Annual General Meeting of Shareholders Deadline is April 30, 2019
We would like to remind you that Russian law requires that limited liability companies and joint-stock companies hold annual general meetings of participants / shareholders to approve their annual results, as well as elect their board of directors, internal audit commission (internal auditor), appoint their auditor and approve their annual reports, annual financial statements, including profit and loss statements (provided the company’s charter does not assign this matter to the competence of the board of directors), and distribute their profit and dividends.
The company charter sets out the time period for holding general meetings, which should be by law for limited liability companies between March 01, 2019 and April 30, 2019, and for joint-stock companies between March 01, 2019 and June 30, 2019.
What documents are needed to confirm the decisions?
The decisions adopted by general meetings are documented by meeting minutes or sole participant decisions. According to the amendments introduced to civil law on September 01, 2014, the adoption of decisions by general meetings of participants/shareholders and the list of participants/shareholders attending meetings are confirmed:
- for public joint-stock companies by the person maintaining the company’s share register and fulfilling the function of counting commission;
- for non-public joint-stock companies by notarization or certification by the person maintaining the company’s share register and fulfilling the function of counting commission;
- for limited liability companies by notarization, unless the company charter provides for another method (for example, signing of the minutes by all or some participants; using technical means enabling to indisputably establish the adoption of decision; by other means not contrary to the law), or by decision of the company’s general meeting of participants adopted by the company’s participants unanimously.
The decisions adopted by general meetings are documented by meeting minutes (sole participant/shareholder decision), and companies are required to keep these minutes in their archives permanently and ensure they are available to participants/shareholders and other persons provided by law.
What happens if a company doesn't follow these rules?
If a company unlawfully refuses or avoids to call a general meeting of participants/shareholders, as well as fails to meet the requirements of the law for calling, preparing and holding general meetings of participants/shareholders, an administrative fine from RUB 20,000 to RUB 30,000 or disqualification for a period of up to one yearwill be imposed on the offending company’s general director (official representative), and a fine from RUB 500,000 to RUB 700,000 will be imposed on the offending company (Article 15.23.1 Russian Code of Administrative Offenses).
If a company fails to fulfill the document safekeeping obligations provided by law, an administrative fine from RUB 2,500 to RUB 5,000 will be imposed on the offending company’s general director, and a fine from RUB 200,000 to RUB 300,000 will be imposed on the offending company.
At your request, Accountor would be pleased to prepare your company’s general meeting minutes for 2019. Please contact us.