Federal laws on LLC (OOO) and on JSC (AO) require LLC and JSC to hold annual general meetings of shareholders to approve their annual results. The following matters are resolved at the annual general meeting:

  • Election of the company’s board of directors, audit commission (internal auditor);
  • Approval of the company’s internal auditor;
  • Approval of annual reports, annual financial statements, including the company’s profit and loss statements/income statements (unless JSC charter assigns this matter to the competence of the board of directors);
  • Distribution of profits and payment of dividends;
  • Other issues brought up to the general meeting by OOO shareholders.

Deadlines for holding general meetings

  • No earlier than March 1 and no later than April 30 for LLC (OOO) as set out in OOO charter;
  • No earlier than March 1 and no later than June 30 for JSC (AO).

In 2020, the deadlines for holding LLC (OOO) and JSC (AO) general meetings of shareholders were extended until September 30.

The usual deadlines for LLC (OOO) annual general meetings apply in 2021, i.e. they must be held by April 30, 2021 at the latest (Article 34(2) Law No. 14).

Adoption of resolutions at general meetings

Resolutions at LLC (OOO) general meetings are adopted by a show of hands (open ballot) by default. OOO charter may provide for another procedure for adopting resolutions.

In addition to mandatory issues, other matters may be included by shareholders in the agenda of annual general meetings.

Adoption of resolutions by absentee ballot in 2020-2021

From March 7, 2021, LLC (ООО) have been temporary allowed to hold annual general meetings of shareholders by absentee vote (Article 3(2) Federal Law No. 17-FZ dated February 24, 2021). The provisions of Article 50(2) Federal Law On LLC have been suspended until December 31, 2021, and all resolutions on issues considered by the general meeting may be adopted by absentee vote including:

  • Election of board of directors (supervisory board);
  • Election of audit commission;
  • Approval of auditor;
  • Approval of annual report, annual financial statements (unless the company charter assigns this function to the board of directors (supervisory board)).

So, general meetings of shareholders may be held by absentee ballot in 2021 like in 2020.

27.03.2023 Requirements for holding remote LLC (JSC) annual shareholder meetings

Confirming resolutions under Article 67.1 of the Russian Civil Code

Article 67.1(3) of the Russian Civil Code provides that the composition of shareholders that have voted in person, and the resolutions adopted by vote in person must be confirmed as follows:

  • For PJSC (PAO) – by the person keeping the register of shareholders and fulfilling the function of counting commission;
  • For NPJSC (NAO) – the same as for NPJSC (NAO)   or certified by a notary;
  • For LLC (ООО) – certified by a notary, or in any other way provided for in LLC (OOO) charter.

This requirement also applies to companies with a sole shareholder.

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What documents are needed to confirm the decisions?

Resolutions adopted by general meetings are documented as follows:

  • By drawing up minutes;
  • By sole shareholder resolution.

The adoption of resolutions by general meetings of shareholders and the composition of the shareholders in attendance for adoption of resolutions are confirmed as follows:

  • For PJSC (PAO) – by the person keeping the register of shareholders and fulfilling the function of counting commission;
  • For NPJSC (NAO) – by notarization or certification by the person keeping the register of shareholders and fulfilling the function of counting commission;
  • For LLC (OOO):
    1. By notarization unless another way (signing of minutes by all or some shareholders; using technical means that make it possible to reliably establish the adoption of resolution; any other way that is not contrary to the law) is provided by the company charter; or
    2. By a notarized resolution of the general meeting of shareholders adopted by the company’s shareholders unanimously, or by notarization of sole shareholder resolution.

General meeting resolutions are documented by drawing up minutes (sole shareholder decision). Companies must keep these documents in their archives and ensure that shareholders and other persons provided by law have access to them.

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Notarization of resolutions

Please note that according to the Review of Court Practice on Certain Issues of Law Application on Business Entities (Items 2 and 3) and Supreme Court Ruling N 306-ЭС19-25147 dated December 30, 2019 in case N А72-7041/2018, general meeting resolutions providing for an alternative way to confirm corporate decisions must be notarized.

General meeting resolutions and sole shareholder decisions adopted after December 25, 2019 must be notarized.

As mentioned above, this requirement also extends to single participant decisions, which now require notarization. Besides, the requirement also applies to the decisions of the sole shareholder (letter of the Federal Notary Chamber from January 15, 2020).

Further difficulties arise for the companies where the sole participant holds 100% of the shares in the charter capital (or 100% of the shares, if the question is about JSC). Corporate decisions (appointment of the CEO and/or board of directors, charter amendments, approval of the previous financial year results, etc.) hence must be certified by a notary.

If the only participant (shareholder) is a foreign company, along with certifying decision by a foreign notary, an apostille (and therefore its subsequent notarized translation) will be required.

How to avoid the necessity to notarize every resolution of the annual meeting?

To obviate a necessity to notarize every decision of the LLC sole member (or the sole shareholder of the JSC), it is necessary to make appropriate changes to the company’s Charter (except companies with a sole member).

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What are the penalties for failing to comply with legal requirements?

Unlawfully failing or avoiding convening a general meeting as well as violating the requirements of federal laws for convening, preparing, and holding general meetings of shareholders results in:

  • The imposition of an administrative fine from RUB 20,000 to RUB 30,000, or disqualification of CEO (official representative) for up to 1 year;
  • The imposition of an administrative fine from RUB 500,000 to RUB 700,000 on the offending legal entity (Article 15.23.1 Russian Code of Administrative Offenses).

Failure to comply with document storage requirements results in:

  • The imposition of a fine from RUB 2,500 to RUB 5,000 on company officers (CEO);
  • The imposition of a fine from RUB 200,000 to RUB 300,000 on the offending legal entity.

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Our lawyers are ready to provide a full range of services on preparation, holding and registration of general meetings of LLCs and JSCs.

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