Notarization of Decision of a Sole Participant

New rules of execution of minutes of general meetings and decisions of sole participants: notary is obligatory.

In this alert we draw your attention to the new rules of execution of minutes of general meetings and decisions of sole participants.

General information

On December 25, 2019 the Supreme Court of the Russian Federation issued a court practice survey with respect to certain questions of application of legislation on limited liability companies (the “Survey”). Thereby, the Supreme Court of the Russian Federation has considerably changed corporate practice relating to adoption decisions by the sole participant of a limited liability company. It is specified in the Survey that the requirement to notarize decisions taken by the general meeting of participants provided by Article 67.1 of Russian Civil Code applies also to decisions made by the sole participant.

Further to the Survey, on January 15, 2020 the Federal Notary Chamber issued a letter No.121/03-16-3 containing advice for the notaries on the issues to pay attention to and actions to be taken when receiving the minutes of the general meeting of participants or decisions of the sole participant when carrying out notary procedures.

Changes in practice

Regarding the Survey publication the relevant changes have occurred in practice:

  • all decisions made by the sole participant of a company after December 25, 2019 are subject to notary certification. This means it is impossible to carry out the relevant registration procedure based on the decision signed by the sole participant without notary certification as the relevant decision would be considered void;
  • decision of the sole participant and minutes of the general meeting on alternative way to certify the adoption of decisions (participants composition) is also subject to notary certification;
  • decision of the sole participant and the general meeting on amendments to the charter of the company relating to alternative way to certify the adoption of decisions (participants composition) is also subject to notary certification;
  • in order to mitigate notary certification of each subsequent decision/minutes one should amend the charter of the company with provisions on alternative way to certify the adoption of decisions adoption by the sole participant or the general meeting.

Recommendations

Following the relevant changes, one should consider to:

  • check the charter for presence of provisions on alternative way to certify the adoption of decisions by the general meeting (the sole participant);
  • amend the charter with provisions on alternative way to certify the adoption of decisions by the general meeting (the sole participant) in case  the relevant provisions are not included in the charter; for registration of the relevant changes there is a need to issue the relevant decision (minutes) and notarize it in due order;
  • check decisions adopted by the sole participant or the general meeting after December 25, 2019. In case the charter does not contain provisions on alternative way to certify the adoption of decisions the relevant decisions require notary verification.
  • We additionally remind that during the period from March 1 to April 30 all Limited Liability Companies, unless their charters set a different time period, must hold ordinary general meetings of participants in order to approve annual performance results, or approve the results by decision of a sole participant. The minutes of ordinary general meetings, as well as decisions of the sole participant, should be  obligatorily drawn up in accordance with the new rules described above.

Mazars legal team will be happy to assist you in review of the statutory documents and resolutions, developing current versions, as well as in solving other issues in the field of corporate law and enforcement.

Document

March 2020. Notarization of Decision of a Sole Participant (RU, ENG)
March 2020. Notarization of Decision of a Sole Participant (RU, ENG)