On February 12, 2025, the State Duma adopted in the first reading Draft Federal Law No. 724347-8 “On Amendments to the Federal Law “On Joint Stock Companies” and Article 32 of the Federal Law “On Limited Liability Companies”.

This draft law in question contains two open lists of circumstances: for JSCs and for LLCs. Upon the occurrence of any of them, a member of Board of Directors will be considered retired, and his or her powers will be terminated.

This draft law was developed in order to clarify the circumstances, in the presence of at least one of which a member of the board of directors (supervisory board) of business entities will be considered retired. This goal is stated in the explanatory note to the draft law.

Currently, there are no such lists in the legislation (there exist only some scattered references to such circumstances in the explanations of the Supreme Court of the Russian Federation).

The lists of grounds for JSCs and LLCs provided for in the draft law in question are identical in their meanings.

It refers to the following circumstances:

·         death of a member of Board of Directors;

·         entry into force of judicial act declaring him or her as having no legal capacity, having limited legal capacity, missing or dead;

·         entry into force of judicial sentence imposing a penalty in the form of deprivation of right to hold certain positions or engage in certain activities, or a judicial sentence imposing an administrative penalty in the form of disqualification;

·         completion of procedure for sale of property or termination of bankruptcy proceedings in respect of it provided for by the Federal Law No. 127-FZ of October 26, 2002 “On Insolvency (Bankruptcy)” in the course of such a procedure, out-of-court bankruptcy proceedings;

·         receipt by company of written notification from a member of Board of Directors (Supervisory Board) of company on waiver of his powers;

·         other cases provided for by federal law.

The draft law also provides for some other amendments to the laws on JSCs and LLCs.

Moscow & Partners lawyers attentively follow all changes in order to suggest solutions that meet the interests and needs of our clients.