Federal Law N 14-FZ of February 8, 1998 on Limited Liability Companies

FEDERAL LAW
NO. 14-FZ OF FEBRUARY 8, 1998
ON LIMITED LIABILITY COMPANIES
(with the Amendments and Additions of July 11, December 31, 1998, March 21, 2002, December 29, 2004, July 27, December 18, 2006, April 29, December 30, 2008, July 19, 2009, August 02, 2009)

 

Adopted by the State Duma on January 14, 1998

Approved by the Federation Council on January 28, 1998

This Federal Law shall be applied with taking account of provisions of Federal Law No. 175-FZ of October 27, 2008

On specific issues of the application of this Federal Law see Decision of the Plenary Session of the Supreme Court of the Russian Federation and the Plenary Session of the Higher Arbitration Court of the Russian Federation No. 90/14 of December 9, 1999

 

Chapter I. General Provisions

Article 1. Relations Regulated by the Present Federal Law

  1. The present Federal Law defines the legal status of a limited liability company, the rights and duties of its partners, the procedure for the creation, reorganisation or liquidation of a company in conformity with the Civil Code of the Russian Federation

Federal Law No. 272-FZ of December 22, 2008 amended Item 2 of Article 1 of this Federal Law. The amendments shall enter into force from January 1, 2010

  1. The specific features of the legal status, the procedure for the creation, reorganisation or liquidation of a limited liability company in the spheres of banking, insurance and investment, and also of the agricultural production shall be determined by federal laws.

On the peculiarities of the creation of credit organisations, see the Law on Banks and Banking Activity in the wording of February 3, 1996

Federal Law No. 58-FZ of April 29, 2008 supplemented Article 1 of this Federal Law with Item 3

  1. Relations connected with making by foreign investors, or a group of persons that includes a foreign investor, transactions in shares constituting the authorised capital of a limited liability company which is of strategic importance for ensuring the country’s defence capacity and state security and with institution of control over such companies by foreign investors or by a group of persons which includes a foreign investor shall be regulated in compliance with the provisions of the Federal Law on the Procedure for Making Foreign Investments in Economic Companies Which Are of Strategic Importance for Ensuring the Country’s Defence Capacity and State Security.

Article 2. The Basic Provisions on Limited Liability Companies

  1. As a limited liability company (hereinafter referred to as a company) shall be deemed a business company established by a single person or by several persons whose authorised capital is divided into shares; the company participants shall not be liable under its obligations and shall bear the risk of losses associated with the company’s activity to the extent of the value of the shares in the company’s authorised capital they hold.

The company’s participants who have made not paid in full for their shares shall bear joint responsibility under its obligations within the limits of the value of the unpaid part of the shares in the company’s authorised capital they hold.

  1. The company shall own isolated property booked on its independent balance, may acquire and realize property and personal non-property rights, bear duties, sue and be held liable in court.

The company may enjoy civil rights and bear civil duties necessary for the performance of any kind of activity that is not banned by federal laws, unless this contradicts the subject-matter and purposes of activity defined by the company’s charter.

The company may engage in certain kinds of activity, the list of which is determined by federal law, only on the basis of a special permit (license). If the terms of a special permit (license) provide for a definite kind of activity as exclusive, the company shall be entitled during the period of the validity of the special permit (license) to carry out only such activity as provided for by this special permit (license), and related kinds of activity.

  1. The company shall be deemed to the established as a legal entity from the time of its state registration in the procedure stipulated by the Federal Law on the state registration of legal entities.

On the state registration of legal entities see:

The Civil Code of the Russian Federation

Federal Law No. 129-FZ of August 8, 2001 on the State Registration of Legal Entities

A company shall be set up for an indefinite period unless otherwise stipulated by its charter.

  1. The company shall have a round stamp containing its full firm’s name in Russian and indicating its location. The company’s stamp may also contain the firm’s name in any language of the peoples of the Russian Federation and/or in a foreign language.

The company shall have the right to have stamps and letter heads with its firm’s name, its own emblem, and also its trademark registered in the statutory order and other means of individualization.

Article 3. A Company’s Liability

  1. A company shall bear liability for its obligations to the extent of all the property that belongs to it.
  2. The company shall not be liable for the obligations of its participants.
  3. In the event of the company’s insolvency (bankruptcy) through the fault of its participants or of other persons who have the right to give instructions binding on the company or in any other way determine its actions, subsidiary responsibility for its obligations may be attributed to the said participants or other persons, if the company’s property is insufficient.
  4. The Russian Federation, its subjects and the municipal entities shall not bear liability for the company’s obligations, just as the company shall not bear liability for the obligations of the Russian Federation, its subjects and municipal entities.

 

Federal Law No. 231-FZ of December 18, 2006 amended Article 4 of this Federal Law. The amendments shall enter into force from January 1, 2008

See the Article in the previous wording

Article 4. A Company’s Trade Name and Its Location

  1. A company shall have a full name and may have an abbreviated trade name in Russia. The company may also have a full and/or abbreviated trade name in the languages of the peoples of the Russian Federation and/or in foreign languages.

The full trade name of a company in Russian shall contain the full name of this company and the words ” limited liability”. The abbreviated trade name of a company in Russian shall contain the full or abbreviated name of this company and the word “limited liability” or the abbreviation 000.

The official designation of the company in the Russian language and in the languages of the peoples of the Russian Federation may contain foreign borrowed words in the Russian transcription or in the transcription of the languages of the peoples of the Russian Federation, with the exception of the terms and abbreviations reflecting the company organisational-legal form.

Different demands on the company official designation shall be established in the Civil Code of the Russian Federation.

  1. The location of a company shall be determined by the place of its state registration.

Article 5. A Company’s Branches and Representative Offices

  1. A company sets up its branches and opens representative offices by decision of a general meeting of the company’s participants, adopted by a two-thirds majority of votes of the company’s participants, unless its charter provides for a larger number of votes for the adoption of such decision.

Branches shall be set up by the company and its representative offices shall be opened on the territory of the Russian Federation with the observance of this Federal Law and other federal laws, and beyond the confines of the Russian Federation also in conformity with the legislation of the foreign State on whose territory branches are set up or representative offices are opened, unless otherwise stipulated by the international treaties and agreements of the Russian Federation.

  1. A company’s branch shall be an isolated subdivision which is located outside the company’s whereabouts and which discharges all its functions or a part thereof, including the functions of its representative office.
  2. A company’s representative office shall be an isolated subdivision which is located outside the company’s whereabouts and which furthers the interests of the company and protects them.
  3. A company’s branch and representative office shall not be legal entities; they shall function on the basis of regulations approved by the company. The branch and the representative office shall be vested with property by the company which set up them.

The managers of the company’s branches and representative office shall be appointed by the company and shall act on the basis of a power of attorney.

The company’s branches and the representative offices shall carry out their activity on behalf of the company that set them up. The responsibility for the activity of its branch and representative office shall be borne by the company that set them up.

  1. The company’s charter shall contain information about its branches and representative offices. Data on changes in the company’s charter of information about its branches and representative offices shall be presented to the body that carries out the state registration of legal entities. The said changes in the company’s charter shall take effect for third persons from the time of the notification of the body which effects the state registration of legal entities about such changes.

Article 6. Subsidiary and Dependent Companies

  1. The company may have subsidiaries and dependent economic companies with the status of a legal entity, which are set up on the territory of the Russian Federation in accordance with the present Federal Law and other federal laws and beyond the confines of the territory of the Russian Federation also in conformity with the legislation of a foreign State on whose territory a subsidiary or a dependent economic company has been set up, unless otherwise stipulated by the international treaties and agreements of the Russian Federation.
  2. A company shall be recognized as a subsidiary, if another (principal) company or partnership by virtue of the predominant participation on its authorized capital or in conformity with an agreement concluded between them, or in any other way, is able to determine decisions to be adopted by such company.
  3. The subsidiary shall not be liable for the debts of the principal company (partnership).

The principal company (partnership), which has the right to give directions binding on its subsidiary, shall be liable jointly with the subsidiary for transactions concluded by the latter in pursuance of such directions.

In the event of the insolvency (bankruptcy) of the subsidiary through the fault of the principal company (partnership), the latter shall bear subsidiary liability for its debts, if the subsidiary’s property is insufficient for this purpose.

The participants of the subsidiary shall have the right to demand compensation by the principal company (partnership) of the losses caused through its fault to the subsidiary.

  1. A company shall be recognized as dependent, if another (prevalent, participating) company has over 20 percent of the former company’s authorized capital.

A company which has acquired over 20 percent of the voting shares of a joint-stock company or over 20 percent of the authorized capital of another limited liability company shall be obliged to publish information about this in the press organ that publishes data on the state registration of legal entities.

Article 7. A Company’s Participants

  1. Individuals and legal entities may be participants of a company.

A federal law may prohibit or restrict the participation of some categories of individuals in companies.

  1. State bodies and local self-government bodies shall not have the right to be participants of a company, unless otherwise stipulated by federal law.

A company may be established by one person, who becomes its sole participant. Subsequently a company may become a company with one participant.

A company may not have another economic company consisting of one person as the only participant.

The provisions of this Federal Law shall extend to companies with one participant inasmuch as this Federal Law does not stipulate otherwise and inasmuch as this does not contradict the substance of appropriate relations.

  1. The number of a company’s participants shall not be more than 50.

If the number of the company’s participants exceeds the limit established by this item, the company shall be transformed into a public company or a production cooperative during one year. If during the said time the company is not transformed and the number of the company’s participants does not diminish to the limit fixed by this item, it shall be liquidated in due course of law at the demand of the body which carries out the state registration of legal entities, of other governmental bodies or local self-government bodies that have the right to make such demands on the basis of federal law.

Article 8. The Rights of the Company’s Participants

  1. The company’s participants shall have the right:

to take part in the management of the company in the Procedure prescribed by this Federal Law and the company’s rules;

to receive information about the company’s activity and to study its account books and other documents in the Procedure established by its rules;

to take part in the distribution of profit;

to sell or in any other way to alienate its share in the company’s authorized capital or a part thereof to one or several participants of this company in the procedure prescribed by this Federal Law and the company’s rules;

to withdraw from the company by way of alienation of its share to the company, if such possibility is provided for by the company’s rules, or to demand of the company acquisition of the shares thereof where it is provided for by this Federal Law;

to receive, in the case of the company’s liquidation, that part of the property that has remained after settlements with creditors or its monetary equivalent.

The company’s participants shall also have other rights provided for by this Federal Law.

  1. In addition to the rights stipulated by this Federal Law the company’s charter may provide for order rights (additional rights) of the company’s participants. The said rights may be provided for by the company’s charter at the time of its establishment or may be granted to the company’s participants by decision of the general meeting of the company’s participants taken by all the participants unanimously.

Additional rights granted to a concrete participant the company shall not pass to the acquirer of the share or a part of the share in the event this share or a part of the share has been alienated by.

The termination or limitation of the additional rights granted to all the company’s participant shall be effected by decision of the general meeting of the company’s participants, adopted by all its participants unanimously. The termination or limitation of the additional rights granted to a concrete participant of the company shall be effected by decision of the general meeting of the company’s participants, adopted by a two-thirds majority of votes of the company’s participants, provided that the participant who has such additional rights has voted for such decision or has given his written consent to this.

The company’s participant to whom additional rights have been granted may surrender these rights by sending a written notice about this to the company. The additional rights of the company’s participant shall cease since the time of the receipt by the company of the said notice.

  1. A company’s founders ( participants) are entitled to make an agreement of exercising the rights of the company’s participants, where they undertake to exercise their rights in a certain way and/or refrain from exercising the said rights, in particular to vote in a certain way at a general meting of the company’s participants , to coordinate their voting with other participants , to sell their shares or parts of their shares at the price fixed by this agreement and/or upon the emergence of certain circumstances or to refrain from alienation of their shares or parts of their shares pending the emergence of certain factors and to make concerted actions related to the company’s management, with its establishment, activities, reorganization and liquidation of the company. Such agreement shall be made in writing by way of drawing up a single document to be signed by the parties thereto.

Article 9. The Duties of a Company’s Participants

  1. A company’s participants shall be obliged:

to pay for shares in the company’s authorised capital in the procedure, at the rate and at the time which are provided for by this Federal Law and the agreement on the company’s establishment;

not to divulge confidential information about the company’s activity.

The company’s participants shall have other duties provided for by the present Federal Law.

  1. Apart from the duties stipulated by this Federal Law, the company’s charter may provide for other duties (additional duties) of the company’s participants. These duties may be stipulated by the company’s charter at the time of its establishment or allocated to all its participants by decision of the general meeting of the company’s participants, taken by all its participants unanimously. Additional duties shall be imposed on a specific participant by decision of the general meeting of the company’s participants, taken by a two-thirds majority of votes of the company’s participants, provided that the company’s participant on whom such additional duties are placed has voted for the adoption of such decision or has given his written consent.

Additional duties allocated to a specific partner of the company shall not pass to the acquirer of the share or a part of the share in the event of the alienation of the share or a part of the share of this participant.

Additional duties may be terminated by decision of the general meeting of the company’s participants, taken by all its participants unanimously.

Article 10. The Expulsion of a Participant from the Company

The company’s participants whose shares in totality make up not less than 10 per cent of the company’s authorized capital shall have the right to demand through legal proceedings the expulsion from the company of a participant who grossly neglects his duties or by his actions (or inaction) makes the company’s activity impossible or substantially hampers it.

 

Chapter II. The Establishment of a Company

Article 11. Procedure for a Company’s Establishment

  1. A company shall be established by decision of its founders or founder. The decision on a company’s establishment shall be adopted by a meeting of the company’s founders. Where a company is established by a single person, the decision on its establishment shall be adopted solely by this person.
  2. The decision on a company’s establishment shall reflect the results of voting of the company’s founders and the decisions adopted by them in respect of the company’s establishment, endorsement of the company’s rules, election or appointment of the company’s managerial bodies, as well as forming of the inspection commission or election of the company’s inspector, if such bodies are provided for by the company’s rules or are obligatory in compliance with this Federal Law.

When establishing a company, the founder or founders thereof may approve the company’s auditor and, if the legislation provides for obligatory auditing in respect of the company, the founders or founder are obliged to adopt such decision.

Where a company is established by a single person, the decision on the company’s endorsement shall define the amount of the company’s authorised capital, procedure for and time of its payment, as well as the amount and nominal value of a founder’s share.

  1. Decisions on a company’s establishment, endorsement of its rules, endorsement of the value in monetary terms of the securities, other articles or property rights, or other rights assessed in monetary terms contributed by the company’s founders as payment for shares in the authorised capital thereof shall be unanimously adopted by the company’s founders.
  2. A company’s managerial bodies shall be elected, the inspection commission shall be formed or the company’s inspector shall be elected and the company’s auditor shall be approved by at least three forth majority of the total number of votes of the company’s founders.

If by the time when a company’s managerial bodies are elected, the inspection commission is formed or the company’s inspector is elected and the company’s auditor is approved the rate of shares of each of the company’s founders is not defined, each of the company’s founder when voting shall have one vote.

  1. The company’s founders shall make an agreement in writing on the company’s establishment defining a procedure for exercising by them the joint activities aimed at the company’s establishment, the rate of the company’s authorized capital, the rate and nominal value of the sharers of each of the company’s founders, as well as the rate, procedure for and time of making payment for such shares in the company’s authorised capital.

The agreement on a company’s establishment shall not be the company’s constituent document.

  1. The company’s founders shall be jointly liable under the obligations connected with the company’s establishment and arising prior to the state registration thereof. The company shall be only held liable under obligations of the company’s founders connected with the establishment thereof, if their actions are subsequently approved by a general meeting of the company’s participants. With this, in any case the amount of the company’s liability may not exceed one fifth of the company’s paid authorised capital.
  2. The specifics of establishing a company with participation of foreign investors shall be defined by federal law.
  3. Data on the rate and nominal value of the share of each company’s participant shall be inserted in the comprehensive state register of legal entities in compliance with the federal law on the state registration of legal entities. In so doing, data on the nominal value of shares of the company’s participants when it is being established shall be determined on the basis of the provisions of the agreement on the company’s establishment or of the decision of the company’s sole founder, in particular if these shares are not paid for in full and are to be paid for in the procedure and at the time which are provided for by this Federal Law.

