Approval of the Council of the Great Patriotic War is legion. Approval of major transactions by shareholders and participants of companies: where violations are possible. Class Order Missions

In practice, situations often arise when subsequent approval of a major transaction or a transaction in which there is an interest is required (that is, at the time the transaction was concluded, the corresponding decision was not made by the general meeting or the board of directors). Is this possible? Is Article 183 of the Civil Code of the Russian Federation applicable to legal relations related to the conclusion of a major transaction if the procedure for its completion is violated? Is a body of a legal entity its representative? There are no clarifications from the Supreme Arbitration Court of the Russian Federation on these issues. What should I do?

According to Art. 45, 46 of the Federal Law of 02/08/98 No. 14-FZ “On Limited Liability Companies (hereinafter referred to as the LLC Law) and Art. 78, 79, 81 of the Federal Law of December 26, 1995 No. 208-FZ “On Joint-Stock Companies” (hereinafter referred to as the JSC Law), making decisions on transactions falls within the competence of the general meeting of participants or the board of directors elected by decision of the participants. It is obvious that the restrictions regarding the procedure for completing this transaction are established solely in the interests of the participants (shareholders) of the company.

In accordance with paragraph 5 of Art. 45, paragraph 5, art. 46 of the LLC Law, as well as paragraph 6 of Art. 79, paragraph 1, art. 84 of the Law on JSC, a transaction in which there is an interest, as well as a major transaction made in violation of the requirements provided for by these laws, may be declared invalid at the claim of the company or its participant (shareholder). Thus, these transactions are voidable and not void if they are made in violation of the established procedure (without an appropriate decision of the board of directors or general meeting) or violate the rights of company participants.

These laws do not contain any indication of the possibility of subsequent approval of such transactions by a decision of the company's participants (board of directors). The only way to believe that a voidable transaction made in violation of the law can be approved in the future is the application of the provisions of Art. 183 Civil Code of the Russian Federation. Thus, in the absence of authority to act on behalf of another person or in excess of the specified authority, a transaction is considered to be concluded on behalf and in the interests of the person who completed it, unless another person (represented) subsequently directly approves this transaction.

Subsequent approval of the transaction by the represented creates, changes and terminates for him civil rights and obligations under this transaction from the moment of its completion. It would seem that there is every reason to believe that by completing a transaction without a corresponding decision of the meeting (board of directors), the director or a person acting on his behalf by proxy has exceeded his powers, therefore Art. 183 Civil Code of the Russian Federation.

Dilemma

In judicial practice, a number of questions arise, for example: is the general director (a body of a legal entity) a representative of this legal entity; Are the provisions of Art. applicable to him in this case? 183 Civil Code of the Russian Federation?

The Information Letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated October 23, 2000 No. 57 “On some issues in the practice of applying Article 183 of the Civil Code of the Russian Federation” (hereinafter referred to as Information Letter No. 57) states that in cases of abuse of power by a body of a legal entity (Article 53 of the Civil Code of the Russian Federation) when concluding transaction clause 1 art. 183 of the Civil Code of the Russian Federation cannot be applied.

In this case, depending on the circumstances of a particular case, the court must be guided by Art. 168, 174 of the Civil Code of the Russian Federation, taking into account the provisions of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated May 14, 1998 No. 9 “On some issues of the practice of applying Article 174 of the Civil Code of the Russian Federation” (hereinafter referred to as Resolution No. 9). From information letter No. 57 it is impossible to determine why paragraph 1 of Art. 183 of the Civil Code of the Russian Federation cannot be applied when a body of a legal entity exceeds its powers, since there is no justification.

However, it can be assumed that the answer to the question of whether a body of a legal entity is its representative is reflected in the legislation of the Russian Federation. So, according to Art. 53 of the Civil Code of the Russian Federation, a legal entity acquires civil rights and assumes civil responsibilities through its bodies acting in accordance with the law, other legal acts and constituent documents.

