On 08.09.2022, the President of the Russian Federation issued Decree No. 618 which established a special procedure for transactions with shares in the authorised capital of limited liability companies (“OOO”).

In particular, these are transactions resulting directly and/or indirectly in the establishment, modification or termination of rights to own, use and (or) dispose of shares in the authorised capital of OOOs or other rights allowing to determine the management conditions of such OOOs and (or) the conditions for their entrepreneurial activities.

Now, for the purposes of performing the above transactions involving persons from foreign countries who commit unfriendly acts against the Russian Federation, permits issued by the Government Commission for the Control of Foreign Investment in the Russian Federation are required and, if necessary, must contain the conditions for performing such transactions.

The new rules do not apply to entities in the financial and fuel and energy sectors.

It is expected that the procedure for issuing the above permits by the Government Commission for Control of Foreign Investment in the Russian Federation will be approved by the Russian Government within 10 days after the Decree is issued.

Earlier we informed you that on 08.09.2022 the President of the Russian Federation issued the Decree No. 618 (hereinafter referred to as “Decree”).

This Decree establishes the requirement to obtain permission fr om the Government Commission for Control of Foreign Investment in the Russian Federation (“Government Commission”) for transactions with shares in limited liability companies (“OOO”), if the parties to such transactions are persons from foreign countries that commit unfriendly acts against the Russian Federation.

On 19.09.2022 the Government of the Russian Federation issued the Resolution No. 1651 “On Amendments to Resolution No. 295 of the Government of the Russian Federation of 6 March 2022“ (the “Resolution”) that regulates the procedure for obtaining the respective approval of the Government Commission.

The list of cases wh ere the Government Commission is authorized to issue permits includes transactions resulting directly and/or indirectly in the establishment, modification or termination of rights to own, use and (or) dispose of shares in the authorised capital of OOOs or other rights allowing to determine the management conditions of such OOOs and (or) the conditions for their entrepreneurial activities.

According to the Resolution, in order to carry out the abovementioned transactions involving persons from foreign countries that commit unfriendly acts against the Russian Federation, the rules previously issued in relation to loans and credits with persons from unfriendly countries by Resolution of the Government of the Russian Federation No. 295 of 6 March 2022 will be fully applied.

It is envisaged that a permit to carry out a transaction or a group of transactions (“permit”) can be obtained by applying to the Ministry of Finance of the Russian Federation with an application and accompanying documents, the list of which is established by the Resolution of the Government of the Russian Federation No. 295 of 6 March 2022.

Please note that the Ministry of Finance of the Russian Federation can also be approached by federal executive bodies and (or) the Bank of Russia in order to issue a permit. In this case, the application and accompanying documents must be submitted to the relevant federal executive body and (or) the Bank of Russia.

The application and accompanying documents must be drawn up in Russian. If the original documents are in a foreign language, a duly certified translation into Russian (with an apostille of the competent authority of the state in which the document was drawn up) will be required.

The application and accompanying documents may be submitted both in hard copy and electronically, including in the form of electronic documents signed with a digital signature.

We will be happy to answer your questions and assist you in preparing the package of documents required to obtain the permit.

We would like to draw your attention to the recent clarifications issued by the Central Bank of Russia (hereinafter referred to as the “Central Bank”) regarding the relevant changes in legislation in accordance with the Presidential Decrees.

On 05.03.2022, Presidential Decree No. 95 “On the temporary procedure for meeting obligations to certain foreign creditors” (hereinafter referred to as Decree No. 95) was issued. Decree No. 737 of 15.09.2022 also introduces additional restrictions on payments to foreign residents – in particular, it concerns the implementation of payments to the participant in case of liquidation or reduction of shared capital (entered into force on 15.10.2022).

For which purposes it is compulsory to open a type C special account:

For payments in excess of 10 million rubles (or the equivalent in a foreign currency) per calendar month to “unfriendly” foreign counterparties, as well as to “friendly” foreign creditors, if the rights of claim on obligations passed to them fr om unfriendly foreign creditors after March 1, 2022 (Item 8 of Decree № 95) for:

• total liabilities of the debtor (including loan repayment and interest on it) on loans and borrowings, as well as payment of dividends/distribution of profits of Limited Liability Companies
• loans, borrowings, and financial instruments (including securities) of Joint Stock Companies 
• fulfillment of obligations under concluded agreements which are derivative financial instruments
• purchase of real estate fr om “unfriendly” individuals
• Disbursement of funds by residents due to reduction of shared capital, liquidation or bankruptcy proceedings of resident legal entities (or permission obtained – Decree № 737 of 15.09.2022).

Who, where and in what currency should a type C account be opened:

• A resident sends an application to a credit institution in the name of a foreign creditor for a C-type account, whereby a bank account agreement does not need to be concluded.
  A foreign creditor cannot open a C-type account on its own initiative (Letter of the Bank of Russia No. 019-12-4/2759 dated 06.04.2022).