Article 12. A Company’s Rules

  1. A company’s rules shall be the company’s constituent document.
  2. The company’s charter shall contain:

the full and abbreviated trade name of the company;

information about the company’s whereabouts;

information about the structure and competence of the company’s bodies, including in matters comprising the exclusive competence of the genera meeting of the company’s participants, about the procedure of the adoption of decisions by the company’s bodies, including in the matters in which decisions are taken unanimously or by a qualified majority of votes;

information about the size of the company’s authorized capital;

paragraph six was abrogated from July 1, 2009;

See the text of paragraph six of Item 2 of Article 12

the rights and duties of the company’s participants;

information about the procedure and consequences of the withdrawal of a participant from this company, if the right to withdraw from the company is provided for by the company’s rules;

information about the procedure for the transition of a share or a part of the share in the company’s authorized capital to another person;

information about the procedure for keeping the company’s documents and about the procedure of submission by the company of data to its participants and other persons;

other information provided for by this Federal Law.

The company’s charter may also contain other provisions which are not inconsistent with this Federal Law and other federal laws.

  1. At the request of a company participant, auditor or any interested person the company shall be obliged to provide them in reasonable time with the possibility of acquainting themselves with the company’s rules, including amendments to them. The company shall be obliged to give copies of the effective rules to a company participant at his request. The charge collected by the company for granting the copies may not exceed the expenses on their production.
  2. Amendments to the company’s rules shall be introduced by decision of the general meeting of the company’s participants.

Amendments introduced to the company’s constituent documents shall be subject to state registration in the order prescribed by Article 13 of this Federal Law for the company’s registration.

Amendments introduced to the company’s constituent documents shall acquire force for third persons from the time of their state registration and in cases stipulated by this Federal Law from the time of notifying the body that carried out state registration.

  1. Abrogated from July 1, 2009

See the text of Item 5 of Article 12

Article 13. State Registration of a Company

A company shall be liable to state registration with the body that carries out the state registration of legal entities in the procedure established by the Federal Law on the State Registration of Legal Entities.

 

Chapter III. A Company’s Authorized Capital. The Property
of a Company

Article 14. A Company’s Authorized Capital. Shares in a Company’s Authorized Capital

  1. A company’s authorized capital shall be formed from the nominal value of the shares of its participants.

The amount of the company’s authorized capital shall not be less than ten thousand roubles.

The amount of the company’s authorized capital and the nominal value of the shares of the company’s participants shall be expressed in roubles.

The company’s authorized capital shall determine the minimum size of its property that guarantees the interests of its creditors.

  1. The size of the share of a company’s participant in its authorized capital shall be determined as a percentage or in the form of a fraction. The size of the share of the company’s participant shall correspond to the ratio between the nominal value of his share and the company’s authorized capital.

The actual value of the share of the company’s participant shall correspond to the value of the company’s net assets that is proportional to the size of his share.

  1. The company’s charter may limit the maximum amount of the size of its participants’ shares. It may limit the possibility of a change in the correlation of the company’s participants. Such limitations may not be established for particular participants. Said provisions may be provided for by the company’s charter at the time of its establishment, and also may be included in its charter, changed and removed from the charter by decision of the general meeting of the company’s participants, adopted by all its participants unanimously.

Where the company’s rules contain the restrictions provided for by this item, the person that has acquired a share in the company’s authorised capital in defiance of the requirements of this item and of appropriate provisions of the company’s rules is entitled to vote at a general meeting of the company’s participants by the part of the share whose rate does not exceed the maximum rate of the share of the company’s participant established by the company’s rules.

Article 15. Payment for Shares in a Company’s Authorised Capital

  1. Shares in a company’s authorised capital may be paid for by monetary funds, securities, other articles or property rights and also by other rights which can be assessed in monetary terms.
  2. The monetary value of the property contributed as payment for shares in a company’s authorised capital shall be endorsed by the decision of a general meeting of the company’s participants to be unanimously adopted by all company’s participants.

If the nominal value or an increase of the nominal value of a company’s participant in the authorized capital thereof paid by non-monetary assets exceeds twenty thousand rubles, an independent appraiser shall be attracted for appraising the property’s value on the condition that other is not determined by the Federal Law. The nominal value or an increase of the nominal value of the share of a company’s participant paid b y such non-monetary assets may not exceed the assessed value of the said property defined by the independent appraiser.

In the event of payment for shares in a company’s authorized capital by non-monetary assets, the company’s participants and an independent appraiser, if the company’s property is insufficient, shall jointly bear subsidiary responsibility under its obligations in the amount of overrating of the company’s property contributed as payment for shares in the company’s authorised capital within three years as of the time of the company’s state registration or of making the amendments in the company’s rules which are provided for by Article 19 of this Federal Law.

The company’s rules may specify the kinds of property which may not be contributed as payment for shares in the company’s authorised capital.

  1. In the event of termination of the company’s right to property’s use before the expiry of the time period for which such property has been transferred to the company for using it to pay for a share, the company’s participant that has transferred the property is obliged to provide the company upon demand thereof with the monetary compensation which is equal to payment for the use of the same property under similar terms within the remaining time period of the property’s use. The monetary compensation shall be provided by way of a one-time payment within a reasonable time period as of the time when the company raises the demand for paying it, if a different procedure for providing monetary compensation is not established by decision of a general meeting of the company’s participants. This decision shall be adopted by a general meeting of the company’s participants without taking into account the votes of the company’s participant who has transferred to the company as payment for the share thereof the right to the property’s use which has terminated ahead of time.

The agreement on a company’s establishment or, if a company is established by a single person, the decision on a company’s establishment may provide for other ways and for a different procedure for making compensation by the company’s participant for preschedule termination of the right to use the property which has been transferred to the company for its using as payment for the share in the company’s authorised capital.

Should the compensation not be made in due time, the share or a part of the share in the company’s authorised capital which are proportionate to the unpaid amount (cost) of the compensation shall be transferred to the company. Such share or a part of the share shall be sold by the company in the procedure and at the time which are established by Article 24 of this Federal Law.

  1. The property transferred by a company’s participant to the company for use as payment for the shares thereof, in the event of such participant’s withdrawal or expulsion from the company, shall be used by the company within the time period for which it has been transferred, if not otherwise provided for by the agreement on the company’s establishment.

Article 16. Procedure for Payment for Shares in the Authorised Capital at the Time of Its Establishment

  1. Each founder of the company shall be obliged to pay in full for the share thereof in its authorized capital within the time period that has been fixed by an agreement on the company’s establishment or, if a company is established by a single person, by decision on the company’s establishment and may not exceed one year as of the time of the company’s state registration. With that, the share of each company’s participant shall be paid for at the price which is not lower than the nominal value thereof.

It shall be impermissible to release a company’s founder from the duty to pay for the shares thereof in the company’s authorized capital, including by way of offsetting his claims against the company.

  1. At the time of the state registration of the company its authorized capital shall be paid up by its promoters by not less than fifty per cent.
  2. Where a share in a company’s authorised capital is not fully paid for within the time period fixed in compliance with Item 1 of this article, the unpaid part of the share shall be transferred to the company. Such part of the share may be sold by the company in the procedure and at the time which are established by Article 24 of this Federal Law.

An agreement on a company’s establishment may provide for recovery of a forfeit (fine or penalty) for failure to discharge the duty of paying for shares in the company’s authorised capital.

The share of a company’s founder, if not otherwise provided for by the company’s rules, shall accord the right of vote solely within the limits of the paid part of the share possessed by him.

Article 17. The Increase of a Company’s Authorized Capital

  1. A company’s authorized capital may be increased only after it is fully paid up.
  2. The increase of the company’s authorized capital may be realized at the expenses of the company’s assets and/or at the expense of additional contributions by its participants, and/or, unless this is forbidden by the company’s charter, at the expense of the contributions of third persons to be accepted into the company.

Article 18. The Increase of a Company’s Authorized Capital at the Expense of Its Assets

  1. A company’s authorized capital shall be increased at the expense of its assets by decision of the general meeting of the company’s participants, adopted by a two-thirds majority of their votes, unless the company’s charter provides for a greater number of votes for the adoption of such decision.

A decision on the increase of the company’s authorized capital at the expense of its assets may be taken only on the basis of the data of the company’s accounting report for the year that precedes the year during which such decision has been taken.

  1. The amount of the increasing authorized capital at the expense of the company’s assets shall not exceed the difference between the value of the company’s net assets and the amount of the company’s authorized capital and reserve fund.
  2. If the company’s authorized capital is increased in accordance with the present Article, the nominal value of the shares of all the company’s participants shall be increased in proportion without change of the ratio of their shares.
  1. An application for the state registration of amendments to be made in the company’s rules in connection with an increase of the company’s authorised capital shall be signed by the person exercising the functions of the company’s sole executive body. The application shall confirm the observance by the company of the requirements of Items 1 and 2 of this article.

This application and other documents required for the state registration of amendments to be made in the company’s rules in connection with an increase of the company’s authorised capital, as well as of alteration of the nominal value of shares of the company’s participants, shall be filed with the body engaged in the state registration of legal entities within one month as of the date of adoption of the decision on an increase of the company’s authorised capital on account of the property thereof.

Such amendments shall come into effect in respect of third persons from the time of their state registration.

Article 19. The Increase of a Company’s Authorized Capital at the Expense of Additional Contributions by Its Participants and the Contributions of Third Persons to Be Admitted to the Company

  1. The general meeting of the company’s participants by a two-thirds majority of their votes may take a decision on the increase of the company’s authorized capital at the expense of additional contributions of its participants, unless the company’s charter provides for a greater number of votes for the adoption of such decision. This decision shall determine the total value of the additional contributions, and also shall establish a single (for all the company’s the participants) correlation between the value of the additional contribution of the company’s participant and the amount by which the nominal value of his share is increased. The said correlation shall be established due to the fact that the nominal value of the share of the company’s participant may increase by the amount that is equal to, or less than, the value of his additional contribution.

Each company participant shall have the right to make an additional contribution that does not exceed the part of the total value of the additional contributions that is proportional to the amount of the share of this participant in the company’s authorized capital. Additional contributions may be made by the company’s participants within two months of the adoption by the general meeting of the company’s participants of the decision indicated in the first paragraph of this item, unless the company’s charter or the decision of the general meeting of the company’s participants establishes a different period of time.

Not later than a month from the end of the time for the payment of additional contributions, the general meeting of the company’s participants shall take a decision on approval of the results of the deposition of the additional contributions by the company’s participants and on the introduction into the company’s rules of amendments associated with the increase of the company’s authorized capital. In this case the nominal value of the share of each participant, who has made an additional contribution, shall be increased in keeping with the correlation indicated in the first paragraph of this item.

Paragraph four was abrogated from July 1, 2009

See the text of paragraph four of Item 1 of Article 19

Paragraph five was abrogated from July 1, 2009

See the text of paragraph five of Item 1 of Article 19

  1. The general meeting of the company’s participants may take a decision on the increase of its authorized capital on the basis of the statement of the company’s participant or the statements of its participants on the making of an additional contribution and/or, unless the company’s charter forbids this, of the statement of a third person or the statements of third persons on his admission to the company and the deposition of his contribution. Such decision shall be taken by all the company’s participants unanimously.

The statement of the company’s participant and the statement of a third person shall indicate the size and composition of the contribution, the procedure and the time of its deposition, and also the size of the share which the company’s participant or third person would like to have in its authorized capital. The statement may also indicate other conditions for the deposition of contributions and for joining the company.

Simultaneously with the decision on an increase of the company’s authorized capital on the basis of the statement of a company participant or statements of company participants on deposition by him or them of an additional contribution it is necessary to take a decision on the introduction into the company’s constituent documents of amendments associated with the increase of the amount of the company’s authorized capital, as well as the decision on an increase of the nominal value of the share of the company’s participant or the shares of the company’s participants, which have made statements on depositing an additional contribution, and, if necessary, also the decision on changing the size of the shares of the company’s participants. Such decisions shall be unanimously adopted by all the company’s participants. In this case, the nominal value of the share of each company’s participant that has filed the statement on deposition of an additional contribution shall be increased by the amount that is equal to, or is less than, the value of the additional contribution thereof.

Simultaneously with the decision on an increase of the company’s authorized capital on the basis of the statement of a third person or statements of third persons on his or their admission to the company and the deposition of a contribution or contributions the decisions shall be taken on his or their admission to the company, on introduction into the company’s constituent documents the amendments associated with the increase of the company’s authorized capital, on estimation of the nominal value and the size of the share or shares of the third person or third persons, as well as on the change of shares of its participants. Such decisions shall be taken unanimously. The nominal value of the share acquired by each third person to be admitted to the company shall not exceed the value of the contribution thereof.

Additional contributions of a company’s participants and contributions of third persons shall be made at latest within six months as of the date when the decisions provided for by this item are adopted by a general meeting of the company’s participants.

Paragraph six was abrogated from July 1, 2009

See the text of paragraph six of Item 1 of Article 19

2.1. An application for the state registration of amendments to be made in the company’s rules which are provided for by this article shall be signed by the person exercising the functions of the company’s sole executive body. The application shall confirm making additional contributions or contributions of third persons in full. Within three years as of the time of the state registration of appropriate amendments made in the company’s rules the company’s participants, if the company’s property is insufficient, shall jointly bear subsidiary responsibility under obligations thereof in the amount of the additional contributions which are not made.

The said application and other documents required for the state registration of the amendments provided for by this article in connection with an increase of the nominal value of shares of the company’s participants which have made additional contributions, with admission of third person to the company, estimation of the nominal value and size of their shares and, where necessary, with changes in the size of shares of the company’s participants, as well as the documents which prove making by the company’s participants additional contributions or contributions by third persons in full shall be submitted to the body engaged in the state registration of legal entities within one month as of the date of adoption of the decision on endorsement of the results of making additional contributions by the company’s participants in compliance with Item 1 of this article or as of the date of making additional contributions by the company’s participants or third persons on the basis of applications thereof.

Such amendments shall come into effect with respect to third persons from the time of their state registration.

2.2. In the event of failure to observe the deadlines provided for by Paragraph Three of Item 1, Paragraph Five of Item 2 and Item 2.1 of this article, an increase of a company’s authorised capital shall be deemed abortive.

  1. If the company’s authorized capital has not been increased, the company shall be obliged to return within, the company shall be obliged to return within a reasonable period of time the contributions to its participants and the third persons who have made their contributions in cash, and in the event of the non-return of these contributions in the said period shall also be obliged to pay interest in the order and within the time-limits provided for by Article 395 of the Civil Code of the Russian Federation.

The company shall be obliged to return the contributions within a reasonable period of time to its participants and the third persons who have made contributions in non-cash form, and in the event of the non-return of these contributions shall be obliged to compensate for the lost profit within this period of time, if it is impossible to make use of the property deposited as a contribution.

Article 20. The Diminution of the Company’s Authorized Capital

According to Federal Law No. 175-FZ of October 27, 2008, if the amount of charter capital of a bank falls to the amount of owner’s equity (capital), the provisions of Article 20 of this Federal Law and Article 29 of Federal law No. 208-FZ of December 26, 1995 shall not be applicable by a decision of the Bank of Russia

  1. The company shall have the right to diminish its authorized capital and in cases provided for by this Federal Law shall be obliged to do so.

The company’s authorized capital may be diminished by reducing the nominal value of the shares of all its participants in the company’s authorized capital and/or by annuling the shares belonging to the company.

The company shall not have the right to diminish its authorized capital, if as a result of such diminution its size becomes less than the minimum size of the authorized capital determined in conformity with the present Federal Law on the date of submitting documents for the state registration of appropriate amendments to the company’s charter and in cases when the company is obliged to reduce its authorized capital in keeping with this Federal Law, on the date of the state registration of the company.

The diminution of the company’s authorized capital by reducing the nominal value of the shares of all the company’s participants shall be effected with the preservation of the sizes of the shares of all the participants of the company.

  1. Abrogated from July 1, 2009

See the text of Item 2 of Article 20

  1. If at the end of the second and each subsequent fiscal year the value of the company’s net assets proves to be less than the authorized capital, the company shall announce that is has diminished its authorized capital to an amount not exceeding the value of the net assets and have this diminution registered in the statutory order.

