Business requests the Ministry of Economic Development to limit the rights of the minority shareholders

Large business and public officials cannot agree on how to reform the joint-stock company law in order to protect the rights of the minority shareholders and not jeopardize the operation of large companies.

Amendments to Chapter Four of the Civil Code (“Legal Entities”) entered into force on September 1^st of 2014 and endowed the minority shareholders with more opportunities to influence the company operations. This alarmed the business and in-house counsels. The Ministry of Economic Development promised to resolve all issues by elaborating special laws of JSCs and LLCs until last December. The amendments were made in the form of the draft law “On amendments to certain legal acts (in the part of ensuring compliance with the new edition of Chapter 4 of the Civil Code”) (RBC has a copy). The representative of the Ministry told RBC that the Ministry is planning to agree the draft law with the Government until the end of February and to submit it to the State Duma by spring. However, the business is not satisfied with the document <…>

Alexander Bolomatov, Partner of the Law Firm "YUST", agrees that the matter is of much importance: “Without this, it is unclear where the autonomy of a subsidiary ends. This matter cannot be left at the discretion of the court; a law is required to resolve it”.

Read the complete article here