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Legal briefing notes

The compulsory disclosure of information of a stock company

The opportunities of a shareholder agreement

For shareholders to be able to protect their interests and fully exercise their rights, they are able to conclude shareholder agreements. This right is established both by the Civil Code (Article 67.2) and by the Federal Law “On Joint Stock Companies”. According to Article 32.1 of the Federal Law “On Joint Stock Companies”, a shareholder agreement is an agreement on the exercise of rights certified by the shares, and (or) on the specifics of the exercise of rights to shares. Meanwhile, the shareholder agreement may force the parties to the shareholder agreement to exercise their rights in a certain way or refuse to exercise such rights, for example:

  • force the parties to vote in a certain way at the general meeting of shareholders, agree on the voting option with other shareholders;
  • determine the price and (or) certain circumstances under which shareholders should purchase/sell shares, refrain (refuse) from the disposal of shares until the certain circumstances to take other actions coherently that are related to the management of the company, its activities, reorganization or liquidation.
  • Requirements for the shareholder agreement and features of its conclusion

    As to any document that defines the rights of the parties, there are special requirements for a shareholder agreement. The shareholder agreement is concluded in writing in the form of a single document that is signed by the parties. Meanwhile, the subject of the shareholder agreement cannot include the obligations of the party to the shareholder agreement to vote according to the instructions of the company's regulatory institutions with respect to the shares of this agreement is concluded. Moreover, the parties cannot change the peremptorily defined norms. For example, a shareholder agreement cannot determine the procedure for paying dividends because the rules providing for it are imperative (Article 42 of the Federal Law “On Joint Stock Companies”). One of the important features of the shareholder agreement is the obligation of its parties to notify the company of the fact of its conclusion. Such notification should be made no later than 15 days from the date of conclusion of the shareholder agreement and in some cases within 5 days (clause 5, article 32.1 of the Federal Law “On Joint-Stock Companies”). Failure to comply with that obligation may result in the recovery of damages from the shareholders who are parties to the shareholder agreement. The shareholder agreement is binding only on its parties. When concluding a shareholder agreement, a shareholder must realize that the consequences of its violation can be quite serious. An important section of the shareholder agreement is the section on the responsibility of shareholders for violation of its provisions. For example, these could be heavy fines or provided obligation to sell some of their shares in case of violation of such an agreement. Meanwhile, a contract concluded by a party to a shareholder agreement in violation of the shareholder agreement may be declared invalid by a court at the claim of the interested party to the shareholder agreement.

    Binding internal documents of AO

    What do the internal documents of AO include?

    A closed list of internal documents of AO is not established by law. Meanwhile, according to the Federal Law "On joint-stock companies”, it can be concluded that these include:

    • charter of the joint-stock company with all changes/additions;
    • provision on the procedure for preparing and holding a general meeting of shareholders;
    • provision on the procedure for convening and holding meetings of the board of directors;
    • provision on the procedure for convening and holding meetings of the collegial executive body;
    • regulation on the audit commission.

    The documents that are mentioned above are accepted in each joint-stock company. But it is even more than that the internal documents of the AO can regulate other matters of the company's activities: dividends, the procedure for the work of the counting commission, information policy, corporate governance code, etc.

    The procedure of the adoption of internal documents of AO

    According to paragraph 19 of article 48 of the Federal Law “On Joint Stock Companies”, approval of internal documents that are regulating the activities of the company's bodies offenders to the competence of the general meeting of shareholders. Accordingly, internal documents that do not regulate the activities of the company's bodies can be adopted both by the board of directors and by the sole executive body and the collegial executive body. To clearly define the competence and avoid the adoption of conflicting internal documents, the charter or provisions on bodies should indicate which documents can be adopted by the board of directors and which by the collegial executive body. At the time of dealing with the issue of approving the internal document, it is necessary to prepare its draft. During sessions of the meeting, participants can propose their own changes that will be included in the final version of the internal document. The most difficult in the order of adoption is the charter of a joint-stock company since, after approval by the general meeting, it must still be registered with the tax authority. The rest of the documents do not require additional bureaucratic procedures, resulting in which both their adoption and amendment are much faster. Determining the procedure for the activities of a joint-stock company, internal documents give the right to the shareholders to regulate certain issues of the existence of the company, depending on their interests, therefore an irresponsible attitude to the content of internal documents is leading to difficulties in protecting shareholders.

    The advantages of working with us

    Working with the specialists of the Tsentralny Okrug Law firm gives lots of opportunities:

    • Consultations of specialists and free rapid assessment of possible options to of conclusion of shareholder agreement and provisions of internal documents of AO;
    • Full accompaniment of the procedure of conclusion of shareholder agreement and adoption of internal documents of AO;
    • Money-back guarantee in case of the results will not be achieved;
    • Efficient and responsible case management (47 completed projects during the last year).

    Due to our vast experience and successful practice in the area of corporate law, the specialists of the Tsentralny Okrug Law Firm quickly and efficiently prepare shareholder agreement and internal documents of AO.

    Author is Stanislav Valezhnikov

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