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April 3, 2020

Due to COVID-19 Joint Stock Companies annual meetings can be held in members absence

Briefly:

Till the end of 2020 any general members meeting including annual meeting can be held even if the members are not present notwithstanding agenda issues. Previously ordinary (annual) meetings could be conducted only in the members presence.

Details:

Since 19th of March, 2020 general members meetings regarding any organizational issues can be held in the members absence. These changes are caused by measures to struggle against COVID-19 and are accepted only in order to exclude personal contacts between the members during the meeting.

In accordance with the Federal Law No. 50-FL1 in 2020 on the basis of the resolution of board of directors if the members are not present, it is possible to conduct general members meeting regarding the following issues:

  • Election of company board of directors (supervisory board),
  • Election of company revision commission,
  • Approval of company auditor,
  • Approval of annual report and annual financial report providing that board of directors (supervisory board) shall be responsible for their approval according to the Articles of Association.

Consequently, till the end of 2020 any general meeting of the members including annual meeting can be held in the absence of the members notwithstanding agenda issues. It should be mentioned that this offer may be used only under the decision of the board of directors.

We believe that if there is no board of directors in the Joint Stock Company then according to Cl. 1 of the Art. 64 of the Law on Joint Stock Companies in such conditions a person or company authority shall be defined in the Articles of Association and it has to be responsible for conducting general meeting and for approving its agenda. In this case such entity is entitled to decide how the meeting will be held.

Adopted amendments does not influence key issues of corporate management in Joint Stock Companies but only allow to decrease the risks of undesirable consequences for natural entities by not involving their corporate rights.   

Recommendations:

When the meeting is held in the absence of the members it is necessary to comply with corporate procedures and the terms stated by the law. 

Confirmation of members meeting resolution (by the notary or registrar) is not required if the meeting is conducted in the absence of the members.

These introductions are only applied to general meetings in the Joint Stock Companies. Annual general meetings of the Limited Liability Companies shall be conducted as before.

 


1 “On the purchase by the RF Government from the RF Central Bank of ordinary shares of Sberbank of Russia PJSC and on declaring certain RF legislation act regulations invalid”.

Help of the consultant:

Specialists of the law firm Amond & Smith have significant experience in provision of consultations regarding issues of corporate law, including representation and protection of members rights and management authorities of the Joint Stock Companies and would like to assist in solving the questions concerning general meetings which are held in the absence of the members.

For additional information please contact specialists of the Corporate Practice.

The material was prepared by:

  • Vladimir Danilevsky, the Head of Russian Law Group of the law firm Amond & Smith
  • Sofia Ibragimova, lawyer assistant of Russian Law Group of the law firm Amond & Smith

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