Russian LLC: annual shareholders’ meetings in 2020 can be held in form of remote voting

 

On July 31, 2020 the amendments to Federal Law No. 115-FZ entered into force (Federal Law No. 297-FZ dated 31 July 2020). In 2020 these amendments allow Russian LLCs to hold annual shareholders’ meetings in form of remote voting, on which the yearly reports and balance sheets must be confirmed. Previously these issues were exempted from the general permissibility of remote voting in Russian LLCs. According to previous amendments of the corporate law due to COVID-19 the annual shareholders’ meetings in the Russian LLCs can be held until 30 September 2020.

The new provisions facilitate holding of the annual shareholders’ meetings, because holding of meetings in-person is difficult due to the still existing travel limitation, even though many restrictions due to COVID-19 have already been canceled. In 2020 the remote voting can be organized upon corresponding resolution of the general director (CEO) of a Russian LLC. Similar regulations for Russian joint-stock companies are already in force (Federal Law No. 50-FZ dated 18 March 2020).

Despite the above mentioned law amendments the remote voting can be performed only if it is allowed by the charter of an LLC or at least not prohibited there (many charters contain the relevant clause allowing remote voting as a standard) and if there is an internal regulation governing the procedure of remote voting. As a rule only few LLCs have internal regulations regarding remote voting procedure (or relevant regulations on remote voting in the charter). In our view in 2020, as an exception, the rules on remote voting procedure can be provided in the resolution of the general director on holding the annual shareholders’ meeting in the form of remote voting.

We recommend our clients to arrange for the holding of the annual meeting in Russian LLC having more than one shareholder in due time and to consider the application of remote voting. Our experts will be glad to assist in this issue.

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