According to Art. 153, 154, 160 of the Civil Code of the Russian Federation, transactions recognize the actions of citizens and legal entities aimed at establishing, changing or terminating civil rights and obligations. To conclude a transaction, it is necessary to express the agreed will of the parties. A transaction in writing must be concluded by drawing up a document expressing its contents, signed by the persons entering into the transaction or duly authorized.

According to paragraph 3 of Art. 53 of the Civil Code of the Russian Federation, the body of the legal entity acts on its behalf and acts in the interests of the represented legal entity, and in accordance with paragraph 1 of Art. 182 of the Civil Code of the Russian Federation, a representative makes transactions on behalf of the represented person. In both cases, the legislator speaks of actions on behalf and in the interests of the represented person. Thus, the body of the legal entity performs the functions of a representative in relations with third parties.

The performance of these functions is based on the law, therefore the body of the legal entity (director) acts without a power of attorney. Accordingly, the rules on representation must be applied to relations involving an organ of a legal entity.

In accordance with Part 3 of Art. 40 of the LLC Law, the sole executive body of the company:

acts on behalf of the company without a power of attorney, including representing its interests and making transactions;
issues powers of attorney for the right of representation on behalf of the company, including with the right of substitution.

Thus, he “represents” the company and issues powers of attorney for the right of representation.

In accordance with Art. 69 of the Law on JSC, the sole executive body, without a power of attorney, acts on behalf of the company, including representing its interests. The question arises: does the sole executive body have the right to represent the interests of society and not be considered as its representative?

please note

According to Art. 182 of the Civil Code of the Russian Federation, a transaction made by a representative by virtue of authority based on a power of attorney, as well as instructions of the law, changes and terminates the civil rights and obligations of the represented person. Thus, if a transaction was made by an unauthorized person or a person who exceeded his authority, this means a gross violation of these legal requirements.

Void or voidable?

According to Art. 168 of the Civil Code of the Russian Federation, a transaction that does not comply with the requirements of the law and other legal acts is void unless the law establishes that such a transaction is contestable or does not provide for other grounds for violation. If we assume that Art. 183 of the Civil Code of the Russian Federation does not apply when the sole executive body of a legal entity who is not its representative exceeds its powers, then the only article regulating its actions remains Art. 174 Civil Code of the Russian Federation. By virtue of this provision, a transaction may be declared invalid if the powers of the sole executive body established by the constituent documents contradict the law.

please note

When making a major transaction or an interested party transaction, the general director is limited not by the constituent documents, but by the law and, thus, Art. 174 of the Civil Code of the Russian Federation cannot be applied to these legal relations.

The Presidium of the Supreme Arbitration Court of the Russian Federation recommended that in cases of abuse of power by a body of a legal entity (Article 53 of the Civil Code of the Russian Federation), depending on the circumstances of the case, one should be guided by Art. 168, 174 of the Civil Code of the Russian Federation, taking into account the provisions of Resolution No. 9 (clause 2 of information letter No. 57).

In this resolution, when the sole executive bodies of legal entities exercise powers to carry out transactions, special attention is paid to the fact that Art. 174 of the Civil Code of the Russian Federation does not apply in cases where these persons acted in excess of their powers established by law.

In these cases, Art. 168 Civil Code of the Russian Federation. It is obvious that cases related to violation of the procedure for carrying out major transactions and interested party transactions cannot be classified as cases where the powers of the body are limited by the constituent documents, since they are limited by law. Thus, Art. 174 of the Civil Code of the Russian Federation cannot be applied based on the circumstances of such cases (as indicated in information letter No. 57). In this case, it remains to be guided only by the norms of Art. 168 Civil Code of the Russian Federation.

In relation to large transactions and interested party transactions, as stated above, the law directly provides for their contestability.

The refusal in itself to apply Art. 183 of the Civil Code of the Russian Federation regarding legal relations related to abuse of power by the general director, does not prevent the interested party from recognizing the transaction as invalid as not complying with the law (on the grounds of nullity or contestability).

please note

Refusing to apply Art. 183 of the Civil Code of the Russian Federation to legal relations that arise as a result of abuse of power when the director concludes large transactions and interested-party transactions (apparently without recognizing him as a representative of the company), the question arises: can such transactions be approved subsequently?