If at the end of the second and each subsequent fiscal year the value of the company’s net assets proves to be less than the minimum amount of the authorized capital fixed by this Federal Law on the date of the state registration of the company, the latter shall be subject to liquidation.

The value of the company’s net assets shall be estimated in the order established by federal law and the normative acts issued in conformity with it.

  1. Within 30 days of the date of adoption of a decision on the reduction of its authorized capital the company shall be obliged to notify in writing all the company’s creditors known to it about the diminution in the company’s capital and about its new size, and also to publish the information on the adopted decision in the press organ that publishes data on the state registration of legal entities. In this case the company’s creditors shall have the right to demand in writing the early termination or performance of the company’s relevant obligations and compensation for its losses within 30 days of the date of sending its notification or 30 days of the date of publishing the message about the adopted decision.

The state registration of the reduction of the company’s authorized capital shall be carried out only upon the presentation of the proof of the notification of creditors in the order established by the present item.

Documents for the state registration of the amendments to be made in the company’s rules in connection with a decrease of the company’s authorised capital and of a change of the nominal value of shares of the company’s participants shall be submitted to the body engaged in the state registration of legal entities within one month as of the date of forwarding to creditors the last notice of the decrease of the company’s authorised capital and of its new size.

Such amendments shall come into effect with respect to third persons from the time of their state registration.

  1. If in cases provided for by this Article the company does not take a decision on the reduction of its authorized capital or on its liquidation within a reasonable period of time, the creditors shall have the right to demand that the company should terminate its obligations early or perform its relevant obligations and compensate their losses ahead of schedule. The body that carries out the state registration of legal entities and any other state bodies or local self-government bodies, entitled by federal law to present such a demand, shall have the right to make demand the liquidation of the company in a court of law.

Article 21. The Transfer of the Share or of a Part of the Share of a Company’s Participant in Its Authorized Capital to Other Participants of the Company and to Third Persons

  1. A share or a part of a share in a company’s authorised capital shall be transferred to a single or several participants of this company or to third persons on the basis of a deal, by way of legal succession or on some other legal basis.
  2. A company’s participant shall have the right to sell or alienate in any other way its share in the company’s authorized capital or a part thereof to one or several participants of this company. No consent shall be required from the company or other participants of the company for making such a transaction unless otherwise stipulated by the company’s rules.

It shall be allowable to sell or to alienate in any other way a share or a part of a share in a company’s authorised capital to third persons on condition of satisfying the requirements provided for by this Federal Law, if it is not prohibited by the company’s rules.

  1. The share of a company’s participant may be alienated before its full payment solely in the part thereof which has already been paid.
  2. The company’s participants shall enjoy the preemptive right to buy the share or a part of the share of the company’s participant at the price offered to a third person or at the price other than the price offered to a third person and fixed in advance by the company’s rules (hereinafter referred to as the price fixed by the rules in advance) in proportion to the size of their shares, unless the company’s rules stipulate a different procedure for the exercise of this right.

The company’s rules may provide for the company’s preemptive right to acquire the share or a part of the share held by its participant at the price offered to a third person or at the price fixed by the rules in advance, unless the company’s other participants have used the preemptive right to buy the share or the part thereof. In so doing, the exercise by the company of the preemptive right to purchasing a share or a part of a share at the price fixed by the rules in advance shall be only allowed on condition that the price of selling by the company of the shares or of the part of the shares is not less than the one fixed for the company’s participants.

The purchasing price of a share or a part of a share in the company’s authorised capital may be established by the company’s rules as a fixed sum of money or on the basis of one of the criteria determining the share’s value (the company’s net wealth value, balance sheet value of the company’s assets as of the last reporting date, the company’s net profit and others). The purchasing price of a share or of a part of a share fixed by the rules in advance shall be equal for all the company’s participants, regardless of the pertinence of such share or a part of such share in the company’s authorised capital.

The provisions establishing the preemptive right to purchasing a share or a part of a share in a company’s authorised capital by the company’s participants or by the company at the price fixed by the rules in advance, in particular alteration of such price or of a procedure for fixing it, may be provided in the company’s rules when it is being established or when making amendments in the company’s rules on the basis of the decision of a general meeting of the company’s participants unanimously adopted by all the company’s participants. The provisions establishing the preemptive right to purchase a share or a part of a share in a company’s authorised capital at the price fixed in advance shall be deleted by the decision of a general meeting of the company’s participants adopted by two thirds of the total number of votes of the company’s participants.

The company’s rules may provide for the possibility of using by the company’s participants or by the company the preemptive right of not purchasing the whole share or the whole part of the share in the company’s authorised capital which are offered for sale. With that, the remaining share or the part of the shares may be sold to a third person after partial sale of the said right by the company or by its participants at the price and under the terms which have been reported to the company or to its participants or at the price which is not lower that the one which is fixed by the rules thereof in advance. The provisions stipulating such possibility may be provided for by the company’s rules when it is being established or when making amendments in the company’s rules on the basis of the decision of a general meeting of the company’s participants unanimously adopted by all members of the company. The said provisions shall be deleted by the decision of a general meeting of the company’s participants adopted by two thirds of the total number of votes of the company’s participants.

The company’s rules may provide for the possibility of offering a share or a part of a share in a company’s authorised capital to all the company’s participants out of proportion to the sizes of their shares. The provisions establishing a procedure for exercising by a company’s participants of the preemptive right to purchasing a share or a part of a share in the company’s authorised capital out of proportion to the sizes of shares of the company’s participants may be provided for by the company’s rules when it is being established or when making amendments in the company’s rules by the decision of a general meeting of the company’s participants adopted unanimously by all the company’s participants. The said provisions shall be deleted by the decision of a general meeting of the company’s participants adopted by two thirds of the total number of votes of the company’s participants, if the need for a greater number of votes for adoption of such decision is not provided for by the company’s rules.

The company’s rules may not provide for concurrent granting of the preemptive right to purchasing of the share or a part of the share of the company’s participant at the price offered to a third person and of the preemptive right to purchasing of the share or a part of the share of the company’s participant at the price fixed by the rules in advance. It is no allowed to establish the preemptive right to purchasing at the price fixed by the rules in advance with respect to an individual company’s participant or with respect to an individual share or a part of a share in the company’s authorised capital.

The cession of the said property rights to purchasing of a share or a part of a share in a company’s authorised capital is not allowed.

  1. The company participant who intends to sell his share or a part thereof to a third person shall be obliged to inform the other participants of the company or the company itself about this in writing by way of forwarding through the company at his own expense an offer addressed to these persons and containing an indication of the price or any other terms of its sale. The offer to sell a share or a part of a share in a company’s authorised capital shall be deemed received by all the company’s participants at the time when it is received by the company. With that, it may be accepted by the person which is the company’s participant at the time of acceptance, as well as by the company where it is provided for by this Federal Law. An offer shall be deemed not received if within at most one day as of the date of receiving it by the company the company’s participant receives a notification of its withdrawal. The withdrawal of the offer to sell a share or a part of a share after it is received by a company is only allowed with the consent of all the company’s participants, if not otherwise provided for by the company’s rules.

The company’s participants are entitled to exercise the preemptive right to purchase a share or a part of a share in the company’s authorised capital within thirty days as of the date when the offer is received by the company. The company’s rules may provide for a longer term of the exercise of the preemptive right to purchase a share or a part of a share in the company’s authorised capital.

Where the company’s rules provide for the preemptive right of the company to purchase a share or a part of a share, they shall fix the time period for exercising the preemptive right to purchase a share or a part of a share by the company’s participants and by the company.

In the event of the refusal of individual company’s participants to exercise the preemptive right to purchasing of a share or of a part of a share in the company’s authorised capital or in the event of their exercising the preemptive right not to purchase the whole share offered for sale or not to purchase the whole part of the share offered for sale, the other company’s participants may exercise it preemptive right to purchasing of a share or of a part of a share in the company’s authorised capital in the appropriate part proportionate to the size of their shares within the limits of the remaining part of the time period fixed for exercising by them of the preemptive right to purchasing of the share or of the part of the share, if not otherwise provided for by the company’s rules.

  1. The preemptive right to purchase the share or a part of the share of a participant in a company’s authorised capital and, where it is provided for by the company’s rules, the company’s preemptive right to purchasing of a share or of a part of a share shall be terminated on the date:

of submitting an application in writing about the refusal to exercise this preemptive right in the procedure provided for by this item;

of expiry of the time period fixed for the exercise of the sad preemptive right.

Applications of the company’s participants as to their refusal to exercise the preemptive right to purchasing of a share or of a part of a share shall be filed with the company before the expiry of the time period for the exercise of the said right fixed in compliance with Item 5 of this article. The company’s application about the refusal to exercise the right to purchasing of a share or of a part of a share in the company’s authorized capital provided for by the rules shall be presented at the time fixed by the rules to the company’s participant that has forwarded an offer to sell the share or the part of the share by the company’s sole executive, if the company’s rules do not refer the solution of this issue to the scope of authority of another company’s body.

The genuineness of the signature on the application of a company’s participant or a company as to refusal from the preemptive right to purchase a share or a part of a share in a company’s authorized capital shall be notarially certified.

  1. If within thirty days of the date when an offer is received by a company, provided that a longer term is not fixed by the company’s rules, the company’s participants or the company do not use the preemptive right to purchasing of the share or of the part of the share in the company’s authorised capital which are offered for sale, in particular those which are formed as a result of exercising the preemptive right of not buying the whole share or the whole part of a share or of the waiver of individual company’s participants and of the company of the preemptive right to purchase a share or a part of a share in the company’s authorised capital, the remaining share or part of the share may be sold to a third person at the price which is not lower than the one fixed in the offer for the company and its participants and under the terms which are reported to the company and its participants or at the price which not lower that the one which is fixed by the rules in advance. Where the purchasing price of a share or of a part of a share fixed in advance by the company differs from the purchasing price of the share or of the part of the share fixed in advance by the company’s participants, the share or the part of the share may be sold to a third person at the price which is not lower that the price of the share or of the part of the share which is fixed in advance by the company.
  2. The shares in a company’s authorized capital shall pass to heirs of the individuals and to legal successors of the legal entities that have been company participants, of not otherwise provided for by the rules of the limited liability company.

The company’s rules may provide that the transfer of a share in a company’s authorised capital to heirs and legal successors of the legal entities which are the company’s participants, the transfer of the share held by a liquidated legal entity to the founders (participants) thereof that have real right to its property or contractual rights in respect of this legal entity shall be only allowed with the consent of all the company’s participants. The company’s rules may provide for a different procedure for obtaining the consent of the company’s participants to the transfer of a share or of a part of a share in the company’s authorized capital to third persons, depending on the reasons for such transfer.

Before the acceptance of succession by the heir of a deceased company’s participant the share thereof in the company’s authorised capital shall be managed in the procedure provided for by the Civil Code of the Russian Federation.

  1. When selling a share or a part of a share in a company’s authorized capital through an auction, the rights and duties of the company’s participant relating to such share or the part of the share shall be transferred, if the company’s participants give their consent to it.
  2. If this Federal Law and/or the company’s rules provide for the need to obtain the consent of its participants for the transfer of a share or a part thereof in the company’s authorized capital to a third person, such consent shall be deemed received, if within 30 days from the time of receiving by the company of the appropriate application or offer all the company’s participants file with the company their statements in writing that they give their consent to alienation of the share or of the part of the share on the basis of a deal or to the transfer of the share or of the part of the share to a third person for some other reason, or if within the said time period applications in writing as to the refusal to give consent to alienation or transfer of the share or of the part of the share are not presented.

If a company’s rules provide for the need to obtain the company’s consent to the alienation of a share or a part thereof in its authorized capital to the company’s participants or to third persons, such consent shall be deemed to be received by the company’s participant alienating the share or the part of the share, if within 30 days from the time of applying to the company or within another period of time specified by the company’s rules they received a written consent of the company or have not received from it a written refusal to express its consent to alienation of the share or of the part of the share.

  1. A transaction aimed for alienation of a share or a part of a share in a company’s authorized capital shall be attested and certified by a notary. If the notarial form of the said transaction is not observed, the deal shall be deemed invalid. Notarial certification of the transaction shall not be required, if a share is transferred to a company in the procedure provided for by Articles 23 and 26 of the Federal Law, if the share is distributed between all company’s participants and when the share is distributed to all the participants thereto and sold to all or some participants or third persons in compliance with Article 24 of the Federal Law , and also while using the preemptive right to purchase by way of sending an offer for sale of a share or a part of a share and further acceptance of the offer in compliance with Items 5-7 of the Article.

If a company’s participant having concluded an agreement establishing the obligation in case of emergence of certain circumstances or fulfillment by other party of a counter obligation to make a transaction aimed to alienation of a share or a part of a share of the authorized capital of the company, the buyer of a share or a part of a share in the authorized capital of the company doer of the acts related to fulfillment of the named agreement shall be entitled to require in an action at law the transfer of a share or a part of a share in the authorized capital of the company. In this case a decision by the Arbitration Court on transfer of a share or a part of a share of the authorized capital of a company shall be the ground for state registration of the relevant changes being made in the Uniform State Register of Legal Entities.

  1. A share or a part of a share in a company’s authorised capital shall be transferred to the acquirer thereof from the time of certification by a notary of the deal aimed at alienation of the share or of the part of the share in the company’s authorised capital or, if certification by a notary is not required, from the time of making appropriate amendments in the comprehensive state register of legal entities on the basis of right-proclaiming documents.

The acquirer of a share or of a part of a share in a company’s authorized capital shall obtain all the rights and duties of the company’s participant arising prior to making the deal aimed at alienation of the said share or the part of the share in the company’s authorised capital or before the emergence of any other ground for its transfer, except for the rights and duties provided for accordingly by Paragraph Two of Item 2 of Article 8 and Paragraph Two of Item 2 of Article 9 of this Federal Law. The company’s participant alienating a share or a part of a share in the company’s authorised capital shall incur, jointly with the acquirer thereof, the obligation to make a contribution to the property arising before making the deal aimed at alienation of the said share or of the part of the share in the authorized capital.

After certification by a notary of the deal aimed at alienation of a share or of a part of a share in a company’s authorized capital or, if certification by a notary is not required, from the time of making appropriate amendments in the comprehensive state register of legal entities the transfer of the share or of the part of the share may be only disputed judicially by way of making a claim with an arbitration court.

  1. The notary certifying the deal aimed at alienation of a share or of a part of a share in a company’s authorized capital shall verify the authority of the person alienating them as to the disposal of such share or such part of the share.

The authority of the person alienating a share or a part of a share in a company’s authorised capital to dispose of them shall be probed by the contract certified by a notary on the basis of which such share or such part of the share have been previously acquired by an appropriate person, as well as by the extract from the comprehensive state register of legal entities containing data on the possession of the share or of the part of the share by this person and on the rate thereof. If the person alienating a share or a part of a share in a company’s authorized capital presents a duplicate of the contract certified by a notary to prove the authority thereof to dispose of such share or such part of the share, the said extract shall be drawn up at earliest ten days before the date of applying to the notary for certification of the deal. If a share or a part of a share has been obtained by way of legal succession or in other cases when certification by a notary is not required or has not been required before, the authority of the person alienating such share or part of the share in a company’s authorised capital to dispose of them shall be proved by the document concerning the transfer of the shares or of the part of the share by way of legal succession or by the document showing the content of the deal made in written form or, when a company is established by a single person, by the decision of the sole founder (participant) on the company’s establishment, as well as by an extract from the comprehensive state register of legal entities drawn up at earliest thirty days before the date of applying to a notary for notarial certification of the deal. Where a share or a part of a share in a company’s authorised capital is alienated by a founder of a company established by several persons, the authority thereof shall be proved by a copy of the agreement on the company’s establishment authorised by a notary, as well as by an extract from the comprehensive state register of legal entities drawn up at earliest thirty days before applying to a notary for the deal’s certification.

The notary certifying the deal of alienation of a share or of a part of a share in a company’s authorised capital shall make a note which proves making the deal in the agreement certified by a notary, on the basis of which the share or the part of the share to be alienated have been previously acquired.

