Federal Law No. 625-FZ of December 25, 2023, as well as Presidential Decree No. 958 of December 18, 2023, extended anti-crisis measures for 2024. Some of the measures still concern the corporate relations.
Decision-making by management bodies of legal entities
The possibility to hold annual meetings in JSCs and LLCs in the form of absentee voting has been extended until the end of 2024. For the first time such an opportunity appeared for the shareholders as a result of a pandemic, and then it was extended annually.
Board of Directors (Supervisory Board) in a joint stock company
Until July 1, 2024, the Board of Directors of a JSC retains its powers until the re-election of a new composition, if its quantitative composition becomes less than that provided for by law, but retains at least 3 members. In such a case, a meeting of the Board of Directors is legally competent if at least half of the remaining members participate in the meeting.
Members of the Board of Directors of a JSC may be elected for a term of up to the third annual general meeting of shareholders from the date of election (previously – for a period until the next general meeting).
Until July 1, 2024, in companies in respect of which restrictive measures have been imposed by foreign states and international organizations, the Board of Directors, even if its formation is provided for by law or the charter, may not be formed at all.
Restriction of rights of shareholders
Until July 1, 2024, there are increased shareholding requirements for access to information and documents of a Russian JSC or the right to appeal to a court. Until 2022, the holder of 1% of the company's shares had such an opportunity, today it is from 5%.
Until the end of 2024, the possibility to suspend the corporate rights of so-called “unfriendly” foreign shareholders holding at least 25% of the votes in the supreme governing body of a significant business entity or having another opportunity to exercise the voting rights granted by shares in the authorized capital of such entity is retained.
The right of energy, electric power, machine building and trade companies that meet certain criteria to make decisions without taking into account the votes of, inter alia, persons from “countries committing unfriendly acts”, if such persons are members of the management body, has been extended until the end of 2024.
Restriction of transactions/operations
Presidential Decree No. 958 extends until the end of 2025 the ban on transactions (operations) with securities and shares in authorized capitals of Russian legal entities owned by non-residents from “unfriendly” countries.
Also extended until the end of 2024 is the ban on residents carrying out certain transactions without obtaining authorizations from the Bank of Russia, such as:
The above list of measures is not exhaustive and also affects other areas. Among other things, restrictions related to repatriation of foreign currency proceeds[1] have been extended until July 1, 2024, special measures in the financial and fuel and energy sectors[2] and existing restrictions in the sphere of currency regulation[3] have been extended until December 31 of this year.
[1] Presidential Decree No. 430 from July 5, 2022 "On repatriation of foreign currency and currency of the Russian Federation by residents - participants of foreign economic activity".
[2] Presidential Decree No. 520 from August 5, 2022 "On the application of special economic measures in the financial and fuel and energy spheres in connection with unfriendly actions of certain foreign states and international organizations".
[3] Presidential Decree No. 126 of March 18, 2022 "On additional temporary measures of economic nature to ensure financial stability of the Russian Federation in the sphere of currency regulation".
Decision-making by management bodies of legal entities
The possibility to hold annual meetings in JSCs and LLCs in the form of absentee voting has been extended until the end of 2024. For the first time such an opportunity appeared for the shareholders as a result of a pandemic, and then it was extended annually.
Board of Directors (Supervisory Board) in a joint stock company
Until July 1, 2024, the Board of Directors of a JSC retains its powers until the re-election of a new composition, if its quantitative composition becomes less than that provided for by law, but retains at least 3 members. In such a case, a meeting of the Board of Directors is legally competent if at least half of the remaining members participate in the meeting.
Members of the Board of Directors of a JSC may be elected for a term of up to the third annual general meeting of shareholders from the date of election (previously – for a period until the next general meeting).
Until July 1, 2024, in companies in respect of which restrictive measures have been imposed by foreign states and international organizations, the Board of Directors, even if its formation is provided for by law or the charter, may not be formed at all.
Restriction of rights of shareholders
Until July 1, 2024, there are increased shareholding requirements for access to information and documents of a Russian JSC or the right to appeal to a court. Until 2022, the holder of 1% of the company's shares had such an opportunity, today it is from 5%.
Until the end of 2024, the possibility to suspend the corporate rights of so-called “unfriendly” foreign shareholders holding at least 25% of the votes in the supreme governing body of a significant business entity or having another opportunity to exercise the voting rights granted by shares in the authorized capital of such entity is retained.
The right of energy, electric power, machine building and trade companies that meet certain criteria to make decisions without taking into account the votes of, inter alia, persons from “countries committing unfriendly acts”, if such persons are members of the management body, has been extended until the end of 2024.
Restriction of transactions/operations
Presidential Decree No. 958 extends until the end of 2025 the ban on transactions (operations) with securities and shares in authorized capitals of Russian legal entities owned by non-residents from “unfriendly” countries.
Also extended until the end of 2024 is the ban on residents carrying out certain transactions without obtaining authorizations from the Bank of Russia, such as:
- payment for shares, deposits, units in the property of foreign legal entities;
- making contributions to a non-resident as part of the execution of a simple partnership agreement with investment in the form of capital investments.
The above list of measures is not exhaustive and also affects other areas. Among other things, restrictions related to repatriation of foreign currency proceeds[1] have been extended until July 1, 2024, special measures in the financial and fuel and energy sectors[2] and existing restrictions in the sphere of currency regulation[3] have been extended until December 31 of this year.
[1] Presidential Decree No. 430 from July 5, 2022 "On repatriation of foreign currency and currency of the Russian Federation by residents - participants of foreign economic activity".
[2] Presidential Decree No. 520 from August 5, 2022 "On the application of special economic measures in the financial and fuel and energy spheres in connection with unfriendly actions of certain foreign states and international organizations".
[3] Presidential Decree No. 126 of March 18, 2022 "On additional temporary measures of economic nature to ensure financial stability of the Russian Federation in the sphere of currency regulation".