This discussion negatively affects the development of a unified law enforcement practice and does not contribute to the stability of economic turnover.

Thus, if a representative of the general director, by proxy, makes a major transaction or a transaction in which there is an interest, the question of the possibility of its subsequent approval should not arise, since all the signs of Art. 183 Civil Code of the Russian Federation:

the transaction was completed by a representative under a power of attorney;
the representative exceeded his authority, since the decision of the meeting (board of directors) to complete the transaction was not adopted.

If such a transaction is made by the director and the provisions of Art. 183 of the Civil Code of the Russian Federation will not be applied (information letter No. 57), there is room for discussion - can such a transaction be approved in the future?

Deal with deferment

The fact that a sole executive body cannot act as a representative of a legal entity is confirmed by judicial practice (Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated January 10, 2003 No. 6498/02). Thus, based on the court case, despite the fact that the transaction was carried out by the chief accountant who acted on behalf of the general director and forged his signature (that is, acted without authority), the Supreme Arbitration Court of the Russian Federation considered it possible not to apply either Art. 174, nor Art. 183 Civil Code of the Russian Federation. A more logical argument was used by the Federal Antimonopoly Service of the Moscow District (resolution No. KG-A40/2495-04 dated April 16, 2004), pointing out that the chairman of the board of the company is its representative and the law on representation is applicable to him (Article 182 of the Civil Code of the Russian Federation).

The same argument in support of the argument that the general director is a representative of the company was expressed by the Supreme Arbitration Court of the Russian Federation in paragraph 13 of the information letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated April 21, 1998 No. 33 “Review of the practice of resolving disputes on transactions related to the placement and circulation of shares.” The court pointed out the following. The shareholder organization filed a claim to invalidate the agreement for the purchase and sale of shares concluded on its behalf by a representative who had a power of attorney with the joint-stock company that issued these securities.

The plaintiff substantiated his claims by the fact that the representative, when carrying out the transaction, acted to the detriment of the interests of the principal and in violation of the law, and therefore the shares were sold at a price significantly lower than the market price. There was also a violation of the law on the part of the buyer - the company, which acquired the shares issued by it from the shareholder without fulfilling the requirements of the Law on JSC. When checking the case materials, it was established that the representative of the plaintiff, who entered into the purchase and sale agreement under the latter’s power of attorney, was at the same time the general director of the company whose shares were the subject of the transaction.

In accordance with paragraph 3 of Art. 182 of the Civil Code of the Russian Federation, a representative cannot make transactions on behalf of the represented person in relation to another person, whose representative he is also. The general director of the joint-stock company violated this requirement because he entered into an agreement on behalf of the plaintiff in favor of the company, the executive body of which he was and on whose behalf he made transactions due to his position. Under these conditions, the contract concluded by him on the basis of Art. 168 of the Civil Code of the Russian Federation is void.

please note

This information letter of the Supreme Arbitration Court of the Russian Federation clearly confirms the fact that the general director of the company is its representative, that is, by force of law and directly indicated in the charter, the interests of the company without a power of attorney.

The Presidium of the Supreme Arbitration Court of the Russian Federation took the opposite position (Resolution No. 6113/02 dated October 8, 2002), according to which the bodies of a legal entity cannot be considered as independent subjects of civil legal relations (Article 53 of the Civil Code of the Russian Federation). When concluding transactions, clause 1 of Art. 183 of the Civil Code of the Russian Federation cannot be applied.

By refusing the possibility of subsequent approval of a major transaction or an interested party transaction concluded by the general director in excess of authority, that is, without applying Art. 183 of the Civil Code of the Russian Federation (the right not to apply Part 1 of Article 183 of the Civil Code of the Russian Federation in this case was granted to the courts by information letter No. 57), the court thereby creates an ambiguous situation.

If the transaction had been carried out by a representative under a power of attorney, then the possibility of subsequent approval should not have caused a dispute. However, if it is committed by the general director of Art. 183 of the Civil Code of the Russian Federation no longer applies, based on the provisions of information letter No. 57.

