On August 01, 2024, new bill No. 103501-8 was referred to the Federation Council for consideration after its passage by the State Duma.

The Bill provides for amendments to the Federal Laws: “On Limited Liability Companies”, “On Joint Stock Companies”, “On Investment Funds”, “On the Securities Market”, establishes a new procedure for holding general meetings whereby shareholders and participants in business entities will be able to participate remotely in the meeting and make decisions on corporate matters, and introduces a number of amendments.

Election of the director of a limited liability company

From September 1, 2024, a decision on the election or appointment of a sole executive body will have to be certified by a notary who will act as an applicant for the State registration of the relevant changes.

A similar rule now applies to an increase in authorized capital.

This rule will not apply to credit and non-credit financial organizations and specialized societies.

Board of Directors of a limited liability company

From March 1, 2025, federal laws will fix the procedure for the work of the board of directors. The board of directors will be able to make decisions at meetings (including with remote participation) or by absentee voting.

The quorum for decision-making by the company’s board of directors (supervisory board) will be at least half of the elected members of the board of directors, but the charter may stipulate a higher value.

The holding of a meeting of the board of directors and voting results will be confirmed by minutes. The minutes shall be drawn up not later than 3 days after the date of the meeting or the date of the end of receipt of documents containing information on the expression of will of the members of the board of directors (supervisory board) of the company, in case of absentee voting.

Mandatory elements of the minutes will be reflected in the law.

At present, the procedure for holding meetings of the board of directors is not regulated normatively. The rules for its holding are contained in the charter or the regulations on the board of directors.

Meeting of the general meeting with remote participation in LLCs and JSCs

From 1 March 2025, when organizing a meeting, it will be necessary to provide for the possibility of participants being present at the venue, unless the charter stipulates otherwise.

A notice of a meeting of a general meeting of members of a company with remote participation will be required to specify, along with other information, information on the procedure for access to remote participation in such a meeting, including ways of reliably identifying persons taking remote participation in the meeting.

JSCs and LLCs will be required to broadcast a meeting with remote participation and keep a record of the broadcast together with the minutes for the period of their storage. If the meeting fails due to technical problems, the vote will be deemed failed.

From September 1, 2027, participants and shareholders will be required to be identified by means of a qualified electronic signature. The company’s charter or other internal document may provide for simpler methods of identification, such as a non-qualified electronic signature or authorization through the ESIA or EBS services.

Currently, the Civil Code of the Russian Federation already allows remote participation in general meeting meetings, but the procedure is determined solely by the company’s charter.

Suspension of dividend payments

The Board of Directors of a JSC will have the right to decide to suspend the payment of dividends to shareholders when a number of conditions coincide:

  • for at least 2 years in a row immediately preceding the date of the decision to suspend the sending of notices and (or) voting ballots, all notices of a meeting or absentee voting and (or) voting ballots, the sending of which in accordance with this Federal Law or the charter of the company was carried out to the mailing address of the shareholder specified in the register of shareholders of the company, were returned to the company;
  • sending notices of a meeting or absentee ballot and/or ballot papers at least 2 times within 2 consecutive years;
  • the last notice of the meeting or absentee voting contained a warning about the possibility of suspending the sending of notices/voting ballots to the postal address, as well as a notice about the shareholder’s right to send the company’s registrar up-to-date information about the shareholder’s postal address;
  • 5 working days prior to the date of making a decision on suspension of sending messages/voting ballots, the Company’s registrar has not received up-to-date information about the shareholder required for sending such messages/voting ballots to the shareholder’s mailing address, or the shareholder’s application for confirmation of the up-to-date information contained in the Company’s shareholder register.

Under similar conditions, a company will be able to suspend sending communications about a general meeting.

The resumption of the sending of correspondence and dividends to a shareholder will take place upon receipt of up-to-date information from the shareholder. No special resolution of the board of directors is required for this purpose.

Shareholders to whom payments have been suspended will be able to request that dividends be remitted to them within three years of their approval.

The bill gives non-public JSCs the right to waive the application of the new rules on suspension of dividend payments and sending correspondence by providing for the relevant provisions in the charter.

It is planned that this part of the innovations will come into force from the date of publication of the law.

Draft law № 103501-8