In 2013, Russia adopted the Code of Corporate Governance that was created to better establish the role and the responsibilities of directors in companies and for the better protection of the shareholders. The most employed types of Russian companies are the limited liability and the joint stock corporations. These types of companies will also have a certain management structure.
The board of directors of Russian companies will usually be formed by representatives of the shareholders and executive managers. According to the Federal Commercial Code in Russia, the number of directors in company management must be directly related to the number of shareholders and the minimum number of directors must be five.
In companies with over one thousand or ten thousands voting shareholders, the minimum number of directors must be seven, respectively nine. As far as the component members of the board of directors is concerned, the composition is strongly related to how meaningful the company is to the Russian government and the state’s involvement in shareholding structure of open joint stock companies.
According to Article 83 of the Commercial Code, Russian companies may also have independent directors. Russian independent directors may be members of the board of a company with more than one thousand voting shareholders or they can have independency in the decision-making process in companies with a smaller voting shareholders number.
Directors of Russian companies will usually have certain responsibilities they cannot delegate to other members of the management board. Among these, they are the only persons enabled to establish the annual shareholders meetings and deciding what the agenda of the meeting will be. The directors will be the only ones setting out the company’s priorities and business directions.
Directors are the ones to increase the authorized capital of the company by issuing new shares. They will also decide what the valuation property price is and will also have a decisive note in choosing the executive body of the company. Russian directors will decide the establishment of new branches and representative offices and will approve major transactions.
For complete details about the provisions of the Russian Company Law, you can contact our Russian attorneys.
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