The situation becomes more difficult if we turn to the content of the resolutions of the Plenum of the Supreme Arbitration Court of the Russian Federation. Thus, according to paragraph 20 of Resolution No. 90/14 dated 09.12.99 “On some issues of application of the Federal Law “On Limited Liability Companies””, a transaction in which there is an interest, or a major transaction concluded on behalf of the company by the general director or an authorized them by a person in violation of the requirements provided for in Art. 45, 46 of the LLC Law (that is, with excess of power in the absence of a decision of the meeting of participants or the board of directors), is contestable and can be declared invalid by the court at the request of the company or its participant.

If by the time such a claim is considered by the general meeting of participants (in appropriate cases, the board of directors of the company), a decision is made to approve the transaction, the claim to declare it invalid is not subject to satisfaction.

According to paragraph 1 of Art. 83 of the Law on JSC, a transaction in which there is an interest must be approved before it is completed by the board of directors of the company or the general meeting. A similar provision is contained in paragraph 34 of the Resolution of the Plenum of the Supreme Arbitration Court dated November 18, 2003 No. 19 “On some issues of application of the Federal Law “On Joint Stock Companies”. Thus, the possibility of subsequent approval for interested party transactions is not provided.

Major transactions in accordance with clause 6 of Art. 79 of the Law on JSCs can be approved after their commission, however, such practice, it seems, can be applied in exceptional cases. At the same time, such a practice of making transactions on an ongoing basis cannot meet the interests of shareholders and society.

If a major transaction is carried out by the general director of a joint-stock company or his authorized person, in the absence of a decision of the board of directors (supervisory board) or the general meeting, it is invalid. However, such a transaction may be recognized by the court as having legal force and creating rights and obligations arising from it for the company if, during the consideration of the dispute, it is established that the transaction was subsequently approved by the board of directors (supervisory board) or the general meeting.

At the same time, the Federal Financial Markets Service of Russia recommends that joint-stock companies approve all major transactions before they are completed. After all, the absence of preliminary approval makes the transaction voidable, which creates the risk of recognizing it as invalid and creates instability in the relations of society with counterparties. This is indicated in paragraph 1.2 of Chapter. 6 of the Code of Corporate Conduct dated 04/05/2002, the provisions of which the state regulator recommends that all joint-stock companies established in Russia be guided by (Order of the Federal Securities Commission of Russia dated 04/04/2002 No. 421/r).

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Most transactions concluded by general directors of joint stock companies (hereinafter referred to as JSCs) do not require approval from higher management bodies. However, Federal Law No. 208-FZ of December 26, 1995 “On Joint-Stock Companies” (hereinafter referred to as the JSC Law) provides for certain cases when, in order to complete a transaction, prior consent or subsequent approval must be obtained.

It is necessary to take into account that the subsequent approval of a transaction, although it is an acceptable action in a number of cases, from the point of view of proper and effective management of the joint-stock company carries the risks of further complications in the organization’s activities, mainly in terms of the implementation of a transaction that was not previously approved. The consequences of disapproving transactions will be discussed in more detail below.

Cases when the approval of a transaction is mandatory are expressly provided for by the Law on JSC, however, its provisions do not exclude the possibility of including issues of approval and other transactions within the competence of some management bodies.

Which transactions require regulatory approval

Transactions that require approval by the board of directors or even the general meeting of shareholders by virtue of the direct instructions of the Law on JSC include major transactions and interested party transactions (hereinafter referred to as extraordinary transactions). In addition to the above, we can distinguish a number of transactions, the approval of which is implied when the management bodies resolve other issues within their competence (hereinafter referred to as agreed transactions). An example is the issue of participation and termination of participation of a joint-stock company in other organizations.