• The C-type account is kept in rubles, is not opened in a foreign currency and cannot be opened in a foreign credit institution (clauses 3,5 of Decree No. 95).
• A bank account previously opened in the ordinary course of business will not be suitable for use as a C-type account, but depo accounts opened in the name of a foreign creditor before 24.03.2022 can be used.

When is a special account NOT needed?

• C-type accounts are not used if the aggregate amount of all debtor’s liabilities to all foreign creditors mentioned in Clause 1 of Decree No. 95 in a calendar month does not exceed 10 million rubles or its equivalent in foreign currency (at the official exchange rate of the Bank of Russia set as of the first day of the respective calendar month) or there is a permit from the Government Commission.
• If the obligation stipulated by Decree No. 95 is performed to a person who is not “unfriendly” (at the same time meeting the requirements set out in clause 12 of Decree No. 95 that the ultimate beneficiaries are the Russian Federation, its legal entities or individuals, and this information is disclosed to the tax authorities in an appropriate manner)

What is allowed when using a Type C account:

• It is possible to use a C-type account opened to a non-resident upon application of one resident for performance of obligations by other residents to the same non-resident and not to open a new C-type account.
• Transfer of funds to a non-resident to a C-type account opened with a bank different from the bank wh ere the resident is serviced.
• Transfer of rubles from a C-type account opened in favour of a non-resident legal entity of an “unfriendly” state in one credit institution to a C-type account of the same legal entity opened in another credit institution.
• There are no restrictions on residents using several C-type bank accounts for different obligations (contracts, products) in favour of one non-resident or applying one C-type account.

Limitations and specifics of the Type C account:

• Funds in the C-type account opened in the name of a foreign creditor belong to the foreign creditor from the moment the account is credited and until an agreement is concluded with the foreign creditor.
• The bank wh ere the C-type account was opened may not unilaterally close such account due to the absence of the foreign creditor’s application.
• A resident is not entitled to dispose of or request refund from a C-type bank account, except in case the funds were mistakenly credited to a C-type account. 
• Transfer by the client from a C-type bank account to another non-resident bank account (opened both in the Russian Federation and abroad) is currently not possible (without authorisation).

For which purposes money can be written off:

• payment of taxes, duties, fees and other mandatory payments payable to the budget
• transfers for the purchase of federal loan bonds
• transfers to current accounts of non-residents in the currency of the Russian Federation, as stipulated by the permit
• transfers for other transactions provided for by the permit
• payment of commissions to the authorised bank servicing the account.

Dear colleagues,

We would like to wish you a happy New Year!
May the coming year be peaceful, prosperous and successful!
Thank you for your trust and collaboration.

With deep respect,
Your team of swilar

Dear Sirs or Mesdames, 

we would like to inform you about the changes in the field of corporate law which will be important in the nearest time. 

From March 01, 2025, significant new developments made by the Federal Law dated August 08, 2024 No. 287-FZ will come into force. A number of changes relates to limited liability companies (LLC). 

So, the rules of holding general meetings of LLC participants have been amended, the related terminology has been changed. New rules will be applied, namely, while holding the annual meetings of participants according to the results of the year 2024. 

Main changes are as follows:

The expression “general meeting” has been changed to “adoption of a resolution by the general meeting” or “meeting or absentee voting for adoption of a resolution by the general meeting”.

The meeting chairman will be elected only if the company does not have a Board of Directors (Supervisory Board). If it exists, the Chairman of such Board of Directors will take chair. 

The forms of the general meeting will be as follows: 

• a meeting, possible with remote participation; 
• absentee voting, incl. by e-bulletins; 
• a meeting combined with absentee voting. 

In case of remote participation: 

• participation will be executed using electronic/technical communications; 
• a possibility is established to attend a meeting at the place of its holding or to hold a meeting without determining a place of holding;
• a possibility is established to make an online-broadcasting with access for the registered persons (upon a participant’s demand the company is obliged to provide access to the broadcasting recording). 

Additionally, the rules of holding meetings combined with absentee voting have been fixed. Such meetings may be held in the cases stipulated by the company’s articles of association or by a unanimous resolution of all the company participants. Approval of annual reports and accounting (financial) statements is admitted at such meetings.

A separate article has been introduced dedicated to drafting and contents of the minutes of an LLC general meeting. It also stipulates that signing of the minutes by the secretary of the meeting will not be required.

Furthermore, a procedure was established in relation to adopting resolutions by the Board of Directors (the supervisory authority which is formed when it is stipulated by the articles of association). This authority may adopt resolutions at meetings (including those with remote participation) or by means of absentee voting. Similarly to meetings of company’s participants, meetings of the Board of Directors will be held with the possibility of personal attendance at the place of their holding as well as without determining such place.

The quorum when adopting Board resolutions will be not less than 1/2 of the number of Board members (if the greater number is not stipulated by the articles of association). The meeting may be combined with absentee voting.

The minutes according to the results of the meeting or the absentee voting will be prepared not later than 3 calendar days after the meeting or the end of document acceptance from the Board members (in case of absentee voting).

We will be happy to answer your questions arising in connection with the specified changes.