  1. After certification by a notary of the deal of alienation of a share or of a part of a share in the company’s authorized capital the notary who has certified it at the latest in three days as of the date of such certification shall make the notarial action of filing with the body engaged in the state registration of legal entities an application for making appropriate amendments in the Uniform State Register of Legal Entities duly signed by the company’s participant alienating a share or a part of the share.

If under the terms of the deal of alienation of a share or of a part of a share in a company’s authorised capital such share or such part of the share are transferred to the acquirer with their simultaneous putting in pledge or creation of other charges, the appropriate charges shall be cited in the application for making appropriate amendments in the comprehensive state register of legal entities to be signed by the person alienating the share or the part of the share.

The application may be sent by advice-of-receipt post, submitted directly to the body engaged in the state registration of legal entities or sent by facsimile communication , computer network and other technical means , if the procedure of such delivery of the application is determined by the relevant Federal Executive Body authorized by the Government of the Russian Federation.

The method of delivering the said application may be determined by agreement of the parties to the deal aimed at alienation of a share in a company’s authorised capital and drawn up in writing subject to the requirements of this article.

  1. At the latest within three working days from certification by a notary of the transaction aimed at alienation of a share or a part of a share in a company’s authorized capital the notary, who has certified it, shall make the notarial action of delivery to the company entitled to the authorized capital’s share or a part thereto being alienated a copy of the application as provided for by Item 14 of the Article.

By agreement of the persons making the deal aimed at alienation of a share or a part of a share in the authorized capital of a company, the company whose authorised capital’s share or a part of the share is being alienated may be notified of it by one of the said persons making the deal. In such case, the notary shall not be held liable for failure to notify the company of the deal made.

  1. Within three days as of the time of receiving the consent of a company’s participants provided for by Items 8 and 9 of this article the company and the body engaged in the state registration of legal entities shall be notified of the transfer of a share or a part of a share in the company’s authorized capital by way of forwarding an application for making appropriate amendments in the comprehensive state register of legal entities to be signed by the legal successor of the reorganized legal entity which is the company’s participant or by the participant of the liquidated legal entity which is the company’s participant, or by the owner of the property of the liquidated institution, state or municipal unitary enterprise which is the company’s participant, or by the heir, or before the acceptance of inheritance by the testamentary executor, or by a notary, attaching thereto the documents proving the ground for the transfer of the rights and duties by way of legal succession or for the transfer of the share or of the part of the share in the company’s authorized capital which have been possessed by the liquidated legal entity to the founders (participants) that have real rights to the property or contractual rights in respect of this legal entity.
  2. If a share or a part of a share in a company’s authorized capital is received on a gratuitous basis from a person that has no right to alienate it and the acquirer did not know and could not know about it (innocent purchaser). the person that has lost the share or the part of the share is entitled to demand recognition of the right thereof to this share or the part of the share in the company’s authorised capital accompanied by simultaneous deprivation of the right to the said share or part of the share of the innocent acquirer , provided that this share or the part of the share have been lost as a result of unlawful actions of third persons or in some other way against the will of the person that has lost the share or the part of the share.

In the event of refusal to allow the claim of the person that has lost a share or a part of a share in a company’s authorized capital which has been made against an innocent acquirer, the share or the part of the share is recognized as possessed by the innocent acquirer from the time of certification by a notary of the appropriate deal which has served as a basis for acquisition of such share or the part of the share. Where a share or a part of a share is acquired by an innocent acquirer through an action, it shall be deemed possessed by the innocent acquirer from the time of making an appropriate entry in the comprehensive state register of legal entities.

The claim for recognizing the right of the person that has lost a share or a part of a share to this share or the part of the share and for concurrent deprivation of the innocent acquirer of the right to this share or part of the share which is provided for by this item may be raised within three years from the date when the person that has lost the share or the part of the share leant or had to learn of his rights’ violation.

  1. When selling a share or a part of a share in a company’s authorised capital in defiance of the preemptive right to purchasing of the share or of the part of the share, any company’s participant, or participants, or, if the company’s rules provide for the preemptive right to purchasing of this share or the part of the share by the company, the company within three months from the date when the participant, or participants, or the company learnt or had to learn about such violation, are entitled to demand judicially the transfer of the purchaser’s rights and duties to them. The arbitration court trying the case involving the said claim shall provide for other company’s participants and, if the company’s rules provide for the preemptive right of purchasing by the company of the share or the part of the share, for the company an opportunity to join the claim that has been previously made, and to this end in the ruling on preparing the case for the court hearing shall be fixed the time period within which other company’s participants and the company itself, which satisfy the requirements of this Federal Law, may join the claim raised. The said time period may not be less than two months.

Where a company’s rules provide for the preemptive right to purchasing a share or a part of a share in the company’s authorised capital at the price which is fixed by the rules in advance, the person to which the purchaser’s rights and duties are transferred shall compensate for the outlays incurred by the purchaser in connection with payment for the share or the part of the share in the company’s authorized capital in the amount not exceeding the purchasing price of the share or of the part of the share fixed by the rules in advance. The court decision on transfer of a share or of a part of a share to a company’s participant or to a company shall serve as a ground for the state registration of the appropriate amendments to be made in the comprehensive state register of legal entities.

In the event of alienation or transfer of a share or of a part of a share in a company’s authorised capital to third persons for other reasons in defiance of the procedure for obtainment of the consent of the company’s participants or of the company provided for by this article, as well as in the event of failure to observe the ban on the sale or alienation in some other way of the share or of the part of the share, the company’s participant or participants or the company are entitled to demand judicially the transfer of the share or of the part of the share to the company within three months from the date when they learnt or had to learn about such violation, With that, in the event of transfer of a share or of a part of a share to the company, the expenses incurred by the acquirer of the share or of the part of the share in connection with its acquisition shall be reimbursed by the person that has alienated the share or the part of the share in defiance of the said procedure.

The court decision on the transfer of a share or of a part of a share to a company shall serve as a ground for the state registration of an appropriate amendment. Such share or such part thereof in a company’s authorized capital shall be sold by the company in the procedure and at the time which are fixed by Article 24 of this Federal Law.

Article 22. The Pledge of Shares in a Company’s Authorized Capital

  1. A company’s participant shall have the right to put in pledge the share or the part of the share that belongs to him in the company’s authorized capital to another participant of the company or, if it is not prohibited by the company’s rules, to a third person with consent of a general meeting of the company’s participants. The decision of a general meeting of the company’s participants to give consent to putting in pledge the share or the part of the share in the company’s authorised capital held by the company’s participant shall be taken by a majority vote of all its participants, unless the company’s charter stipulates a greater number of votes for the adoption of such decision. The vote of the company participant who intends to put his share or a part thereof in pledge shall not be counted during determination of the voting results.
  2. The contract of putting in pledge a share or a part of a share in a company’s authorised capital shall be attested and certified by a notary. A failure to observe the notarial form of the said deal shall entail its invalidity.
  3. At the latest within three working days as of the time when the contract of pledge of a share or a part of a share in a company’s authorized capital is certified by a notary the notary, who has certified the transaction shall make the notarial act of transferring to the body engaged in the state registration of legal entities an application for the relevant amendments to be introduced into the Uniform State Register of Legal Entities duly signed by the company’s participant – pledger citing therein the kind of the charge (pledge) , the share or a part of the share and the period of time when the charge is in effect or the procedure for time frame determination thereto. The said application shall be submitted by a notary directly to the body engaged in the state registration of legal entities or shall be sent by the advice-receipt post. The application may also be sent by way of facsimile communication, computer networks or other technical means of communication, if the procedure for such transfer is determined by the Federal Executive Body authorized by the Government of the Russian Federation. Within three days after receipt of the said application the body engaged in the state registration of legal entities shall make an entry to the Uniform State Register of Legal Entities on the charge over the relevant share or a part of the share in the authorized capital of the company citing the period when the charge is in effect or the procedure to fix it. An entry in the Uniform State Register of Legal Entities related to the charge over the share or a part of the share of the authorized capital of the company shall be discharged on base of a mutual statement of pledger and pledge holder or on base of the court decision in force.

At the latest in three days as of the moment of certification by a notary of the contract of pledge of a share or a part of a share the notary, who has performed the notarial certification of the transaction, shall make the notarial act of transfer to the company entitled to the authorized capital share or a part of the share pledged the copies of the named application.

Article 23. The Acquisition by a Company of a Share or a Part of a Share in Its Authorized Capital

  1. The company shall have no right to acquire shares or parts of shares in its authorized capital, except for in the cases provided for by this Federal Law.
  2. If the company’s rules forbid alienation of a share or a part thereof held by a company participant to third persons, whereas other participants of the company refuse to acquire it, and also if there is no consent to alienation of a share or a part thereof to a company participant or a third person and the need to get such consent is stipulated by the company’s rules, the company shall be obliged to acquire the share or the part thereof that belongs to the company’s participant at his demand.

If a general meeting of a company’s participants adopts the decision on making a major transaction or on an increase of the company’s authorised capital in compliance with Item 1 of Article 19 of this Federal Law, the company shall be obliged to acquire on demand of the company’s participant that has voted against such decision or that has not taken part in the voting the share in the company’s authorised capital possessed by this participant. This demand may be made by the company’s participant within forty five days as of the date when the company’s participant learnt or had to learn about adoption of the decision. If the company’s participant has attended the general meeting of the company’s participants which has adopted such decision, such demand may be made within forty five days as of the date when it is adopted

Where it is provided for by Paragraphs One and Two of this item, within three months as of the date when the appropriate obligation arises, if other time period is not provided for by the company’s rules, it is obliged to pay to the company’s participant the actual cost of the share thereof in the company’s authorized capital determined on the basis of accounting reports/statements for the last accounting period preceding the date when the company’s participant makes the appropriate demand or to give out to the company’s participant with the consent thereof the property in kind of the same value. The provisions fixing any other term for discharge of the said obligation may be provided for in a company’s rules when it is being established or when making amendments in the company’s rules by decision of a general meeting of the company’s participants unanimously adopted by all the company’s participants. The said provisions shall be deleted from the company’s rules by the decision of a general meeting of the company’s participants adopted by two thirds of the total number of votes of the company’s participants.

  1. Abrogated from July 1, 2009

See the text of Item 3 of Article 23

  1. The share of a participant who has been expelled from the company shall pass to the company. In this case the company shall be obliged to pay to the expelled participant the actual value of his share to be determined according to the data of the company’s accounts over the last reporting period that precedes the date of the entry into legal force of the court decision on the expulsion, or to issue to the expelled participant with his consent assets in kind of the same value.
  2. Where the consent of a company’s participants to transfer of a share or of a part of a share provided for by Items 8 and 9 of Article 21 of this Federal Law is not obtained, the share or the part of the share shall be transferred to the company on the day following the date of expiry of the time period fixed by this Federal Law or by the company’s rules for obtainment of such consent of the company’s participants.

With that, the company is obliged to pay to heirs of a deceased company’s participant, legal successors of a re-organised legal entity which is the company’s participant or to participants of a liquidated legal entity which is the company’s participant, to the property owner of a liquidated institution, state or municipal unitary enterprise which is the company’s participant or to the person that has acquired a share or a part of a share in the company’s authorised capital through an auction the actual value of the share or of the part of the share determined on the basis of data of the company’s accounting reports/statements for the last accounting period preceding the date of death of the company’s participant, the end date of reorganization or liquidation of the legal entity, the date of acquisition of the share or of the part of the share through an auction, or to give them out property in kind of the same value, should they give their consent to it.

  1. If in accordance with Article 25 of this Federal Law the company has paid the actual value of the share or a part of the share of the company’s participant at the demand of his creditors, the part of the share whose actual value has not been paid by other participants of the company shall pass to the company, while the rest of the share shall be distributed among the company’s participants in proportion to the charge paid by them.

6.1. In the event of withdrawal of a company’s participant from the company in compliance with Article 26 of this Federal Law the share thereof shall be transferred to the company. The company is obliged to pay to the company’s participant that has filed an application for withdrawal from the company, the actual value of the share thereof in the company’s authorised capital determined on the basis of the company’s accounting reports for the last accounting period preceding the date of filing the application for withdrawal from the company, or with the consent of this company’s participant to give out thereto property in kind of the same value or, if he has not paid for the share in the company’s authorised capital in full, the actual value of the part of the share that has been paid for.

The company is obliged to pay to the company’s participant the real value of the share or of the part of the share thereof in the company’s authorized capital or to give him out property in kind of the same value within three months as of the date when the appropriate obligation arises, if other term or procedure for paying the actual value of the share or of the part of the share is not provided for by the company’s rules. The provisions establishing other time or procedure for paying the actual value of a share or of a part of a share may be provided for by the company’s rules when it is being established or when making amendments in the company’s rules by the decision of a general meeting of the company’s participants unanimously adopted by all the company’s members. The said provisions shall be deleted from the company’s rules by the decision of a general meeting of the company’s participants adopted by two thirds of the total number of votes of the company’s participants.

  1. A share or a part of a share shall pass over to a company from the date:

1) of receiving by the company the demand of a company’s participant for its acquisition;

2) of receiving by the company the application of a company’s participant for withdrawal from the company, if the right of a participant to withdraw from the company is provided for by the company’s rules;

3) of expiry of the time period fixed for paying for the share in the authorised capital or for providing the compensation stipulated by Item 3 of Article 15 of this Federal Law;

4) entry into legal force of the court decision on exclusion of a company’s participant from the company or the court decision on transfer of a share or a part of a share to the company in accordance with Item 18 of Article 18 of the Federal Law;

5) of receiving from any company’s participant the refusal to give consent thereof to transfer of the share or of the part of the share in the company’s authorized capital to heirs of the individuals or to legal successors of the legal entities which have been the company’s participants or to transfer of such share or the part of the share to founders (participants) of a liquidated legal entity which was the company’s participant, to the property owner of a liquidated institution, state or municipal unitary enterprise which is the company’s participant or to the person that has acquired the share or part of the share in the company’s authorised capital through an auction;

6) of payment by the company of the actual value of the share or the part of the share possessed by a company’s participant on demand of creditors thereof.

7.1. Documents for the state registration of appropriate amendments shall be submitted to the body engaged in the state registration of legal entities within one month as of the date when a share or a part of a share is passed over to a company.

  1. A company shall be obliged to pay the actual value of a share or a part thereof in the company’s authorised capital or to give assets in kind of the same value within one year of the time of passing over to the company the share or the part thereof, unless a lesser time has been provided for by this Federal Law or by the company’s rules.

The actual value of a share or a part thereof shall be paid from the difference between the value of the company’s net assets and the size of its authorized capital. If such difference is insufficient, the company is obliged to reduce its authorized capital by the deficient amount.

If a decrease of a company’s authorized capital can cause the situation when its size becomes less that the minimum size of the company’s authorised capital fixed in compliance with this Federal Law on the date of the company’s state registration, the actual value of a share or of a part of a share in the company’s authorised capital shall be paid from the difference between the company’s net wealth value and the said minimum size of the company’s authorised capital. On such occasion, the actual value of a share or of a part of a share in a company’s authorised capital may be paid at earliest in three months as of the date when the ground for such payment arises. If within the said time period the company becomes obliged to pay the actual value of another share or part of a share or other shares or parts of shares possessed by several company’s participants, the actual value of such shares or parts of shares shall be paid from the difference between the company’s net wealth value and the said minimum size of the authorised capital thereof in proportion to the amounts of the shares or parts of the share possessed by the company’s participants.

A company is not entitled to pay the actual value of a share or of a part of a share in the company’s authorised capital or to give out property of the same value in kind, if at the time of such payment or giving out property in kind it has the signs of insolvency (bankruptcy) in compliance with the federal law on insolvency (bankruptcy) or such signs may appear as a result of these payments or giving out property in kind.

As provided for by Items 2 and 6.1 of this Article , if in accordance with the requirements of the Federal Law a company is not entitled to pay the actual value of the share in the authorized capital or to give out property of the same value in-kind. A company shall on base of a written application filed at the latest within three months as of the date of expiry of the period of time fixed for payment of the actual value of the share by the person, whose share is transferred to the company reestablish his status as a company’s participant and transfer to him the relevant share in the authorized capital of the company.