“Participation” in the context of this provision refers to cases of establishing a new organization, as well as the initial acquisition of such “participation”, for example, through a stock purchase/sale agreement (see, for example, Resolution of the Federal Antimonopoly Service of the Ural District dated March 22, 2007 No. F09-1845/07-C6 in case No. A60-20888/2006; Resolution of the Federal Antimonopoly Service of the Ural District dated March 20, 2007 No. F09-1697/07-C6 in case No. A60-21911/2006-C6, A60-28821/2006-C9).

“Cessation of participation,” in turn, implies withdrawal from the membership of the organization by alienation of shares/shares or in another form, but provided that such withdrawal is carried out at the will of the joint-stock company (see, for example, Resolution of the Federal Antimonopoly Service of the Moscow District dated February 21, 2011 No. KG-A40/16441-10 in case No. A40-38267/10-81-326; Resolution of the Federal Antimonopoly Service of the Far Eastern District dated July 3, 2007 No. F03-A51/07-1/1566 in case No. A51-19021/ 04-32-348/7).

It is necessary to take into account that a change in the share of participation in the organization, if there is no termination of participation, should not be approved by the management bodies (see, for example, Determination of the Supreme Arbitration Court of the Russian Federation dated November 8, 2010 No. VAS-12651/10 in case No. A51-5706 /2009, Determination of the Supreme Arbitration Court of the Russian Federation dated June 22, 2010 No. VAS-7367/10 in case No. A51-19035/2009).

From the above example, we can conclude that a transaction for the acquisition of shares/shares in another organization, while not being an independent subject of consideration by management bodies, nevertheless cannot be implemented without its prior approval by the board of directors, except in the case where a decision on participation or termination of participation in other organizations is directly within the competence of its executive body by the company's charter.

We note that such a transaction, made without the approval of the management body of the joint-stock company, may be declared invalid in court. At the same time, if the management body establishes any parameters for such a transaction (for example, the price of alienation of shares), then failure by the general director to fulfill such conditions cannot be grounds for declaring the transaction invalid. A different situation arises if the JSC, on its own initiative, places in its charter the issue of approving transactions for participation/termination of participation in other business companies, including the conditions for making such transactions, within the competence of the board of directors.

Along with this case, the Law on JSC contains other examples of agreed upon transactions, including: the acquisition of shares, bonds and other securities placed by the company in cases provided for by the Law on JSC (subparagraph 8 of paragraph 1 of Article 65 of the Law on JSC); approval of the terms of the agreement with the registrar of the company, as well as termination of the agreement with him (subparagraph 17 of paragraph 1 of Article 65 of the Law on JSC), etc.

Transaction approval procedure

The main difference between the approval of consensual transactions and the approval of extraordinary transactions is the voting procedure. The JSC Law provides for a special procedure for extraordinary transactions, different from the general procedure for making decisions by the management bodies of a joint stock company.

The criterion for determining a major transaction is the percentage of the value of the property being acquired or disposed ofproperty (rights) to the book value of the company's assets. If the specified ratio is 25 percent or more, then such a transaction is considered large. In this case, to calculate this value, both a single transaction and several interrelated ones can be taken into account. However, the transaction will not be major if it is carried out as part of the organization’s normal business activities (transactions that are conditioned by the constancy of their completion in connection with the ongoing business activity, for example, transactions for the purchase of raw materials and supplies , transactions aimed at carrying out the main activity , transactions for the sale of finished products etc.).

Transactions carried out as part of ordinary business activities are designated by the legislator as an exception in order to prevent the occurrence of adverse consequences for the business activities of the organization associated with delays in the fulfillment of obligations under transactions due to the need to comply with approval procedures.

However, in accordance with paragraph 1 of Article 78 of the Law on JSC, the organization’s charter may determine other cases when the approval of a transaction occurs in accordance with the procedure provided for large transactions. This means that a number of transactions that meet the size criteria, but are carried out as part of ordinary business activities, can be classified as approved by the charter (for example, contracts for the supply of a certain type of product or the purchase of a certain type of raw material).

Depending on the size, large transactions have different approval procedures. A deal ranging from 25 to 50 percent must be approved unanimously by the board of directors. If unanimity is not reached, the transaction may be submitted to the general meeting of shareholders and approved by a majority vote. If the size of the transaction exceeds 50 percent, the transaction is always approved by the general meeting of shareholders with a three-quarters majority vote. Changing the number of votes required to make a decision in the charter of a joint-stock company is not allowed.

