Annual General Meeting of Shareholders Deadline is April 30, 2020
The laws on LLC (in Russian OOO) and joint-stock companies (in Russian AO) require these legal entities to hold annual general meetings of shareholders to approve their annual results. The following matters are resolved at annual general meetings:
- Election of the company’s board of directors and revision group (auditor);
- Approval of the company’s auditor;
- Approval of annual reports, annual financial statements, including profit and loss statements (unless the company charter confers this matter to the board of directors);
- Distribution of profits and payment of dividends.
The deadline for OOO to hold annual meetings is set by the company charter and may not be earlier than March 01, 2020 and no later than April 30, 2020. For АО the deadline may not be earlier than March 01, 2020 and no later than June 30, 2020.
What documents are needed to confirm the decisions?
Decisions adopted at general meetings are documented by:
- Minutes; or
- Sole shareholder decision.
The adoption of decisions at general meetings of shareholders and the composition of the company shareholders in attendance upon their adoption are confirmed:
- In public joint-stock companies by the person maintaining the register of company shareholders and fulfilling the function of vote counter;
- In non-public joint-stock companies by notarization or certification by the person maintaining the register of company shareholders and fulfilling the function of vote counter;
- In limited liability companies:
- By notarization unless otherwise provided in the company charter (e.g. signing of minutes by all or some shareholders; using technical means allowing to reliably establish the adoption of decisions; other ways not contrary to the law); or
- By notarized decision of general meeting of shareholders unanimously adopted by the company’s shareholders or by notarized sole shareholder decision.
General meeting decisions are documented by the relevant minutes (sole shareholder decision). Сompanies are required to keep these documents in their archives and ensure that shareholders and other persons authorized by law have access to them.
Mandatory notarization of decisions
Please note that a general meeting decision providing for another way of decision confirmation will need to be notarized as indicated in Items 2 and 2 of Digest of Case Law on Some Issues of Application of the Law on Business Entities and Russian Supreme Court Ruling N 306-ЭС19-25147 dated December 30, 2019 Case N А72-7041/2018.
Decisions of general meetings of shareholders and sole shareholder decisions adopted after December 25, 2019 must be notarized
What penalties are provided for failing to meet the requirements of the law?
If a company unlawfully declines to hold or avoids holding a general meeting of shareholders, as well as fails to meet the requirements of federal laws for convening, preparing and holding general meetings of shareholders, the following penalties will be imposed on the company:
- A fine from RUB 20,000 to RUB 30,000 or disqualification of the company’s general director (official representative) for up to 1 year;
- A fine from RUB 500,000 to RUB 700,000 on legal entities (Article 15.23.1 Russian Code of Administrative Procedure).
If the requirements for document storage are not fulfilled, the following fines will be imposed:
- A fine from RUB 2,500 to RUB 5,000 on company officers (general director);
- A fine from RUB 200,000 to RUB 300,000 on legal entities.
At your request, we would be pleased to prepare general meeting minutes for your company, so please feel free to contact us.