Article 24. The Shares Belonging to the Company

  1. The shares which belong to a company shall not be counted during the determination of the voting results at the company’s general meeting of its participants, and also during the distribution of profit and assets of the company in the case of its liquidation.
  2. Within one year as of the date when a share or a part of a share in a company’s authorized capital pass to a company, they shall be distributed by decision of a general meeting of the company’s participants to all the company’s members in proportion to their shares in the company’s authorised capital or offered for acquisition to all or some company’s participants and/or to third persons, if it is not prohibited by the company’s rules.
  3. The distribution of a share or of a part of a share to a company’s participants shall be only allowed, if prior to passing of the share or of the part of the share to the company they have been paid for or the compensation provided for by Item 3 of Article 15 of this Federal Law have been provided for them.
  4. An unpaid share or a part of a share in a company’s authorised capital, as well as the share or the part of the share possessed by the company’s participant who has not provided monetary or other compensation in the procedure and at the time which are provided for by Item 3 of Article 15 of this Federal Law shall be sold at the price which not lower than the nominal value of the share or of the part of the share. Shares or parts of shares acquired by a company in compliance with this Federal Law, in particular shares of the participants which have withdrawn from the company, shall be sold at the price which not less that the one which was paid by the company in connection with transfer thereto of the share or of the part of the share, if other price is not fixed by decision of a general meeting of the company’s participants.

The sale of a share or of a part of a share to a company’s participants which has caused changes in the rates of shares of its participants, as well as the sale of a share or of a part of a share to third persons and fixing of a different price of the share to be sold shall be effected by the decision of a general meeting of the company’s participants unanimously adopted by all the company’s members.

  1. The share or the part of the share in a company’s authorised capital which are distributed or sold at the time fixed by this article shall be redeemed and the amount of the authorised capital shall be reduced by the amount of the nominal value of this share or the part of the share.
  2. The body engaged in the state registration of legal entities shall be notified of the transfer to a company of a share or of a part of a share in the company’s authorised capital at latest in one month as of the date of transfer to the company of the share or of the part of the share by way of forwarding an application for making appropriate amendments in the comprehensive state register of legal entities and the document proving the grounds for transfer to the company of the share or of the part of the share. If within the said time period the share or the part of the share are distributed, sold or redeemed, the body engaged in the state registration of legal entities shall be notified of it by the company by way of forwarding an application for making appropriate amendments in the comprehensive state register of legal entities and the documents proving the grounds for transfer to the company of the share or the part of the share , as well as for their subsequent distribution, sale or redemption. The documents for the state registration of the amendments provided for by this article and, in case of selling a share or a part of a share, also the documents proving payment for a share or a part of a share in the authorised capital, shall be submitted to the body engaged in the state registration of legal entities within one month as of the date of adoption of the decision on distribution of the share or of the part of the share to all the company’s members, on payment for them by the acquirer thereof or on their redemption.

The said amendments shall come into effect in respect of this persons from the time when they are registered.

Article 25. The Levy of Execution against a Share or a Part of a Share of a Company’s Participant in the Company’s Authorized Capital

  1. The levy of execution against a share or a part of a share of a company’s participant in its authorized capital for the debts of the company’s participant on the demand of creditors shall be allowed only on the basis of a court decision in the case of the insufficiency of the participant’s other property to cover the debts.
  2. In the event of the levy of execution against a share or a part of a share of a company’s participant in its authorized capital for the debts of the company’s participant, the company shall have the right to pay the creditors concerned the actual value of a share or a part of a share of the company’s participant.

By decision of the general meeting of the company’s participants, adopted by all the participants of the company unanimously, the actual value of a share or a part of a share of the company’s participant against whose property execution is levied may be paid to the creditors by the rest of the company’s participants in proportion to their shares in the company’s authorized capital, unless a different procedure for the determination of the charge is provided for by the company’s charter or by decision of the general meeting of the company’s participants.

The actual value of a share or a part of a share of the company’s participant in its authorized capital shall be determined on the basis of the company’s accounts over the last reporting period that precedes the date of the presentation of claim to the company for the levy of execution against a share or a part of a share of the company’s participant for his debts.

The provisions of this item shall not extend to companies with a single participant.

  1. If within three months from the time of the presentation of a claim by creditors, the company or its participants fail to pay the actual value of the shares or of the entire part of the shares of the company’s participant against which execution is levied, the levy of execution against the shares or a part of the shares of the company’s partner shall be effected by means of its sale at public auction.

Article 26. The Withdrawal of a Company Participant from the Company

  1. A company’s participant shall have the right to withdraw from this company at any time, regardless of the consent of the other participants or of the company itself, if it is provided for by the company’s rules.

The right of a company’s participant to withdraw from the company may be provided for by the company’s rules when it is being established or when making amendments in the rules thereof by the decision of a general meeting of the company’s participants unanimously adopted by all the company’s members, if not otherwise provided for by federal law.

  1. The withdrawal of participants from a company as a result of which there will be no participants therein, as well as the withdrawal of a single company’s participant from it, shall not be allowed.
  2. Abrogated from July 1, 2009

See the text of Item 3 of Article 26

  1. The withdrawal of the company’s participant form this company shall not release him from his duty to the company of depositing his contribution to the company’s assets, which had arisen before he filed his application for the withdrawal from the company.

Article 27. Contributions to a Company’s Assets

  1. A company’s participants shall be obliged to deposit their contributions to the company’s assets by decision of the general meeting of the company’s partners, if this is stipulated by the company’s charter. Such duty of the company’s participant may be provided for by the company’s charter at the time of the establishment of the company or by introducing amendments into the company’s charter by decision of the general meeting of the company’s participants, adopted by all its participants unanimously.

A decision by the general meeting of the company’s participants on the deposition of contributions to the company’s property may be adopted by a two-thirds majority of the votes of the participants, unless the company’s charter stipulates a greater number of votes for the adoption of such a decision.

  1. Contributions to the company’s assets shall be made by all the company’s participants in proportion to their shares in the company’s authorized capital, unless the company’s charter stipulates a different procedure for the determination of the size of contributions to the company’s assets.

The company’s charter may provide for a maximum value of contributions to the company’s assets made by all or some participants of the company, and also other limitations on the deposition of contributions to the company’s assets may be provided for. The limitations on the deposition of contributions to the company’s assets, established for a definite partner of the company, shall be invalid in the event of the alienation of his shares or a part of his shares in respect of the acquirer of the state or a part thereof.

Provisions establishing the procedure for determining the size of contributions to the company’s assets disproportionate to the amounts of the s of the company’s participants, and also provision stipulating limitations on the deposition of contributions, may be provided for by the company’s charter at the time of its establishment or by decision of the general meeting of the company’s participants, adopted by all its participants unanimously.

Changes in and the removal of, provisions of the company’s charter, which establish the procedure for determining the amounts of contributions to the company’s assets disproportionate to the size of the shares of the company’s participants, and also limitations on the deposition of contributions to the company’s assets, established for all the company’s participants, shall be realized by decision of the general meeting of the company’s participants, adopted by all its participants unanimously. Changes in, and the removal of, provisions of the company’s charter, which establish the said limitations for a definite participant, shall be realized by decision of the general meeting of the company’s participants, adopted by a two-thirds majority of their votes, provided that the company participant, for whom such limitations were established, has voted for this decision or has given his written consent.

  1. Contributions to the company’s assets shall be made in cash, unless otherwise stipulated by the company’s charter or the decision of the general meeting of its participants.
  2. Contributions to the company’s assets shall not alter the size and nominal value of shares of the company’s participants in the company’s authorized capital.

Article 28. The Distribution of a Company’s Profit Among Its Participants

  1. Every quarter, once every six months or twelve months the company shall have the right to take a decision on the distribution of its net profit among the company’s participants. The decision on fixing the part of the company’s profit to be distributed among the company’s participants shall be taken by the general meeting of its participants.
  2. The part of the company’s profit intended for the distribution among its participants shall be distributed in proportion to their shares in the company’s authorized capital.

A different procedure for the distribution of profit among the company’s participants may be established by the company’s charter or by the introduction of amendments into its charter on the basis of the decision of the general meeting of the company’s participants, adopted by all its participants unanimously. Changes in, and the removal of, provisions of the company’s charter, which establish such procedure, shall be realized by decision of the general meeting of the company’s participants, taken by all its participants unanimously.

Article 29. Limitations on the Distribution of a Company’s Profit Among Its Participants. Limitations on the Payment of the Company’s Profit to Its Participants

  1. A company shall have no right to take a decision on the distribution of its profit among its participants:

until the full payment of the company’s entire authorized capital;

until the payment of the actual value of the shares or a part of the shares of the company’s participant in cases stipulated by this Federal Law;

if at the time of adoption of such decision the company is showing signs of insolvency (bankruptcy) in accordance with the Federal Law on Insolvency (Bankruptcy) or if such signs appear as a result of the adoption of such decision;

if at the time of adoption of such decision the value of the company’s net assets is less than its authorized capital and the reserve fund or would be less than this amount as a result of the adoption of such decision;

in other cases provided for by federal laws.

  1. The company shall have no right to pay the company’s participants the profit, the decision on the distribution of which among its partners has been taken:

if at the time of the payment the company shows signs of insolvency (bankruptcy) in keeping with Federal Law on Insolvency (Bankruptcy) or if the said signs appear in the company as a result of payment;

if at the time of payment the value of the company’s net assets is less than its authorized capital and reserve fund or becomes less than their size as a result of payment;

in other cases stipulated by federal laws.

Upon the disappearance of the circumstances indicated in this item the company shall be obliged to pay the company’s participants the profit, the decision on the distribution of which among its participants has been taken.

Article 30. The Reserve Fund and Other Funds of a Company

A company may set up a reserve fund and other funds in the order and in the amounts stipulated by the company’s charter.

Article 31. The Placement of Bonds by a Company

  1. A company shall have the right to place bonds and other serial securities in the order prescribed by the legislation on securities.

Federal Law No. 138-FZ of July 27, 2006 reworded Item 2 of Article 31 of this Federal Law

See the Item in the previous wording

  1. Issuance of bonds by a company shall be allowable after paying in full for the authorized capital thereof.

A bond must have the nominal value thereof. The nominal value of all bonds issued by a company must not exceed the amount of the company’s authorized capital and (or) the amount of the security provided for this purpose to the company by third persons. In the absence of the security provided by third persons, bonds’ issuance shall be allowed at earliest on the third year of the joint-stock company’s existence and on condition of proper endorsement of the company’s annual balance sheets for the last two complete financial years. The said restrictions shall not apply to issues of mortgage-covered bonds and in other cases established by the laws on securities.

  1. Abolished.

See text of Item 3 of Article 31

 

Chapter III.1. Keeping a List of a Company’s Participants

Article 31.1. Keeping a List of a Company’s Participants

  1. A company shall keep a list of the company’s participants citing data on each company’s participant, the amount of the share thereof in the company’s authorized capital and its payment, as well as on the amount of shares possessed by the company, dates of their transfer to the company or acquisition by the company.

A company is obliged to ensure keeping and custody of the list of the company’s participants in compliance with the requirements of this Federal Law from the time of the company’s state registration.

  1. The person exercising the functions of the company’s sole executive body, if other body is not provided for by the company’s rules, shall ensure correspondence of the data on the company’s participants and on the shares or the parts of the shares in the company’s authorised capital possessed by them and on the shares or the parts of the shares possessed by the company to the data contained in the comprehensive state register of legal entities and to the deals of transfer of shares in the company’s authorised capital certified by a notary which have become known to the company.
  2. Each company’s participant is obliged to inform the company in due time on changes in the data on the name or denomination, place of residence or location thereof, as well as in the data on the shares in the company’s authorised capital possessed by him. If a company’s participant fails to supply information on changes in the personal data, the company shall not be held liable for the losses suffered in this connection.
  3. A company and the company’s participants which have not notified the company on changes in appropriate data are not entitled to refer to non-compliance of the data cited in the list of the company’s participants to the data contained in the comprehensive state register of legal entities in relations with third persons which have only acted subject to the data contained in the list of the company’s participants.
  4. Where there are disputes in connection with non-compliance of the data contained in the list of the company’s participants with the data contained in the comprehensive state register of legal entities, the right to a share or a part of a share in the company’s authorized capital shall be established on the basis of the data contained in the comprehensive state register of legal entities.

Should any dispute arise concerning unreliability of the data on the pertinence of the title to a share or a part of a share contained in the Uniform State Register of Legal Entities, the title to a share or a part of a share shall be established on base of the agreement or other document certifying to the fact thereto and proving the right of the founder or participant to a share or a part of a share.

 

Chapter IV. Management of a Company

Article 32. A Company’s Bodies

  1. The general meeting of a company’s participants shall be its supreme body. The general meeting of the company’s participants may be ordinary or extraordinary.

All the company’s partners shall have the right to attend the general meeting of its participants, take part in the discussion of the questions on its agenda and vote to take decisions.

Provisions of the company’s rules or decisions of the company’s bodies which restrict said participants’ rights shall be void.

Each participant shall have at the general meeting of the company’s participants a number of votes which is proportional to his share in the company’s authorized capital, except for the cases stipulated by this Federal Law.

The company’s charter adopted at the time of its establishment and the decision of the general meeting of the company’s participants adopted to introduce amendments into the charter by all participants unanimously may establish a different procedure for the determination of the number of votes held by its participants. Changes in, and the exclusion of, provisions of the company’s charter, which establish such procedure, shall be effected by decision of the general meeting of its participants, adopted by all the company’s participants unanimously.

  1. The company’s charter may provide for the formation of a council of directors (supervision council) of the company.

Paragraph two was abrogated from July 1, 2009

See the text of paragraph two of Item 2 of Article 32

Paragraph three was abrogated from July 1, 2009

See the text of paragraph three of Item 2 of Article 32

The procedure for the formation and the functioning of the council of directors or the supervisory council of the company, and also the procedure for the cessation of the powers of the members of the council of directors or the supervisory council of the company and the jurisdiction of the chairman of the council of directors or the supervisory council of the company shall be determined by its charter.

Members of the company’s executive body may not constitute over one-fourth of the membership of the council of directors (supervisory council) of the company. The person who discharges the functions of the sole executive body of the company may not be simultaneously the chairman of the council of directors or the supervisory council of the company.

By decision of the general meeting of the company’s participants the members of council of directors or the supervisory council may receive, during the time of the performance of their duties, remuneration and/or compensation for the expenses on the performance of said duties. The amount of said remuneration and compensation shall be fixed by decision of the general meeting of the company’s participants.

2.1. The scope of authority of a company’s board of directors (supervisory board) shall be defined by the company’s rules in compliance with this Federal Law. The company’s rules may stipulate that the following may pertain to the scope of authority of the company’s board of directors (supervisory board):

1) formulation of basic directions of the company’s activities;

2) formation of the company’s executive bodies and preschedule termination of their authority, as well as adoption of the decision on transfer of the authority of the company’s sole executive body to a profit-making organization or to an individual businessman (hereinafter referred to as the manager), endorsement of such manager and the terms of the agreement made with him/her;

3) fixing the rate of remuneration and monetary compensations for the company’s sole executive body and for members of the company’s collective executive body, as well as for the manager;

4) adoption of the decision on the company’s participation in associations and other unions of profit-making organizations;

5) arrangement of an audit inspection, endorsement of an auditor and fixing the rate of payment for his/her services;

6) endorsement or adoption of the documents regulating the company’s activities (the company’s internal documents);

7) establishment of the company’s branches and of representative offices thereof;

8) settlement of the issues of endorsement of interested-party transactions where it is provided for by Article 45 of this Federal Law;

9) settlement of the issues of endorsement of major deals where it is provided for by Article 46 of this Federal Law;

10) settlement of the issues of endorsement of major deals where it is provided for by Article 46 of this Federal Law;

11) other issues provided for by this Federal Law, as well as issues which are provided for by the company’s rules and are not classified as pertaining to the scope of authority of a general meeting of the company’s participants or of the company’s executive body.

2.2. Where the settlement of the issues connected with convocation and holding of a general meeting of a company’s participants is classified by the company’s rules as pertaining to the scope of authority of the company’s board of directors (supervisory board), the company’s executive body is entitled to demand holding an extraordinary meeting of the company’s participants.