In contrast to large ones, the basis for identifying interested party transactions is the characteristics of the parties to the transaction, namely the likelihood of a conflict between the interests of persons who can determine the fate of the transaction and the interests of the organization itself. The Law on JSC sufficiently formalizes the grounds for interest in a transaction, designating the circle of persons in respect of whom there may potentially be an assumption of interest, and the actual situations where interest occurs.

The JSC Law directly stipulates that an interested party transaction must be approved by the general meeting of shareholders if the size of the transaction is 2 percent or more of the value of the JSC assets (clause 4 of Article 83 of the JSC Law). This provision also provides for other cases similar to the above, but related to the placement of JSC shares.

The procedure for approving interested party transactions is somewhat different from the procedure established for major transactions. In a joint stock company with less than 1,000 voting shareholders, an interested party transaction is approved by a majority vote of disinterested members of the board of directors. However, in a situation where the number of disinterested members of the board of directors is not sufficient to form a quorum at a meeting of the board of directors, an interested party transaction may be submitted to the general meeting of shareholders, in which case it is approved by a majority vote of disinterested shareholders.

In a joint stock company where the number of owners of voting shares exceeds 1000, approval of the transaction occurs by a majority vote of the members of the board of directors, but in this case, disinterested directors must also be independent ; otherwise (if all members of the board of directors are interested or there are no independent members of the board of directors), the transaction is approved in accordance with the above procedure by the general meeting shareholders.

Like major transactions, interested party transactions are subject to the ordinary course of business exception, but only if such transactions were completed before the person became an interested party and only for the period until the next annual general meeting of shareholders.

It must be taken into account that in the case where a transaction is both large and a transaction in which there is an interest, in accordance with paragraph 5 of Article 79 of the JSC Law, such a transaction must be approved as an interested party transaction.

Challenging transactions made without prior approval

In terms of the consequences of non-compliance with the approval procedure, negotiated transactions and extraordinary transactions also differ. Due to amendments to civil legislation regarding the invalidity of transactions, there is currently legal uncertainty regarding the issue of challenging transactions of legal entities. Previously, in judicial practice, there were cases where agreed upon transactions were declared invalid as void under Article 168 of the Civil Code of the Russian Federation (see, for example, Resolution of the Federal Antimonopoly Service of the West Siberian District dated October 28, 2013 in case No. A46-2039/2013; Resolution of the Federal Antimonopoly Service of the Moscow District dated 01.09 .2008 No. KG-A40/8049-08 in case No. A40-67107/07-100-523) or as contestable under Article 174 of the Civil Code of the Russian Federation (see, for example, Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated April 27, 2010 No. 18067/09 in case No. A73-14361/2008).

With the introduction of Article 173.1 into the Civil Code of the Russian Federation, all unapproved negotiated transactions must be contested on the basis that the consent of the body of the legal entity was not obtained for their execution. However, it is difficult to establish the circle of persons who have the right to claim under Article 173.1, since it contains a reference only to the person who has the right to give such consent, and other persons named in the law. Since a body of a legal entity cannot make such claims, and a shareholder or a member of the board of directors is not named in the law as persons having the right to sue, the question of who is the appropriate plaintiff under this article remains at the discretion of judicial practice. At the same time, according to this article, a transaction cannot be challenged if the lack of consent does not give rise to legal consequences for the person. Considering that the management structure of a joint stock company includes different management bodies, the consequences for them will be different, and in some cases may be absent altogether, which in itself leads to the impossibility of satisfying such a requirement.

Simultaneously with the introduction of Article 173.1, Article 168 of the Civil Code of the Russian Federation was amended. The current wording of the article suggests that in a case similar to Article 173.1, the transaction can be challenged on the grounds of contradiction to the Law on JSC (clause 1 of Article 168).

