Appointment of 2 Directors in a Russian company
We are frequently asked whether it is possible that companies in Russia have 2 directors. Our lawyers answered this question in the article below.
A company may have more than one director, provided the responsibilities of each director are divided and specified in the company’s charter. Article 53 of the Russian Civil Code as amended on 01 September 2014 sets out that company charters may provide for several persons to act on behalf of the company as an executive body (director) jointly or separately without power of attorney.
The number of directors and a description of the authorities assigned to each director must be registered with the State Register of Legal Entities. Any person holding an executive position at the Board of a foreign company (participant) may be appointed as an authorized person. Company charters are to divide the competence of directors and set out the rights of each director (rights to act on behalf of the company without power of attorney, including the right to represent the company’s interests; right to conclude transactions; right to issue to other parties a power of attorney authorizing to act on behalf of the company; right to issue employment, employee transfer and dismissal orders, orders for disciplinary sanctions; right to perform other functions not provided by law and not contrary to shareholder/participant functions).
Examples where several directors can be appointed:
- 2 founders have equal shares in a limited liability company. To protect the interests of both shareholders, the company can appoint 2 directors who should act jointly. All decisions should be adopted unanimously and all documents drawn up on behalf of the company should be signed by both directors;
- A company has 2 independent directors with each being the head of a specific business area, such as, for example, finance and manufacturing. Each of these directors is entitled to represent the company without power of attorney, but only in his/her field;
- The general director of a company travels a lot so the shareholders decide to appoint 2 directors with equal rights to act independently from each other. The company’s documents may be signed by any of these directors.
When a company appoints 2 directors, the company must:
- Approve the company’s charter as amended (sole shareholder decision or general meeting of shareholders);
- Register the new charter and general director details with the State Register of Legal Entities;
- Obtain a new bank signature card.
At your request, we would be pleased to discuss how to appoint more than one director, how to revise the charter and register the details of the appointed directors with the State Register of Legal Entities and bank as well as to help you with any other legal aspects of conducting business in Russia.