THE TIME TO HOLD ANNUAL GENERAL MEETINGS

Intercomp informs that regular general meetings should be held at LLCs (an “Annual General Meeting”). Such meetings must be held periodically within the time limit as prescribed by the company’s articles of association, but at least once a year [1]. If such a meeting is not held within the time limit as prescribed by the applicable laws, the company may be charged with administrative liability.

Time Limit for Holding an Annual General Meeting

The time limit for holding an Annual General Meeting of shareholders of a company is to be approved in its articles of association. Moreover, an LLC must hold an Annual General Meeting between March 1 and April 30 inclusive [2].

Nevertheless, preparations for an Annual General Meeting should start in advance since shareholders of an LLC should be notified of the place and the time of the meeting at least 30 days before it begins. Each notice of an Annual General Meeting of an LLC should be accompanied by the company’s annual report, an controller’s opinion, and an auditor’s report on the company’s financial statements (if an audit is conducted), as well as other information about the matters on the meeting agenda, unless the company’s articles of association set out a different procedure for providing such information to the company’s shareholders [3].

Mandatory Agenda Items

The applicable laws assign to the exclusive competence of Annual General Meeting Approval of annual results of company’s work [4].

As usual, the agenda of Annual General Meeting also includes matters of distributing profits between shareholders of the LLC and of re-election of managing bodies.

Liability

Law provides for administrative liability for violation of the statutory requirements for preparing for and holding a general meeting. Companies may be subject to a fine of up to RUB 700,000 for violation of the procedures for calling, preparing for, and holding a general meeting [5].

Recommendations

Limited liability companies are recommended to:

  • Ascertain the time limits for holding an Annual General Meeting, as indicated in the Articles of Association;
  • Make sure that details of the company’s shareholders to be notified of an Annual General Meeting are up-to-date;
  • Prepare notices of an Annual General Meeting and distribute them to participants;
  • Prepare minutes of an Annual General Meeting;
  • Hold an Annual General Meeting within the prescribe term.

Intercomp specialists would be pleased to:

  • Consult on complicated matters of Annual General Meetings procedure;
  • Prepare notices and minutes of Annual General Meetings;
  • Provide complex support in preparing and holding Annual General Meetings.

This Information Bulletin is not a substitute for professional legal advice that always requires up-to-date and specific information about the client’s situation.

[ 1] Article 34 of Federal Law No. 14-FZ On Limited Liability Companies dated February 8, 1998

[ 2] Article 34(2) of Federal Law No. 14-FZ On Limited Liability Companies dated February 8, 1998

[ 3] Article 36 of Federal Law No. 14-FZ On Limited Liability Companies dated February 8, 1998

[ 4] Article 67.1 (1)(3) of the Russian Civil Code, Article 33 of Federal Law No. 14-FZ On Limited Liability Companies dated February 8, 1998

[ 5] Article 15.23.1 of the Russian Code of Administrative Offenses