On January 1, 2023, a new law took effect, extending a number of anti-crisis measures – the Federal Law No.519 “On introducing amendments to certain legislative acts of the Russian Federation an on suspending the effect of certain provisions of legislative acts of the Russian Federation. In this brief, we will examine the most significant measures in corporate relations.

Holding annual JSC and LLC meetings in absentee form

The ban on holding JSC annual shareholder meetings in form of absentee voting has been suspended until December 31, 2023 in regard to the following issues: (i) election of the board of directors or internal audit committee, (ii) approval of the company auditor and (iii) approval of the annual report and annual accounting/financial reports (if the company charter does not delegate these issues to the competence of the board of directors).

For LLCs, the ban on meetings in form of absentee voting has been suspended until December 31, 2023 for approving (i) annual reports and (ii) annual accounting/financial reports.

In order to hold voting on these issues in absentee form, an appropriate resolution is needed from the JSC’s board of directors (or supervisory board) or the LLC’s executive body.

Therefore, in 2023, a general shareholders meeting can be held in form of absentee voting, irrespective of the meeting agenda.

Decrease of net asset value for JSCs and LLCs to less than the charter capital

If as of the end of 2023 the value of net assets of a JSC or LLC falls below the size of the charter capital, this will not be taken into account for purposes of adopting a mandatory decision on decreasing the size of the charter capital to the value of the net assets or on the company’s liquidation.

JSC board of directors

In 2023, the JSC general meeting can elect members of the board of directors for a longer term, until the third annual general meeting from the time of election. Earlier, including in 2022, board of directors’ members were elected annually, until the next annual general meeting.

In addition, an extension is adopted for 2023 to the rule where if the number of members of a board of directors of a JSC drops below the number prescribed by the law, charter or resolution of the general meeting, the board retains its powers until the company meeting elects a new board of directors if there are at least three members remaining on such board. In this case, a meeting of the board of directors will be valid if at least half of the remaining members participate in it.

Rights of JSC shareholders

In 2023, the threshold for shareholders to obtain information and documents on the JSC’s activity will remain higher than before. Shareholders with at least 5% voting shares (as opposed to 1% as per the general rule of Clauses 2 and 3 Article 91 of Federal Law No.208 “On joint stock companies”) are entitled to access the following documents: (i) list of persons entitled to participate in a general meeting of shareholders, (ii) information on related-party transactions and major transactions, (iii) reports on appraisal of the company’s property in respect to which related-party transactions and major transactions were conducted, (iv) minutes of meetings of the company’s board of directors or supervisory board and (v) documents of a non-public JSC which are to be maintained by law.

In addition, in 2023, the shareholding threshold for filing a lawsuit has been raised. Now, a lawsuit on deeming void a related-party transaction or a major transaction, as well as on recovering losses caused to the company by the management bodies can be filed by shareholders owning at least 5% of voting shares.

Legal brief is prepared by Senior Associate of Corporate practice Capital Legal Services Elizaveta Dvoinishnikova and paralegal Ekaterina Shilovskaya.