With regard to challenging extraordinary transactions, the JSC Law provides for special regulation in comparison with the norms of the Civil Code of the Russian Federation, therefore, in this case the above provisions are not applicable.

By virtue of the direct instructions of the Law on JSC, shareholders, along with the JSC, are the proper plaintiffs in claims challenging extraordinary transactions. However, there is an exception to this rule in the context of the possibility described above to provide in the charter for transactions that are approved as major transactions. According to paragraph 30 of Resolution No. 19, such transactions are contested in accordance with Article 174 of the Civil Code of the Russian Federation, and the person entitled to file a claim to contest is the JSC. This instruction is supported by the currently prepared draft Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation “On some issues related to challenging major transactions and interested party transactions” exclusively in terms of applying the grounds provided for in paragraph 1 of Article 174 of the Civil Code of the Russian Federation. This project expands the approach to identifying persons in whose interests restrictions are established in the constituent documents of an organization under Article 174 of the Civil Code of the Russian Federation. Along with a legal entity, it is proposed to include its participants as such persons. A similar approach will be applicable to all transactions contested under Article 174 of the Civil Code of the Russian Federation.

When challenging any transactions that require the approval of management authorities, it is necessary to take into account that there may be two types of violations:

(i) no approval decision has been made;

(ii) the decision was made in violation of the approval procedure.

In the first case, challenging the transaction itself is sufficient. In the second, the decision must be declared invalid together with a challenge to the transaction, since the invalidity of the decision does not entail the invalidity of the transaction.

Expanding the competence of the management bodies of a joint stock company for the preliminary approval of transactions

The issue of transactions not provided for by the Law onJSC, but additionally included in the competence of the management bodies by the charter of the joint-stock company.

First of all, it is necessary to determine the competence of which management bodies may include additional issues, including issues of approval of transactions.

By the imperative instruction of subclause 20 of clause 1 of Article 28 of the Law on JSC, the competence of the general meeting of shareholders is limited only to those issues that are named in the Law on JSC and cannot be expanded.

The situation is different with the competence of the board of directors: in accordance with the wording of subclause 18 of clause 1 of Article 65 of the Law on JSC, the board of directors has competence with respect to issues named in the Law on JSC, as well as issues that were included in the charter of the JSC in excess of those provided for by the Law, for example, at the initiative of JSC shareholders. Specifiedthe position is also confirmed by judicial practice (see, for example, the Determination of the Supreme Arbitration Court of the Russian Federation dated August 24, 2009 No. VAS-5744/09 in case No. A40-1937/08-131-23; Resolution of the Federal Antimonopoly Service of the Ural District dated August 29, 2005 No. F09-2427/05-C5 in case No. A47-13068/04).

The organizational structure of the company's management bodies may include a collegial executive body (hereinafter referred to as the board), the competence of which can be determined through the residual competence of the general director. The board is not a mandatory management body, so its creation must be justified from the point of view of management efficiency. The fundamental difference between the board of directors and the board of directors is determined by the fact that the board is a permanent body involved in the current activities of the organization, and therefore can actually resolve private issues of economic activity. In turn, the board of directors is formed from invited managers, whose understanding of current activities is formed largely on the basis of the documents provided for the meeting and their general professional experience.

In terms of the validity of including additional transactions/issues within the competence of management bodies, it is necessary to be guided by the specifics of the organization and its activities, since in each specific situation the list of transactions requiring qualified verification and approval may vary. However, such transactions will be subject to the same rules as agreed upon transactions in terms of approval, provided that they are not at the same time extraordinary. However, such transactions are disputed exclusively according to the rules of Article 174 of the Civil Code of the Russian Federation, while according to this article of the Civil Code of the Russian Federation, a mandatory condition for the invalidity of a transaction is the knowledge of the counterparty of the need for its approval.

Despite the above-mentioned need to correlate transactions included in the charter with private factors, based on an analysis of the charters and internal regulations of the largest Russian companies in the public and private sector (for example, EuroChem, Gazprom, Russian Railways, MTS), the author proposes to identify general categories relevant for most organizations, regardless of the specifics of their activities.