  1. The members of the council of directors or the supervisory council of the company, the person who discharges the functions of the sole executive body of the company, and the members of the collective executive body of the company who are not company’s participants may attend the general meeting of the company’s participants with the right of a deliberative vote.
  2. The management of the company’s current activity shall be exercised by the sole executive body or the collective executive body of the company. The company’s executive bodies shall be subordinate to the general meeting of its participants and the council of directors or the supervisory council of the company.
  3. It shall be impermissible to transfer the right to vote of a member of the company’s council of directors or the supervisory council to other persons, including other members of the company’s council of directors or supervisory council, and to other members of the collective executive body of the company.
  4. The company’s charter may provide for the formation of an audit commission or the election of an inspector. In a company with more than 15 participants the formation of its audit commission or the election of an inspector shall be compulsory. A person who is not a company participant may become a member of its audit commission or inspector.

If this is stipulated by the company’s charter, the functions of its audit commission or inspector may be discharged by a professional auditor, endorsed by the general meeting of the company’s participants, if he is not connected with the company by property interests, who is approved by the members of the council of directors or the supervisory council of the company, if he is not connected with the person discharging the functions of the company’s sole executive body, and also by the members of the collective executive body of the company and its participants.

The members of the council of directors or the supervisory council of the company, the person who discharges the functions of the sole executive body of the company, and the members of the collective executive body of the company may not be members of the audit commission or the inspector of the company.

Article 33. The Jurisdiction of the General Meeting of a Company’s Participants

  1. The jurisdiction of the general meeting of the company’s participants shall be determined by its charter in accordance with the present Federal Law.
  2. The jurisdiction of the general meeting of the company’s participants includes

1) the determination of the basic directions of the company’s activity, and also the adoption of a decision on participation in associations and other formations of profit-making organisations;

2) the alteration of the company’s charter, including a change of the amount of the company’s authorized capital;

3) Abrogated from July 1, 2009

See the text of Subitem 3 of Item 2 of Article 33

4) forming of the company’s executive bodies and early termination of their powers, and also adoption of the decision on transfer of the powers of the sole executive body of the company to the manager, endorsement of such manager and the terms of the contract made with him/her, if the company’s rules do not classify the settlement of the said issues as pertaining to the scope of authority of the company’s board of directors (supervisory board);

5) the election and early cessation of the powers of the company’s audit commission or inspector;

6) the approval of annual reports and annual balance-sheets;

7) the adoption of a decision on the distribution of the company’s net profit among its participants;

8) the approval (adoption) of documents regulating the company’s internal activity or the company’s internal documents;

9) the adoption of a decision on the placement of bonds and other serial securities by the company;

10) the appointment of an audit, the confirmation of the auditor and the fixing the amount of payment for his services;

11) the adoption of a decision on the company’s reorganisation or liquidation;

12) the appointment of a liquidation commission and the approval of liquidation balances;

13) the settlement of other issues  provided for by the Federal Law or the companies charter.

The issues provided for by sub-points 2,5,-7,11 and 12 of the present Item and other issues related by the Federal Law to the exclusive jurisdiction of the general meeting of the company’s participant shall not be transferred by the company’s charter to the competence of other managing bodies thereto.

Article 34. The Regular General Meeting of a Company’s Participants

A regular general meeting of the company’s participants shall be held in the terms fixed by the company’s charter, but at least once a year. A regular general meeting of the company’s participants shall be convened by its executive body.

The company’s charter shall specify the time of holding a regular general meeting of the company’s participants for the approval of the annual results of its activity, The said general meeting of the company’s partners shall be held not earlier than two months and not later than four months after the end of the fiscal year concerned.

Article 35. The Extraordinary General Meeting of a Company’s Participants

  1. An extraordinary general meeting of the company’s participants shall be held in cases defined by the company’s charter, and also in any other cases, if such general meeting is necessitated by the company’s interests and those of its partners.
  2. An extraordinary general meeting of the company’s partners shall be convened by the company’s executive body at its initiative and at the demand of the council of directors or the supervisory council, the audit commission (inspector), the company, the auditor, and also of the company’s participants who possess in totality not less than one-tenth of the total number of the votes of the company’s participants.

Within five days of the date of the receipt of the demand for holding an extraordinary general meeting of the company’s participants the executive body of this company shall be obliged to consider this demand and take a decision on the holding of an extraordinary general meeting of the company’s participants or on refusal to hold it. A decision on refusal to hold an extraordinary general meeting of the company’s participants may be adopted by the company’s execution body in the following cases:

if the procedure for making a demand for the holding of an extraordinary general meeting of the company’s participants, established by this Federal Law, has not been observed;

if not a single question, proposed for the inclusion in the agenda of the company’s extraordinary general meeting of participants, is within its jurisdiction and corresponds to the requirements of federal laws.

If one question or several questions, proposed for the inclusion in the agenda of the company’s extraordinary general meeting of participants, are not covered by the jurisdiction of the general meeting and do not correspond to the requirements of federal laws, these question shall not be placed on the agenda.

The company’s executive body shall not have the right to introduce changes in the formulations of questions proposed for the inclusion in the agenda of the company’s extraordinary general meeting of participants, and also to modify the suggested form of holding an extraordinary general meeting of the company’s participants.

Alongside with the questions proposed for the inclusion in the agenda of the extraordinary general meeting of the company’s participants, the executive body of this company shall have the right to include in it additional questions at its own initiative.

  1. In the event of the adoption of a decision on holding an extraordinary general meeting of the company’s participants the said general meeting shall be held not later than 45 days from the receipt of the request to hold it.
  2. If no decision has been taken on the holding of an extraordinary general meeting of the company’s participants during the time fixed by this Federal Law, or if a decision has been taken to refuse to hold the meeting, an extraordinary general meeting of the company’s partners may be convened by the bodies or persons demanding it.

In this case the company’s executive body shall be obliged to give to the said bodies or persons the list of the company’s participants with their addresses.

Expenditure on the preparation, convocation and holding of such general meeting may be compensated for by decision of the general meeting of the company’s participants at the expense of the company’s funds.

Article 36. Procedure for the Convocation of a General Meeting of the Company’s Participants

  1. The body and the persons convening a general meeting of the company’s participants shall be obliged to notify every participant of the company about this not later than 30 days before the meeting and send the notification by registered mail at the address, indicated in the list of the company’s participants, or in any other way stipulated by the company’s charter.
  2. The notification shall indicate the time and place of the general meeting of the company’s participants, and also the offered agenda.

Any participant of the company shall have the right to table proposals on the inclusion of additional questions in the agenda of the general meeting of the company’s participants not later than 15 days before its holding. Additional questions, except for questions which do not fall under the jurisdiction of the general meeting of the company’s participants or do not meet the requirements of federal laws, shall be included in the agenda of the general meeting of the company’s participants.

The body or the persons convening the company’s general meeting shall have no right to introduce changes into the formulations of additional questions proposed for the inclusion in the agenda of the general meeting of the company’s participants.

If upon the proposal of the company’s participants changes are introduced into the original agenda of the general meeting of the company’s participants, the body or the persons convening the general meeting of the company’s participants shall be obliged not later than 10 days before its holding to notify all the participants about the changes introduced to the agenda by the method indicated in Item 1 of this Article.

  1. Information and materials to be presented to the company’s participants during the preparation of the general meeting include the following: the annual report of the company, the opinions of the audit commission or inspector of the company and the auditor concerning the results of the audit of the annual reports and annual balance-sheets of the company, information about a candidate or candidates to the company’s executive bodies, to the council of directors or the supervisory council of the company and the audit commission or the inspector of the company, the draft of amendments and addenda to be introduced into the company’s rules or draft company’s rules, of the company’s constituent instruments, the drafts of the company’s internal documents, and also other information or materials envisaged by the company’s charter.

If the company’s charter does not provide for a different procedure for the company’s participants to familiarize themselves with information and materials, the body or the persons who convene the company’s general meeting of participants shall be obliged to send to them information and materials together with the notice of the holding the company’s general meeting of participants, and in the case of change of the agenda relevant information and materials shall be sent with the notice of such change.

For 30 days before the holding of the company’s general meeting of participants, the said information and materials shall be presented to all the participants of the company for study in the premises of the company’s executive body. The company shall be obliged to grant copies of said documents at the request of a company participant. The charge collected by the company for the presentation of these copies may not exceed the expenses on their manufacture.

  1. The company’s charter may provide for a shorter period of time than those indicated in this Article.
  2. In the event of the violation of the procedure for holding the company’s general meeting of participants such general meeting shall be deemed to be competent, if it is attended by all the company’s participants.

Article 37. Procedure for Holding the General Meeting of a Company’s Participants

  1. The general meeting of the company’s participants shall be held in the Procedure prescribed by this Federal Law, the company’s charter and its internal documents. In respect of matters not regulated by this Federal Law, the company’s charter and its internal documents, the procedure for holding the general meeting of the participants shall be established by decision of the company’s general meeting.
  2. The company’s participants who have arrived shall be registered before the general meeting of these participants is opened.

The company’s participants shall have the right to attend the general meeting in person or send their representatives. The representatives of the company’s participants shall produce documents that confirm their proper powers. The power of attorney given to the representative of a company’s participant shall contain information about the represented participant and his representative (name, place of residence or location, passport data). It shall be completed in compliance with the requirements of Items 4 and 5 of Article 185 of the Civil Code of the Russian Federation and shall be notarized.

A non-registered participant or his representative shall have no right to take part in voting.

  1. The company’s general meeting shall be opened at the time indicated in the notification about the holding of the general meeting of the company’s participants or earlier, if all the company’s participants have already registered.
  2. The company’s general meeting of participants shall be opened by the person who discharges the functions of the sole executive body of the company or by the person who heads the collective executive body of the company. A company’s general meeting of participants, convened by the council of directors or the supervisory council, the audit commission or the inspector, auditor or by the company’s participants shall be opened by the chairman of the council of directors or the supervisory council, the chairman of the audit commission or the inspector of the company, the auditor or one of the company’s participants who convened this general meeting.
  3. The person who opens the general meeting of the company’s participants shall hold the election of the chairperson from among the company’s partners. Unless the company’s charter stipulates otherwise, every participant in the general meeting shall have one vote during the procedure of voting on the question of the election of the chairperson. A decision on this question shall be taken by a majority of votes of the company’s participants who have the right to vote at the given general meeting.
  4. The company’s executive body shall organize the keeping of the minutes of the general meeting of the company’s participants.

The minutes of all general meetings of the company’s participants shall be filed in the book of minutes, which shall be presented at any time to any partner for his acquaintance. Upon the demands of the company’s participants they are to be given extracts from the book of minutes, certified by the company’s executive body.

At latest in ten days after drawing up the record of a general meeting of a company’s participants the company’s executive body or other person engaged in keeping the said record are obliged to forward a copy of the record of the general meeting of the company’s participants to all the company’s members in the procedure provided for the report on holding a general meeting of the company’s participants.

  1. The general meeting of the company’s participants shall have the right to take decisions only on the questions of the agenda to be communicated to the company’s participants in keeping with Items 1 and 2 of Article 36 of the present Federal Law, except for the cases, if all its participants attend the given general meeting.
  2. Decisions on the questions indicated in Subitem 2 of Item 2 of Article 33 of this Federal Law, and also on other questions determined by the company’s charter shall be taken by a two-thirds majority of the votes of the company’s total number of participants, unless the present Federal Law or the company’s charter provides for a greater number of votes for the adoption of such decision.

Decisions on the issues indicated in Subitem 11 of Item 3 of Article 33 of this Federal Law shall be taken by all participants of a company unanimously.

The remaining decisions shall be taken by a majority of votes of the company’s participants, unless this Federal Law or the company’s charter provides for a greater number of votes for the adoption of such decisions.

  1. The company’s charter may provide for cumulative voting for questions of the election of the members of the council of directors or the supervisory council of the company, the members of the collective executive body of the company and/or the members of the company’s audit commission.

In the case of cumulative voting the number of votes held by every partner of the company shall be multiplied by the number if the persons to be elected to the company’s body, and the company participant shall have the right to use the full number of votes obtained in this way for one candidate or to distribute them between two or more candidates. Candidates who received the greatest number of votes shall be deemed to be elected.

  1. The decision of the general meeting of the company’s participants shall be taken by open vote, unless the its charter provides for a different method of decision-making.

Article 38. A Decision of the General Meeting of the Company’s Participants Taken by Voting in the Absence of the Voting Participants (By Inquiry)

  1. A decision of the general meeting of the company’s participants may be taken without holding a meeting (the joint presence of the company’s participants for discussion of the questions on the agenda and for the adoption of decisions on questions put to the vote) by conducting an absentee vote (by survey). Such voting may be held by the exchange of documents through postal, telegraphic, teletype, telephone, electronic or any other communication that ensures the authenticity of transferred and received messages and their documentary confirmation.

A decision of the general meeting of the company’s participants on the questions, indicated in Subitem 6 of Item 2, Article 33 of this Federal Law may not be taken by holding an absentee vote (by survey).

  1. Items 2, 3, 4, 5 and 7 of Article 37 of this Federal Law, and also the provisions of Items 1, 2 and 3 of Article 36 of this Federal Law shall not be applied in respect of the time-limits stipulated by them, when the general meeting of the company’s participants takes a decision by holding an absentee vote (by survey).
  2. The procedure for holding an absentee vote shall be determined by the company’s internal documents, which shall provide for the compulsory communication of the proposed agenda to all the company’s participants, for the possibility of all its partners familiarizing themselves with all essential information and materials before the vote, the possibility of tabling proposals on the inclusion of additional questions in the agenda, the compulsory familiaration of all its partners with the changed agenda before the vote, and also the time of the end of the voting procedure.

Article 39. The Adoption of Decisions on the Questions Relating to the Terms of Reference of the Meeting of the Company’s Participants by the Sole Partner of the Company

Decisions on questions relating to the terms of reference of the general meeting of the participants of a company that consists of one participant shall be taken by its sole participant individually and in writing. In this case the provisions of Articles 34, 35, 36, 37, 38 and 43 of this Federal Law shall not be applied, except for the provisions dealing with the time of holding the annual general meetings of the company’s participants.

Article 40. A Company’s Individual Executive Body

  1. The company’s sole executive body (director general, president, etc.) shall be elected by a general meeting of its participants for a period defined by the company’s rules, if the company’s rules do not classify these issues as pertaining to the scope of authority of the company’s board of directors (supervisory board). The company’s individual executive body may also be elected from outside its participants.

The agreement to be concluded between the company and the person who discharges the functions of the company’s individual executive body shall be signed on behalf of the company by the person who presided over the general meeting of its participants, which elected the person for the discharge of the functions of the sole executive body of the company, or by the company’s partner authorized by the general meeting for this purpose, or, if the settlement of these issues is referred to the scope of authority of the company’s board of directors (supervisory board), by the chairman of the company’s board of directors (supervisory board) or by the person authorized by decision of the company’s board of directors (supervisory board).

  1. Only a natural person may act as an individual executive body of the company with the exception of the case provided for by Article 42 of this Federal Law.
  2. The company’s individual executive body shall:

1) act on behalf of the company without a power of attorney, represent its interests and complete transactions;

2) issue powers of attorney for the right of representation on behalf of the company, including powers of attorney with the power of substitution;

3) issue orders on the appointment of the company’s employees to relevant offices, on their transfer and dismissal, apply measures of encouragement and impose disciplinary penalties;

4) discharge other powers which are not assigned by this Federal Law or the company’s charter to the jurisdiction of the general meeting of its participants, of the council of directors or the supervisory council of the company and the collective executive body of the company.

  1. The procedure of the functioning of the individual executive body of the company and of its decision-making shall be established by the company’s charter, its internal documents, and also by the agreement concluded between the company and the person who discharges the functions of its individual executive body.

Article 41. A Company’s Collective Executive Body

  1. If a company’s charter provides for the establishment of a collective executive body of the company (a board, directorate, etc.) in addition to the individual executive body of the company, such collective body shall be elected by the company’s general meeting of participants in the number of its numbers and for the period of time fixed by the company’s charter. The company’s rules may provide for classifying the issues of forming the company’s collective executive body and preschedule termination of authority thereof as pertaining to the scope of authority of the company’s board of directors (supervisory board).

