Starting from July 1, 2021, remote voting of company shareholders is allowed for meetings in person and new rules on absentee voting enter into force.

Federal Law No.225-FZ “On amendments to Part One of the Civil Code of the Russian Federation” dated June 28, 2021, which took effect on July 1, 2021, sets forth that shareholders of legal entitiescan participate in sessions of their general meetings remotely using electronic or other technical means. Previously, such an option was expressly provided only for joint stock companies.

The main requirement for remote participation in a general meeting is the use of any means that allow to identify the person taking part in the meeting, as well as to give them an opportunity to participate in discussion of issues on the agenda and to vote.

The right of remote participation and the particular means may be provided for by (i) the law; (ii) a unanimous resolution of shareholders; (iii) the charter of a company. Please note that the law itself does not currently set forth any specific means of remote participation in a meeting. These means (such as, for example, participation by a video conference via Zoom, etc.) can be stipulated in the charter or in a resolution of shareholders of the company.

Additionally, the amendments specify that the resolution of the meeting may be adopted by absentee voting by means of documents confirming voting details being submitted by at least 50% of the total number of shareholders of a legal entity. The law does not establish whether this procedure will require formalization in the company's bylaws regulating absentee voting. However, in order to avoid disputes, we would recommend including the respective provision in the bylaws. Please note that the resolution is generally deemed adopted if a majority of participants who sent in the abovementioned documents voted for the said resolution.

Same as before, generally, the fact of the meeting having been held or the results of absentee voting conducted are to be formalized in minutes of the meeting. However, the law, or a unanimous decision of the shareholders, or the charter may provide for another means for confirming the meeting or the results of absentee voting. The law does not contain any examples of such means (for example, video recording of the meeting on a memory stick). Therefore, the choice of these alternative means is left to the discretion of shareholders.

At the same time, we note that the law still sets forth that significant violation of the rules for drawing up the minutes, including the requirement of its written form, remains a ground for invalidation of a resolution. Therefore, for the time being we recommend staying with the traditional rules on drawing up minutes as a confirmation of the meeting or absentee voting until the courts recognize alternative means.

The possibility of combining participation in the session of the meeting in person and remotely remains unclear. It seems that the law does not prohibit such combination, since personal and remote participation are both permissible types of participation in a session of the general meeting (for the in-person form). As an additional guarantee, this issue may be resolved in the charter. At the same time, the amendments in the law expressly provide for the possibility of a combination of voting at the meeting and absentee voting under certain conditions.

Please note that under the new law, an LLC’s or a private JSC’s charter can no longer vary the procedure for calling general meetings from that prescribed by law. Thus, there is a possibility that the procedure for calling general meetings may be subject to alteration by a company’s charter to the extent special laws allow varying such regulations in the charter (e.g. Art. 36(1), Art. 36(4) of Federal Law No.14-FZ “On limited liability companies” dated February 8, 1998). At the same time, the amendments provide for the possibility to establish a procedure for adopting decisions on holding a session of a general meeting (absentee voting) in the charter, which differs from the one established by law.

Some amendments have also been introduced to the rules for declaring resolutions of meeting invalid.

This overview is prepared by Capital Legal Services Partner Dmitry Churin, Of Counsiel Mikhail Dikopolskiy and Senior Assosiate Alexey Fedorov. You can download pdf-version here.