in the latter being more flexible. For example, the rights of participants in a non-public for-profit legal entity do not have to be proportionate to the number of shares held.
Legal entities may no longer be created as closed joint-stock companies. However existing closed joint stock companies are not required to be re-registered in another form before any changes to the charters are made.
New provisions for shareholder agreements (“korporativny dogovor”) have been introduced. Shareholder agreements for public legal entities shall be disclosed to the extent required by law. However, shareholder agreements in non-public legal entities may remain confidential, unless otherwise required by law.
Amendments also provide for certification of minutes of general shareholders meeting (and of LLC’s participants). Depending on the form of the commercial company, minutes should be certified by a notary, a corporate registrar or otherwise in certain cases.
The combination of different forms of reorganized corporations and reorganization of several legal entities at once is permitted and it is now possible to challenge court decisions for liquidation of a legal entity. Joint and several liability of persons having control over a legal entity’s decisions may now be imposed in the event of certain abuses in the course of reorganization.
Certain Additional Amendments Are:
– Payment of charter capital: When provided by law that charter capital may be paid after the time of registration, the participants of the legal entity shall be secondarily liable for legal the entity’s debt.
– Liquidation: Property of a legal entity discovered after liquidation may be distributed among its creditors.
– Further action against “sham” legal entities: Legal entities “dormant” for 12 month (not having filed accounting documents and not having conducted any operations on any of their bank accounts) shall be eliminated from the state register.