Only a natural person, who may not be a company participant, may become a member of the collective executive body of the company.

The collective executive body of the company shall discharge the powers assigned by its charter to its jurisdiction.

The functions of the chairman of the company’s collective executive body shall be performed by the person who discharges the functions of the company’s individual executive body, except for the case when the powers of the company’s individual executive body has been transferred to its manager.

  1. The procedure for the functioning of the company’s collective executive body and for its decision-making shall be established by the company’s charter and its internal documents.

On the particularities in regulating the work of the members of an organisation’s collective executive body, see the Labour Code of the Russian Federation

Article 42. Transfer of the Powers of the Sole Executive Body of a Company to Its Manager

  1. A company is entitled to transfer the powers of its sole executive body to its manager under a respective agreement.
  2. The company that has transferred the powers of the sole executive body thereof to the manager shall exercise civil rights and assume civil duties through the manager acting in compliance with federal laws, other regulatory acts of the Russian Federation and the company’s rules.
  3. The agreement to be concluded with the manager shall be signed on behalf of the company by the person who presided over the general meeting of its participants, which endorsed the terms of the agreement with the manager, or by the company participant who has been authorized by decision of the general meeting of the company’s participants, or, if settlement of these issues is referred to the scope of authority of the company’s board of directors (supervisory board), by the chairman of the company’s board of directors (supervisory board) or by the person authorized by decision of the company’s board of directors (supervisory board).

Article 43. Appealing Against a Company’s Management Bodies

  1. A decision of the general meeting of the company’s partners, taken in a breach of the requirements of this Federal Law, other legal acts of the Russian Federation, the company’s charter and violating the rights and lawful interests of a company’s participant, may be recognized by a court of law as invalid upon the application of a participant who has not taken part in voting or voted against the disputable decision.
  2. The court of law shall be entitled to leave in force the appealed decision taking account of all circumstances of a case, if the voting of the company’s participant who has filed the application, could not affect the results of the vote, if the admitted violations are not substantial and the decision has not involved the infliction of damage on the company’s participant.
  3. A decision taken by the council of directors or the supervisory council, by the individual or collective body of the company and the manager in the violation of the requirements of this Federal Law, other legal acts of the Russian Federation, the company’s charter and with a breach of the rights and lawful interests of a company participant may be recognized by a court of law as invalid upon the application of this participant.

The court of law shall be entitled to leave in force the appealed decision taking into account the circumstances of a case, if the violations made are not substantial and the violation did not inflict damage on the company or certain participant or materially adverse effect for them.

(The paragraph 2 of Article 43 of this Federal Law will enter into force from 21 October 2009).

  1. An application of a company’s participant on invalidation of a decision of the general meeting and /or decisions of other executive bodies of the company may be filed within two months from the day when the company’s participant learned or should have learned about the adopted decision and about the circumstances of relevance being the ground for invalidation thereto. The deadline for lodging an appeal of a decision adopted by the general meeting of the company’s participants or other executive bodies of the company, as provided for by this Item, shall not be revived if missed, except the case when a participant failed to lodge an appeal under the influence of violence or threat.
  2. Invalidation of a decision taken by the council of directors (supervisory council ) on convening the general meeting of the company’s participants shall not entail invalidation of a decision adopted by the general meeting of the participants of the company conducted as per the decision on convening the meeting further recognized as invalid. A breach of the Federal Law, other legal acts of the Russian Federation made while convening the general meeting of the participants of the company shall be subject of litigation proceedings at the case of the appeal of the relevant decision of the general meeting of the company’s participants.

Invalidation of a decisions of the general meeting of the company’s participants or a decision of the council of directors (supervisory council) on approval of major transactions and interested party transactions in case of appeal of the decisions made separately from challenging the transactions thereof shall not entail invalidation of the relevant transactions.

  1. The decisions of the general meeting of the company’s participants on the issues not included into the agenda (except the case when all the participants were present at the general meeting) or adopted without the majority of vote of the company’s participants necessary to adopt a decision shall be invalid regardless of any court appeal taken.

(The items 4-6 of Article 43 of this Federal Law will enter into force from 21 October 2009)

Article 44. The Responsibility Held by the Members of a Company’s Council of Directors or Supervisory Council, the Individual Executive Body and the Members of the Collective Executive Body and the Manager

  1. The members of the council of directors or the supervisory body of a company, the individual executive body of the company, the members of the collective executive body of the company, and also the manager shall act reasonably and in the company’s interests in the course of the exercise of their rights and of the performance of their duties.
  2. The members of the company’s council of directors or supervisory council, the individual executive body of the company, the members of the collective executive body of the company, and also the manager shall bear liability to the company for the losses caused to the company by their inappropriate actions (inaction), unless federal laws establish other grounds and extent of liability. In this case the members of the council of directors or the supervisory council of the company and the members of the collective executive body of the company who voted against the decision, that involved the infliction of losses to the company, and who did not participate in the vote, shall bear no liability.
  3. In determining the grounds and the extent of the liability of the members of the council of directors or the supervisory council of the company, the individual executive body of the company and of the members of the collective executive body of the company, and also the manager, it is necessary to take into account the usual conditions of business and other circumstances of relevance to the case concerned.
  4. If several persons bear liability in keeping with the provisions of this Article, their liability to the company shall be joint.
  5. The company or a participant thereof shall have the right to lodge a claim in court for the compensation of damages inflicted on the company by a member of the council of directors or the supervisory council of the company, by the individual executive body of the company or by a member of the collective executive body of the company, or by the manager.

Article 45. Interest in the Completion of a Transaction by the Company

See “Overview of the Resolution of Disputes Associated with the Conclusion by Commercial Companies of Major Transactions and Interested Party Transactions In Whose”, given by Information Letter of the Presidium of the Higher Arbitration Court of the Russian Federation No. 62 of March 13, 2001

  1. Transactions (in particular those of loan, credit, pledge or guarantee), in the completion of which a member of the company’s council of directors or supervisory council or a person who discharges the functions of the individual executive body, or a member of the company’s collective executive body has an interest, and also a participant of the company having together with affiliated persons 20 and more percent of the votes of the company’s total number of votes, who has an interest, , as well as the person entitled to give instructions to the company to be followed without fail, shall be made by the company in compliance with the provisions of this article.

The said persons shall be recognized as interested in the completion of a transaction in the following cases, if they, their spouses, parents, children, brothers and sisters of the whole blood and of half blood, adoptive parents and adoptive children and/or their affiliated persons:

are a party to the transaction or act in the interest of third persons in their relations with the company;

possess (each separately or in totality) 20 or more per cent of shares (stakes or unit shares) of a legal entity that is a party to a transaction or that acts in the interests of third persons in their relations with the company;

hold offices in the management bodies of the legal entity that is a party to a transaction or that acts in the interests of thirds persons in their relations with the company, as well as offices in administrative bodies of the management organization of such legal entity;

in other cases defined by the company’s charter.

  1. Persons indicated in the first paragraph of Item 1 of this Article shall bring to the notice of the general meeting of the company’s partners the following information:

about the legal persons in which they, their spouses, parents, children, brothers and sisters of the whole blood and of half blood, adoptive parents and adoptive children and/or their affiliated persons possess 20 and more percent of shares (stakes and unit shares);

about the legal persons in which they, their spouses, parents, children, brothers and sisters of the whole blood and of half blood, adoptive parents and adoptive children and/or their affiliated persons hold offices in the management bodies;

about the known transactions that are performed or are about to be performed, in the completion of which they may be recognized as interested.

  1. A transaction in which participants take interest shall be approved by the decision of a general meeting of the company’s participants.

The decision on approval of an interested party transaction shall be adopted by a general meeting of a company’s participants by a majority vote of the total number of the company’s participants which do not take interest in making such transaction.

The decision on approval of such transaction shall cite the person or persons that are the parties to or beneficiaries under this transaction, the price and the subject of the transaction, as well as other essential terms thereof.

A general meeting of a company’s participants may adopt the decision on approval of an interested party transaction which can be made in future in the course of exercising by the company its normal economic activities. In so doing, the decision on approval of the transaction shall cite the ceiling amount to which such transaction may be made. The decision on approval of the transaction shall be valid pending the next general meeting of the company’s participants, if not otherwise provided for by the said decision.

  1. An interested party transaction shall not require its approval by a general meeting of a company’s participants, if the terms of such transaction do not differ markedly from those of similar transactions (in particular transactions of loan, credit, pledge or guarantee) made by the company and a person concerned in the course of its normal economic activities exercised by the company before the time when the person concerned was recognised as such in compliance with Item 1 of this article. The said exception shall only extend to the interested party transactions and to those which were made since the time when the person concerned was recognized as such and up to the time when the next regular general meeting of the company’s participants was held.
  2. An interested party transaction completed with a breach of the requirements provided for by the Article, may be recognized as invalid upon the claim of the company or a participant thereof.

The statute of limitations related to a claim for invalidation of an interested party transaction shall not be revived in case the time limit elapsed.

The court of justice shall dismiss a claim for invalidation of an interested party transaction completed with a breach of the requirements provided for by the Article in the presence of one of the following circumstances:

the vote of a participant of a company having no interest in a transaction, who filed an action on invalidation of the transaction which was to be approved by the general meeting of the participants could not have effected the voting results, even though he voted himself;

it is a disproved matter, that the transaction resulted or may result in infliction of damage on the company or a company participant who had filed an action or

may have materially adverse effect for them;

to the moment of court proceedings the evidence has been introduced of further approval of the transaction in accordance with the rules of procedure provided for by this Article taking into consideration the interest of the persons related to in Item 1 of the present Article existing at the moment of realization and approval of the transaction;

While court proceedings it has been proved, that the other party to the transaction was not aware and should not have been aware of the completion of the transaction with a breach of the requirements provided for by the present Article.

Transaction with a breach of the requirements provided for by the present Article.

That the other party to the transaction was not aware and should not have been aware of the completion of the transaction with a breach of the requirements provided for by the present Article.

(The item 5 of Article 45 of this Federal Law will enter into force from 21 October 2009)

  1. The provisions of this article shall not extend to the following:

companies consisting of a single person which concurrently exercises the functions of this company’s sole executive body;

transactions in which all the company’s participants take interest;

relations arising when a share or a part of a share in a company’s authorised capital is transferred to it in the cases provided for by this Federal Law;

relations arising when property rights are transferred in the course of a company’s re-organisation, in particular to agreements of merger and agreements of affiliation;

transactions whose making is obligatory for a company under federal laws and/or other regulatory legal acts of the Russian Federation, as well as under which settlements are made at fixed prices and tariffs established by the bodies authorized in the area of the state regulation of prices and tariffs.

6.1. A person shall be recognized as an affiliated one in compliance with the requirements of the legislation of the Russian Federation.

Affiliated persons of a company are obliged to notify the company in writing about the shares or parts of the shares possessed by them at latest in ten days as of the date when a share or a part of a share are acquired which together with the shares in the company’s authorised capital possessed by the said persons give the right to dispose of more than twenty per cent of the total number of votes of this company’s participants.

If as a result of failure to supply the said information or failure to supply it in due time through the fault of an affiliated person property damage has been caused to the company, the affiliated person shall liable to the company within the limits of the damage caused.

  1. If the company has a council of directors or supervisory council, the adoption of a decision on the completion of interested Party transactions may be assigned by the company’s charter to its jurisdiction, except for cases when the amount of payment in the transaction or the value of assets that are the subject-matter of the transaction exceeds 2 percent of the value of the company’s property, estimated on the basis of the accounting data over the last reporting period.

Article 46. Major Transactions

  1. A transaction or several interrelated transactions (in particular the transaction of loan, credit, pledge or guarantee) shall be deemed to be a major transaction, if it is associated with the acquisition or alienation or with possibility of the direct or indirect alienation by the company of assets whose value comprises 25 and more percent of the value of the company’s property, estimated on the basis of the accounting data over the last reporting period that precedes the day of the adoption of a decision on the completion of such transactions, unless the company’s charter provides for a higher value for a major transaction. Transactions completed in the process of the company’s usual economic activity shall not be deemed to be major transactions.
  2. For the purposes of this Article the value of the assets alienated by the company as a result of a major transaction shall be estimated on the basis of its accounting data, whereas the value of the assets acquired by the company shall be estimated on the basis of the bid price.
  3. A decision on the approval of a major transaction shall be taken by the general meeting of the company’s participants.

The decision on approval of a major transaction shall cite the persons which are the parties to and beneficiaries under this transaction, the price and the subject thereof and other essential terms thereof. The decision may not cite the persons which are the parties to or beneficiaries to the transaction, if the transaction is to be made through an auction, as well as in other cases when the parties to and beneficiaries under a major transaction cannot be determined by the time when it is approved.

  1. If the company has a council of directors or a supervisory council, the decision-making on the approval of major transactions associated with the acquisition or alienation, or the possible direct or indirect alienation of assets whose value comprises from 25 to 50 percent of the value of the company’s property may be assigned by the company’s charter to the jurisdiction of the company’s council of directors or supervisory council.
  2. A major transaction completed with a breach of the requirements provided for by the Article may be recognized as invalid upon the claim of the company or a participant thereof.

A missed deadline for a claim for invalidation of a major transaction shall not be revived.

The court of justice shall dismiss a claim for invalidation of a major transaction completed with a breach of the requirements provided for by this Article in the presence of one of the following circumstances:

the vote of a participant of a company having no interest in a transaction, who filed an action on invalidation of the major transaction which was to be approved by the general meeting of the participants could not have effected the voting results, even though he voted himself;

it is a disproved matter, that the transaction resulted or may result in infliction of damage on the company or a company’s participant who had filed an action or

may have materially adverse effect for them;

to the moment of court proceedings the evidence has been introduced of further approval of the transaction in accordance with the rules of procedure provided for by the Federal Law;

while court proceedings it has been proved, that other party to the transaction was not aware and should not have been aware of completion of the transaction with a breach of the requirements provided for by the Article thereto.

(The item 5 of Article 46 of this Federal Law will enter into force from 21 October 2009)

  1. The company’s charter may stipulate that no decision is required from the general meeting of the company’s participants or the company’s council of directors or supervisory council for the completion of major transactions.
  2. Along with the cases cited in Item 1 of this article, a company’s rules may provide for other kinds and/or the size of transactions which the procedure for approval of major transactions established by this article extends to.
  3. Where a major transaction is also an interested party transaction, the provisions of Article 45 of this Federal Law shall apply to a procedure for approval of such major transaction, except when all the company’s participants are interested in making it. If all the company’s participants are interested in making a major transaction, the provisions of this article shall apply to a procedure for its approval.
  4. The provisions of this article on a procedure for approval of major transactions shall not apply to the following:

1) companies consisting of a single participant which is concurrently exercises the functions of the sole executive body of this company;

2) relations arising in the course of transfer of a share or of a part of a share in a company’s authorised capital where it is provided for by this Federal Law;

3) relations arising in the course of transfer of property rights in the course of a company’s re-organisation, in particular to agreements of merger and agreements of affiliation.

Article 47. The Company’s Audit Commission or Inspector

  1. The company’s audit commission or its inspector shall be elected by the general meeting of this company for a period of time fixed by the company’s charter.

The number of the members of the company’s audit commission shall be determined by the company’s charter.

  1. The audit commission or the inspector of the company shall be have the right to hold audits of the company’s financial and economic activity at any time and to have access to all documents on the company’s activity. At the request of the company’s audit commission or inspector the numbers of the council of directors or the supervisory council, the person discharging the functions of the individual executive body of the company, the members of the collective executive body of the company, and also the company’s employees shall be obliged to give the necessary explanations in oral and written form.
  2. The company’s audit commission or inspector shall carry out without fail audits of the annual reports and balance-sheets of the company before they are approved by the general meeting of the company’s participants. The general meeting of the participants shall have no right to endorse the annual reports and balance-sheets of the company in the absence of the auditing commission’s opinion or that of the company’s inspector.
  3. The procedure for the work of the company’s audit commission or inspector shall determined by the company’s charter and internal documents.
  4. The present Article shall be applied if the formation of the company’s audit commission or the election of its inspector is provided for by the company’s charter or is compulsory in keeping with this Federal Law.

