Federal laws substantially amending the procedure for registration and existence of legal entities entered into force on July 1, 2015.

Public and non-public status of a joint stock company

New edition of Federal Law No.208-FZ “On joint stock companies” dated December 26, 1995 establishes public and non-public forms for joint stock companies, which shall be specified in their charter and in the company name. The law also establishes the procedure that a non-public company shall follow to acquire public status, as well as sets forth the procedure for terminating the company’s public status.

The law now establishes the minimum amount of the charter capital of a public company (100,000 rubles) and a non-public company (10,000 rubles) in form of a fixed amount, with  no references to the minimum wage.

Changes in the scope of powers of the joint stock company’s management bodies

Now the scope of powers of the company’s board of directors is more flexible and can be expanded by the shareholders. The shareholders may delegate to the board of directors certain issues which the law delegates to earlier referred to the competence of the general meeting of shareholders.

The provisions regulating the term of office for the company’s executive bodies are changed as well. If on expiry of the term of the company’s executive bodies, the decision on appointing new executive bodies is not adopted, the powers of the company’s executive bodies shall remain in force until such decisions are adopted.

The charter of a non-public company may provide for the number of votes needed for the general meeting of the shareholders to adopt a decision that is different from the number of votes established by law. However, the shareholders will not be entitled to establish an alternative quorum having less votes than what is established by law.

Changes in using standard charters by legal entities

Starting from December 29, 2015, limited liability companies will be able to act based on a standard charter approved by the authorized state body. Currently, such authorized body is not determined, but there are grounds to believe that in the near future the Federal Tax Service of Russia will be granted such powers.

The standard charter will not contain information about the name, location and amount of the charter capital of a legal entity, and this information will be specified in the Unified State Register of Legal Entities (the “EGRUL”), as well as information that a legal entity is acting based on the standard charter. Furthermore, a simplified procedure for making changes to the name, address and amount of the charter capital is established for legal entities using the standard charter.

The decision on using the standard charter can be adopted when establishing the company, as well as at any time during the company’s activity.

Change of procedure and timeframes for state registration

Starting from July 1, 2016, the timeframes for state registration of the legal entities and individual entrepreneurs are reduced from five to three business days. The same period is provided for adopting a decision on refusal in state registration.

Furthermore, starting from July 1, 2016, new amendments changing the procedure for state registration of a legal entity’s address enter into force. Documents confirming the right to use a real estate facility at the new location address of a legal entity shall be enclosed with the application for registering such information with EGRUL.

The procedure for changing the address of a legal entity has also been made more complicated and starting from July 1, 2016 is to be conducted in two steps:

1. Adopting the decision on changing the address and entering information about such decision into the EGRUL;
2. Submitting documents to the registration authority for the purposes of state registration of the address change. A legal entity is entitled to apply for registration of the change of its address no earlier than 20 days after adopting the respective decision.

Anastasia Fomicheva   Senior Associate   St. Petersburg    afomicheva@cls.ru   Tel.: +7 (812) 346 79 90

Anna Chaykina   Associate    St. Petersburg       Tel.: +7 (812) 346 79 90

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Anastasia Fomicheva  or Anna Chaykina , St. Petersburg Office of Capital Legal Services.

This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.