This is to inform you that new registration application forms, for the Uniform State Register of Legal Entities (“USRLE”), came into effect on 25th November 2020. These forms provide for new opportunities in disclosing data and information about legal entities, in the USRLE. Please see below our summary of key takeaways.

The following important information and data can now be disclosed publicly in the USRLE, by legal entities:

• {{1.}}The fact of shareholders’ agreements’ existence, entered into with respect to legal entities, including information about: (i) shareholders’ non-proportionate voting conditions; and/or (ii) restrictions on disposal of participatory interests/shares of the company, provided under a shareholders’ agreement.

• {{2.}}If two, or more, persons are entitled to act on behalf of the company without PoA (CEOs) – specification of the powers’ execution regime (namely, jointly or independently) is required.

• {{3.}}Information about a sole shareholder of a Joint Stock Company. This is an obligation provided for under Russian law.
  
  

Separately, we would like to underline the importance of the disclosure of information in the USRLE with respect to: (i) the existence of shareholders’ agreements; and (ii) execution of powers and their regime by multiple CEOs.

All information contained in the USRLE, with respect to all persons, is public. Therefore, disclosure of certain information, in the USRLE, may significantly increase a company’s / shareholders’ protections from potential unfair, or illegal, acts of third persons, when dealing with the company. This includes risks related to the illegal transfer of a company’s participatory interests or shares, illegal voting at general meetings of participants/shareholders (paragraph 6 of Article 67.2 of the Russian Civil Code), as well as transactions entered into, on behalf of the company, with violations of multiple CEOs’ power exercising regime, adopted by a company (Paragraph 1 of Article 174 of the Russian Civil Code). When dealing with these cases in Russian courts, one of the crucial conditions for declaring a transaction to be illegal is knowledge, gained by the other party about existing restrictions, applicable to the company. If relevant restrictions are detailed and publicly available in USRLE, the chances for proving necessary “knowledge” of other party about restrictions will significantly increase a company’s changes to protect its interests and its shareholders’ rights.

In addition, any action with branches and representative offices (creation, closure, change of name and address) could be carried out without changes to the Russian company's Charter. The information about branches and representative offices, that are already contained in the Charter, may be excluded therefrom.

The updated forms have been significantly redesigned, to reflect changes in Russian corporate law. These have accumulated since September 1st 2014. From November 25th 2020, all of the above and other innovations can be made and reflected in the USRLE. This may, among other things, raise the awareness of third parties in their cooperation with the company, and mitigate potential risks of unfair behavior of counterparties, in concluding transactions with the company and its property.

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Practice: Corporate and M&A

Note: Please be aware that all information provided in this letter was taken from open sources. Neither ALRUD Law Firm, nor the author of this letter bear any liability for consequences of any decisions made in reliance upon this information.