Article 48. An Audit of a Company

To audit and confirm the correctness of a company’s annual reports and balance-sheets, and also to verify the present condition of the company’s affairs, the company shall have the right, by decision of the general meeting of its participants, to attract a professional auditor who is not connected with the company by property interests, with the members of the council of directors or the supervisory council of the company, with the person who discharges the functions of the individual executive body of the company and with the members of the collective executive body of the company and its participants.

At the demand of any participant of the company an audit may be carried out by the professional auditor chosen by him. This auditor shall meet the requirements of the first part of this Article. If such an audit has been carried out, the auditor’s services shall be paid at the expense of the company’s participant who initiated this audit. The expenses incurred by the company’s participant on the payment of the auditor’s services may be compensated to him by decision of the general meeting of the company’s participants at the expense of the company’s funds.

The attraction of an auditor for auditing and confirming the correctness of the company’s annual reports and balance-sheets shall be obligatory in cases provided for by the federal laws and other legal acts of the Russian Federation.

Article 49. A Company’s Public Reporting

  1. A company shall not be obliged to publish reports on its activity, except for the cases provided for by this Federal Law and other federal laws.
  2. In the event of the public placement of bonds and other issued securities the company shall be obliged to publish every year its annual reports and balance-sheets, and also reveal other information about its activity, stipulated by federal laws and normative acts adopted in accordance with these laws.

Article 50. The Safe-keeping of a Company’s Documents and Presenting Information by the Company

  1. A company shall be obliged to keep the following documents:

the agreement on the company’s establishment, except when a company is established by a single person, the decision on the company’s establishment, the company’s rules, as well as amendments made in the company’s rules and registered in the established procedure;

the records of the meeting of the company’s founders, which contain the decision on the establishment of the company and on the approval of the monetary appraisal of non-cash contributions to the company’s authorized capital, and also other decision bearing on the establishment of the company;

the document confirming the state registration of the company;

documents confirming the company’s rights to the assets held on its balance;

the company’s internal documents;

the regulations for the company’s branches and representative offices;

the documents associated with the issue of bonds and other serial securities of the company;

the minutes of the general meetings of the company’s partners, of the sittings of the company’s council of directors or supervisory councils, of the collective executive body and the audit commission of the company;

the lists of the company’s affiliated persons;

 

On the Procedure for Keeping Accountancy and Presenting Information About Affiliated Persons of Credit Organisations, see Regulations of the Central Bank of Russia No. 307-P of July 20, 2007

the audit reports of the audit commission or the inspector of the company, of the professional auditor, of the state and municipal bodies of financial control;

other documents stipulated by federal laws and other legal acts of the Russian Federation, the company’s charter and internal documents, the decisions of the company of the company’s partners, of the council of directors or the supervisory council and the company’s executive bodies.

  1. The company shall keep documents, provided for by Item 1 of this Article, at the location of its individual executive body or in any place which is known and accessible to the company’s participants.
  2. A company shall be obliged to ensure the access of the company’s participants to the available judicial acts related to the company’s creation, management or participation including arbitration court orders on commencement of proceedings and initiating proceedings on a statements of claim or a statement on change of the ground or subject of the statement of claim made previously.
  3. A company shall be obliged on a requirement made by a company’s participant to ensure the access to the documents, as provided for in Items 1 and 3 of the Article. Within three days from the moment such requirement is made by a company’s participant the named documents shall be provided by the company for familiarization in the premises of the executive body. The company on the relevant requirement by the participant shall provide him with the copies of the named documents. The sum charged for the copies shall not exceed the cost of making the copies thereto.

(The items 3-4 of Article 50 of this Federal Law will enter into force from 21 October 2009)

 

Chapter V. The Reorganisation or Liquidation of a Company

Article 51. The Reorganisation of a Company

  1. A company may be reorganized on a voluntary basis in the Procedure provided for by this Federal Law.

Other grounds for the reorganisation of a company and the procedure thereof shall be determined by the Civil Code of the Russian Federation and other federal laws.

On the Reorganization of Credit Institutions in the Form of Merger and Affiliation, see Regulations of the Central Bank of Russia No. 230-P of June 4, 2003

  1. The reorganisation of a company may be effected in the form of merger, acquisition, division, separation and transformation.
  2. A company shall be deemed to the reorganized, except for the case of reorganisation in the form of acquisition, from the time of the state registration of legal entities set up as a result of reorganisation.

When a company is reorganized in the form of acquisition by another company, the first shall be deemed to be reorganized from the time of entering the entry on the cessation of the acquired company’s activity in the single state register of legal entities.

  1. The state registration of companies set up as a result of reorganisation and the entry of records on the cessation of reorganized companies’ activity, and also the state registration of amendments in their charters, shall be effected in the order established by federal laws.
  2. A company being reorganized after the relevant entry in the Uniform State Register of Legal Entities on starting the reorganization procedure shall twice with the periodicity of once a month publish a report on the reorganization in the press medium, where the data on the state registration of legal entities are published. In case two or more companies participate to the reorganization the report on the reorganization shall be published on behalf of all the participants thereof by the last to have made the decision on the reorganization or as stipulated in the agreement on the merger or acquisition. With this the company’s creditors not later than within 30 days from the date of the last publication of the report on the reorganization shall be entitled to require in written form the pre-term fulfillment of the relevant obligation by the debtor, and in case of impossibility of the pre-term fulfillment of the obligation thereto – annulment and compensation of the losses thereof.

(The item 5 of Article 51 of this Federal Law will enter into force from 21 October 2009)

The state registration of companies set up as a result of reorganisation and the entry of records on the cessation of the reorganized companies activities shall be effected only upon the presentation of proof of the notification of the creditors in the Procedure established by the present item.

In accordance with Letter of the Federal Tax Service No. CHD-6-09/440 of May 27, 2005, when registering re-organisation of economic companies and unitary enterprises, the said legal entities shall be obliged to present to the registration body the proof of their creditors’ notification. In the absence of the said proof, the registration body shall decide on the refusal to effect the state registration of a legal entity

If the division balance sheet makes it impossible to determine the legal successor of the reorganized company, the legal persons set up as a result of the reorganisation shall bear joint liability to the creditors for the reorganized company’s obligations.

Article 52. The Merger of Companies

  1. The establishment of a new company with the transfer to it of all the rights and duties of two or several companies and the dissolution of the latter shall recognized as the merger of companies.
  2. The general meeting of the partners of each company that participates in a reorganisation in the form of merger shall take a decision on such reorganisation, on the approval of the agreement on the merger and of the charter of the company set up as a result of the merger, and also on the approval of the relevant dead of conveyance.
  3. Companies participating in merger shall make an agreement of merger defining a procedure for and terms of merger, procedure for exchange of shares in the authorised capital of each company for shares in the authorized capital of the new company.

In the event of merger of companies, the shares in the companies authorized capitals possessed by other companies participating in the merger shall be redeemed.

  1. If the general meeting of the partners of each company that participates in the reorganisation in the form of merger, takes a decision on such reorganisation and on the approval of the agreement on the merger, the charter of the company being set up as a result of the merger and of the deed of conveyance, the executive bodies of the company being set up as a result of the merger shall be elected at the joint general meeting of the participants of the companies which take part in the merger. The time and the procedure for holding such general meeting shall be determined in the agreement on the merger.

The individual executive body of the company being set up as a result of the merger shall perform the actions associated with the state registration of this company.

  1. In the case of the merger of companies all the rights and obligations of each of them shall pass to the company that has been set up as a result of the merger in conformity with the deeds of conveyance.

Article 53. The Acquisition of a Company

  1. The dissolution of one or several companies with the transfer of all their rights and obligations to another company shall be deemed to an acquisition of the company concerned.
  2. The general meeting of the partners of each company that participates in the reorganisation in the form of an acquisition shall adopt a decision on such reorganisation, the approval of the agreement on the acquisition, while the general meeting of the partners of the company being joined shall also take a decision on the approval of the deed of conveyance.
  3. The joint general meeting of the partners of the companies participating in the acquisition shall introduce into the rules of the company to which the other company joins the amendments, provided for by the agreement on the acquisition, and also in case of necessity shall settle other questions, including the questions of the election of the bodies of the company which is joined by the other company. The time and the procedure for holding such a general meeting shall be determined by the agreement on the acquisition.

3.1. When a company is affiliated, the following is to be redeemed:

1) the shares possessed by the company to be affiliated in the authorised capital of the affiliating company;

2) shares in the authorised capital of the company to be affiliated possessed by this company;

3) shares in the authorized capital of the company to be affiliated which are possessed by the affiliating company;

4) shares in the authorised capital of the affiliating company possessed by this company.

  1. When one company joins the other company, the latter shall take over all the rights and obligations of the joined company in conformity with the deed of conveyance.

Article 54. The Division of a Company

  1. The dissolution of a company with the transfer of all its rights and obligations to the newly-established companies shall be deemed to be a division of the company concerned.
  2. The general meeting of the partners of the company being reorganized in the form of a division shall take a decision on such reorganisation, on the procedure and the conditions of the division of the company, the creation of new companies and the approval of the division balance sheet.
  3. The general meeting of the participants of each company to be set up as a result of the division shall endorse its charter and elect its management bodies.
  4. When the company is divided, all its rights and obligations shall pass to the companies, which have been set up as a result of the division, in conformity with the division balance sheet.

Article 55. The Separation of a Company

  1. The creation of one or several companies with the transfer to it or to them of the part of the rights and obligations of the company being reorganized without its dissolution shall be deemed to be a separation of the company concerned.
  2. The general meeting of the partners of the company being reorganized in the form of a separation shall take a decision on such reorganisation, on the procedures and the conditions of the separation, the creation of a new company or new companies and on the approval of the division balance sheet, shall introduce into the rules of the company being reorganized in the form of separation the amendments, provided for by the decision on the separation, and also in the case of necessity shall settle other questions, including those of the election of the company’s management bodies.

The general meeting of the partners of the company being separated shall endorse its charter and elect the company’s management bodies.

If the company being reorganized is the sole participant of the company being separated, the general meeting of the latter shall take a decision on the reorganisation of the company in the form of the separation, on the procedure and the conditions for the separation, and also shall endorse the charter of the company being separated and the division balance sheet and shall elect the management bodies of the company being separated.

  1. When one or several companies are separated from the company, each of them shall assume a part of the rights and obligations of the reorganized company in keeping with the division balance sheet.

Article 56. The Transformation of a Company

  1. A company has the right to be transformed into a business company of another kind, a business partnership or a production cooperative.
  2. The general meeting of the partners of the company being reorganized in the form of transformation shall take a decision on such reorganisation, on the procedure and the conditions of the transformation, the procedure for the exchange of the stakes of the company’s participants for the shares of the joint-stock company, for the stakes of the participants of a company with additional liability, shares in and contributions to the pooled capital of a business partnership or for the unit shares of the members of the production cooperative, and on the approval of the charter of a legal entity, and also on the approval of the deed of conveyance.
  3. The partners of the legal entity being set up as a result of transformation shall take a decision on the election of its management bodies in keeping with the requirements of the federal laws for such legal entities and shall instruct the respective body to perform the actions associated with the state registration of the legal entity being set up as a result of the transformation.
  4. When a company is transformed, the legal entity set up as a result of the transformation shall assume all the rights and obligations of the reorganized company in accordance with the deed of conveyance.

 

Federal Law No. 31-FZ of March 21, 2002 amended Article 57 of this Federal Law. The amendments shall enter into force as of July 1, 2002

See the previous text of the Article

Article 57. The Liquidation of a Company

  1. A company may be liquidated on a voluntary basis in the order prescribed by the Civil Code of the Russian Federation subject to the requirements of this Federal Law and the company’s charter. A company may be liquidated also by a court decision on the grounds stipulated by the Civil Code of the Russian Federation.

The liquidation of the company shall involve its dissolution without the transfer of the rights and obligations by way of legal succession to other persons.

  1. The decision of the general meeting of the company’s partners on the voluntary liquidation of the company and on the appointment of its liquidation commission shall be taken on the proposal of the company’s council of directors or supervisory council, the executive body or a participant of the company.

The general meeting of the participants of the company being liquidated on a voluntary basis shall take a decision on the liquidation of the company and the appointment of its liquidation commission.

  1. From the time of the appointment of the liquidation commission it shall assume all the powers of administering the company’s affairs. The liquidation commission shall act in court on behalf of the company being liquidated.
  2. If the Russian Federation, a subject thereof or municipal formation is a participant of the company being liquidated, the liquidation commission shall include representatives of the federal state property management body, the specialized agency selling federal property, the state property management body of a subject of the Russian Federation, the seller of the state property of this subject or the local self-government body.
  3. The procedure for the liquidation of a company shall be determined by the Civil Code of the Russian Federation and by other federal laws.

Article 58. The Distribution of the Assets of the Company Being Liquidated Among Its Participants

The assets of a company being liquidated that remain after the completion of settlements with creditors shall be distributed by the liquidation commission among the company’s participants in the following order of sequence:

in the first place the commission shall pay to the company’s participants the distributed but unpaid part of the profit;

secondarily, it shall distribute the property of the company being liquidated among the company’s participants in proportion to their stakes in the company’s authorized capital.

the claims of each level shall be satisfied after the full satisfaction of the claims of the previous level.

If the company’s assets are insufficient for the payment of the distributed by unpaid part of the profit, the company’s assets shall be distributed among its participants in proportion to their stakes in the company’s authorized capital.

Chapter VI. Concluding Provisions

Article 59. The Entry into Force of This Federal Law

  1. The present Federal Law shall enter into force from March 1, 1998.
  2. From the time of the entry into force of this Federal Law the legal acts which operate on the territory of the Russian Federation shall be applicable in that part that does not contradict this Federal Law before they are brought into conformity with this Federal Law.

From the entry into force of this Federal Law the constituent documents of limited liability companies or of limited liability partnerships shall be applicable in that part that does not contradict this Federal Law.

Federal Law No. 193-FZ of December 31, 1998 amended Item 3 of Article 59 of this Federal Law

See the previous text of the Item

  1. The constituent documents of the limited liability companies or limited liability partnerships created prior to the putting into effect of this Federal Law shall be brought into conformity with this Federal Law not later than July 1, 1999.

Limited liability companies or limited liability partnerships, the number of whose participants exceeds 50 at the time of the entry into force of this Federal Law, shall be obliged, before July 1, 1999, to be transformed into joint-stock companies or production cooperatives or reduce the number of their participants up to the limit fixed by this Federal Law. In the case of the transformation of such limited liability companies or limited liability partnerships into joint-stock companies, they may be transformed into closed joint-stock companies without the restriction of the maximum numerical strength of a closed joint-stock company, fixed by the Federal Law on Joint-stock Companies. The provisions of the second and third paragraphs of Item 3 of Article 7 of the Federal Law on Joint-Stock Companies shall not be applied to the said closed joint-stock companies.

If limited liability companies or limited liability partnerships are transformed into joint-stock companies or production cooperatives in the procedure prescribed by this item, the provisions of Item 5 of Article 51 of this Federal Law shall not be applied to the latter either.

By the time the present Federal Law enters into force a Decision of the general meeting of participants in the limited liability company (limited liability partnership) on the transformation of the limited liability company (limited liability partnership) with a number of participants being more than fifty shall be made by a vote of no less than two thirds majority of participants in the limited liability company (limited liability partnership). Participants in the limited liability company (limited liability partnership) who voted against the motion on the transformation or who did not take part in the voting shall have the right to withdraw from the limited liability company (limited liability partnership) in the manner laid down in Article 26 of the present Federal Law.

The limited liability companies or limited liability partnerships which have not brought their constituent documents into conformity with the present Federal Law or have not been transformed into joint-stock companies or production cooperatives may be liquidated through legal proceedings at the demand of the body carrying out the state registration of legal entities or of other state agencies or local self-government bodies that have received the right to make such a demand on the basis of federal law.

  1. The limited liability companies or the limited liability partnerships indicated in Item 3 of this Article shall be exempted from the registration fee when they undergo the registration of the change of their legal status in connection with bringing it into conformity with the present Federal Law.
President of the Russian Federation Boris Yeltsin

The Kremlin, Moscow

February 8, 1998

No. 14-FZ