Long-awaited amendments to the company law

Belarus: From 26 January 2016, establishment of companies with one shareholder/member is possible in Belarus

The Law of the Republic of Belarus of 15.07.2015 no 308-L significantly amends the company law.

The most important change is the possibility to establish a one-member company in form of joint stock companies and limited liability companies (or additional liability companies). Either a natural person or a legal entity will be able to be the founder. However, if the only member of the company is a legal entity, it has to have at least two shareholders itself. Administrative bodies of the one-shareholder company remain unchanged. At the same time, the powers and authority of the general meeting of shareholders will be exercised by the only shareholder. The decision to establish a company is taken by the shareholder in written form without holding a founding meeting. Obligatory requirements for the content of the decision are stated in the legislation.

Another important change in legislation is the possibility to conclude a shareholders’ agreement (an agreement on exercise of shareholders’ rights). Shareholders’ agreements, which are well known in European corporate practice, represent an efficient legal instrument which helps shareholders to agree on practical issues in respect of company operations: for example, voting on particular issues in a certain way, acquisition or sale of shares at a price given in advance or when particular circumstances arise, exercise of rights in a certain way or refraining from exercising them. At the same time, the company itself cannot be a party to such an agreement. The shareholders who conclude a shareholders’ agreement must inform the company.

The law also makes other changes to corporate relations on the decision making procedure regarding increase of statutory funds, powers of the executive body and the committee of directors, contracts with affiliated persons, and audit procedure.

Economic entities in the form of joint stock companies and limited liability companies are required to bring their statutes into line with the new law. This must take place during the first amendment to the statutes after entry into force of the law (after 26 January 2016). Until amendment, the statutes are effective only to the extent that does not contradict the new law. Therefore, we recommend updating incorporation documents reasonably in advance.

For more information, please follow the link.

Source: National legal Internet portal of the Republic of Belarus (NLIP) 25.07.2015, 2/2306

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