President Dmitry Medvedev has approved the framework for reforming corporate law as prepared by the Presidential Council on the Codification of Civil Law. On Wednesday, Medvedev took part in a session of the council and initiated preparations for the corresponding bill. Committees formed by the Council have been instructed to prepare the amendments, before the middle of next year. More than 100 legal experts will be working on the project.
One of the council’s proposals was to alter a reform made in 2002. It was then that the register of incorporated organizations became unified via a computerized system, and registrars were then no longer able to examine the details of the documents and are now limited to simply verifying that companies possess them. Now the council is proposing to verify the legality of corporate decisions and transactions with stocks and equities, as well as to investigate charter documents. The lack of this examination process is enabling corporate raiding in Russia, the committee argues in the final framework.
As it will not be possible to carry out registration within the five-day period if the proposed expert review is initiated, the committee proposes introducing of standard company charters and supplements to them that will not require expert evaluation. Anton Ivanov, Head of the Supreme Arbitration Court, estimates that a minimum of 95% of Limited Liability Companies’ charters are identical anyway.