Limited liability company: CCRF vs. the LLC Law
The next amendments to the CCRF entered into force on September 1st. They have affected, inter alia, the limited liability companies (hereinafter –LLCs). In particular, several persons at once may now be appointed directors of LLCs; any decision taken by the general meeting of the company shareholders must be notarized; any non-monetary contribution must be evaluated for its monetary value. Despite all those novelties introduced to the Civil Code of Russia, the Federal Law No. 14-FZ “On limited liability companies” dated February 8 of 1998 (hereinafter – the LLC Law) suffered no changes. Due to this, certain contradictions arose between the CCRF provisions and the LLC Law. Even though the provisions of the special law are being applied insofar as it is not in contradiction with the CCRF until said law is brought into compliance with the CCRF, certain articles of the Code are practically unenforceable without additional explanations. In this article, we will about the collisions that arose between the CCRF and the LLC Law and how to overcome them during the transition period.
Managing Partner of the Law Firm "YUST" Evgeny Zhilin points out another unsolved problem: “The CCRF contains no provisions regarding the course of action, when directors take contradictory decisions on a single matter. Moreover, no specifying provisions regarding the allocation of authority between several directors acting together were introduced. The question, which of the directors will act as the chairperson of the collective executive body, should one be formed in the LLC, also remains open – the LLC Law states that the sole executive body performs the duties of the director. And if the company has two directors?” The company probably will have to elect one of them as the chairperson of the collective executive body and fix their powers in the charter.
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