On 30 December 2008 the Russian State Duma adopted Federal Law No. 312-FZ "On Amendments to Part I of the Civil Code of the Russian Federation and certain legal acts" (the Law 312-FZ). The amendments introduced by the Law 312-FZ mostly affect the corporate regime governing Russian limited liabilities companies (the Companies).
The Law 312-FZ will come into force on 1 July 2009. By 1 January 2010 the Companies are required to amend their charters to be in compliance with the requirements established by the Law 312-FZ.
This legal update provides an overview of key changes introduced by the Law 312-FZ to Federal Law No. 14- FZ "On Limited Liability Companies", dated 8 February 1998 (the LLC Law) in part of the amendments to the perfection of pledge of a participatory interest.
Information on participants and participatory interest
Under the current LLC Law information on participants is set out in the Companies' charter.
According to the Law 312-FZ, the Companies themselves shall be obliged to keep an official list of participants and their participatory interest in the Companies, which will be regarded as the Companies' registrar (the Company Register). The Companies must ensure they keep the Company Register in compliance with the requirements of the Law 312-FZ from the time of the Companies' state registration.
The information on the amount and nominal value of the participatory interest of each participant in the Companies shall be submitted to the Unified State Register of Legal Entities as well (the State Register) and shall be publicly available.
Information on any encumbrances of the participatory interest shall be recorded in both the State Register and the Company Register. In case of any discrepancies between records in the State Register and the Company Register, the State Register data shall prevail.
The participants are required to update the Companies on any changes in their personal data (name, place of residence or location), as well as in the data relating to the participatory interest.
Pledge of participatory interest
Under the current LLC Law pledge of participatory interest is not subject to registration and there is no system for recording pledged participatory interests.
The Law 312-FZ states that transactions involving alienation or pledge of a participatory interest shall be notarised. The transfer of rights to a pledged participatory interest shall be effective from the moment of notarial certification.
Within three days after the date of notarisation of the agreement on pledge of participatory interest, the notary (who has notarised the transaction) shall be required to submit an application signed by the pledgor to the State Register requesting the State Register to register the pledge of participatory interest.
Within three days after receiving the application submitted by the notary, the State Register shall record the pledge of participatory interest in the Companies with the State Register. This information shall be publicly available.
The notary shall be required to provide the Companies, that are pledging their participatory interest, with a copy of the application submitted to the State Register together with a copy of the agreement on pledge of participatory interest.
The new provisions of the LLC Law will come into force on 1 July 2009.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
