Changes in corporate law

Belarus cancels restriction on participation of one-shareholder company in another one-shareholder company as well as limitation on number of CJSC shareholders

Introduced in 2016, the restriction on participation of a one-shareholder company in another one-shareholder company was a hurdle, including for foreign investors who were not interested in shareholding with other persons.

From entry into force of the new version of the Law on companies, this restriction is cancelled and one-shareholder companies are able to be a sole shareholder of other companies.

Moreover, closed joint-stock companies («CJSC») are able to maintain this status with any number of shareholders. This became possible due to cancellation of the restriction on the number of CJSC shareholders, which previously should not have exceeded 50.

From entry into force of the new version of the Law on companies, the number of CJSC shareholders is not limited. However, such a restriction may be established in a CJSC’s Articles of association. In that case, as before, if such a limit is exceeded, CJSC is either subject to reorganization or its type should be changed within one year. If the number of shareholders does not decrease to the limit established by the Articles of association of this CJSC after that period, CJSC is subject to liquidation in court.

A joint-stock company may change its type by a resolution of the general shareholders’ meeting adopted by a qualified majority of votes (at least three-quarters) of persons who took part in the meeting. Shareholders who voted against the resolution to change the type of joint-stock company or who were not duly notified about holding of the general shareholders’ meeting at which the resolution was adopted, have the right to demand reacquisition of their stocks.

Furthermore, at the moment shareholders agreements cannot be concluded between all shareholders. The new version of the Law on companies cancels this restriction.

These changes come into legal force from 28 April 2021.

Source: National legal Internet portal of the Republic of Belarus (NLIP) 27.01.2021, 2/2815

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