Changes to legislation: appointing the ceo of a limited liability company and holding a general meeting remotely
On July 30, 2024, the Russian State Duma passed, in its third and final reading, a draft law that alters, among other things, the procedure for documenting the change of the CEO of a company (for LLCs) and sets out rules for holding a general meeting remotely (Draft Law No. 103501-8). It is expected that the procedure for appointing a CEO will change as soon as September 1 this year, and the rules for holding a general meeting remotely (with several exceptions) will take effect March 1, 2025.
Appointing a CEO
Starting from September 1, 2024, a resolution that a limited liability company (LLC) adopts to elect, or appoint, its CEO will need to be certified by a notary. This requirement will apply even if the company’s articles of association do not require minutes of meetings to be notarized.
Changes will also affect the procedure for filing applications for state registration of the change of the CEO. If now it is the appointed CEO himself that acts as an applicant for state registration—i.e., signs an application filed with tax authorities, when the changes take effect, it will then be a notary that will act as an applicant submitting documents for state registration of changes in the details of the company in the register of legal entities.
Holding a general meeting remotely
Effectively, these changes will incorporate in the Law On Limited Liability Companies and the Law On Joint-Stock Companies the provisions that have previously existed in the general civil law provisions.
As you may remember, now a company may hold a general meeting remotely, if that is provided for by law or its articles of association. The changes in question will enable all companies to hold general meetings remotely. Limited liability companies and non-public joint-stock companies may (with certain restrictions) set out rules for holding general meetings remotely that would be different from those established by law.
The following features and requirements relating to holding general meetings remotely, which will be established, should be noted:
- A person participating in a general meeting remotely will be identified by using an enhanced qualified electronic signature, but the company’s articles of association may enable participants to use an enhanced qualified electronic signature or identification through Gosuslugi (the Russian Public Services Portal)/the Unified Biometric System. Where a person is represented by a proxy, the proxy’s identification and power of attorney or other document evidencing his powers in electronic form in machine-readable form will be required.
- It will be necessary to ensure that a meeting is broadcast in real time for all participants of that meeting who have the right to vote and have registered to participate in that meeting;
- The company’s articles of association may provide that all persons who have the right to vote should have mandatory real-time access to information on the voting process;
- Companies will be required to keep recordings of meeting broadcasts together with minutes of such general meetings.
The rules for holding general meetings remotely will also apply to meetings of the board of directors and the management board.
We would be pleased to assist you in checking your articles of association and corporate documents for compliance with the new changes and in developing provisions on holding a general meeting and other internal policies and procedures (including modifications and amendments to their current versions) in connection with the possibility of holding general meetings remotely.
Still have questions or want to discuss something? Please send an email to Artem Eretenko.