First of all, the restriction on transactions without prior approval is justified by the risks of certain transactions. In this sense, it is not enough that the transaction was not unprofitable at the time of its execution. It is important that possible risks are analyzed at the stage before the transaction is concluded, which is quite difficult for the general director to do alone. The higher the risk of such a transaction, the more carefully the transaction should be considered before its conclusion.

In the case of a JSC, it is possible to distribute such additional competence only between the board of directors and the management board, if provided. In practice, this distribution occurs on the basis of a comprehensive or separate determination of the price and quality characteristics of transactions. This means that the charter can enshrine in the competence of the management board and the board of directors transactions that are the same in terms of the subject matter, but with different price thresholds . You can also highlight transactions that, in terms of their quality,characteristics (subject) are considered only by a certain governing body. Finally, one can be guided by both characteristics of transactions.

(i) making investments as the most risky activity that does not guarantee either profitability or return of the asset;

(ii) the organization's exercise of participant rights in key subsidiaries;

(iii) alienation and acquisition of expensive assets, including changes in the share of participation in the authorized capital of other organizations;

(iv) financing of third parties, including issuing loans, purchasing bills, etc.;

(v) transactions related to the possible alienation of non-current assets, including encumbrances;

(vi) obtaining financing from third parties, including loans, issuance of promissory notes, etc.;

(vii) modification of previously reached agreements with counterparties regarding the main obligations of the parties, if such agreement affects the cases defined in paragraphs (i) - (vi).

This list is a generalized conclusion and is relevant for most companies, so it can be taken into account when forming the competence of management bodies. However, the list is based on the idea of efficiently distributing objective risks, which means that it is not suitable for some organizations. For example, in a situation where joint activities are carried out within the framework of one legal entity, relations between partners are burdened with subjective factors; accordingly, priorities may be set in a different way.

Clause 30 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated November 18, 2003 No. 19 “On some issues of application of the Federal Law “On Joint Stock Companies” (hereinafter referred to as Resolution No. 19).

Is approval of a transaction required by the board of directors of a joint stock company if the law establishes a mandatory requirement for its approval by the general meeting of shareholders? Experts from the Legal Consulting Service GARANT Ruslan Gabbasov and Alexey Alexandrov explain.

The joint-stock company plans to complete the transaction. The charter of the joint-stock company states that transactions under this type of agreement are approved by the board of directors. At the same time, since this transaction is large, the law establishes a mandatory requirement for approval by the general meeting of shareholders. What to do in this situation - should two protocols be drawn up from different bodies, or is its approval by the board of directors of the company not required and approval of the transaction by the general meeting of shareholders is sufficient?

In accordance with paragraph 1 of Art. 79 of the Federal Law of December 26, 1995 N 208-FZ “On Joint-Stock Companies” (hereinafter referred to as the JSC Law), a major transaction must be approved by the board of directors (supervisory board) of the company or the general meeting of shareholders.

If the subject of the transaction is property, the value of which is from 25% to 50% of the book value of the company’s assets on the date of the decision to carry out such a transaction, then the transaction must be preceded by a decision on its approval by the board of directors of the company, adopted unanimously (clause 2 of Article 79 Law on JSC).

In the case where the subject of the transaction is property, the value of which is more than 50% of the book value of the company's assets, the decision on its approval must be made by the general meeting of shareholders with a three-quarters majority vote of shareholders - owners of voting shares participating in the general meeting of shareholders (clause 3 Article 79 of the JSC Law).

The situation in which such a transaction, by virtue of the provisions of the company’s charter, is also subject to approval by the board of directors, since it meets the criteria defined by the charter, is not directly regulated by law. However, in our opinion, a decision of the board of directors is not required in this case. Let us explain in more detail.

The Law on JSC does not allow the possibility of changing the rules for delimiting the competence of the company's management bodies provided for in it. The General Meeting of Shareholders is the highest management body of the company. Issues within its competence cannot be transferred to the board of directors for decision, with the exception of issues provided for by law (clause 2 of article 48 of the Law on JSC). The General Meeting of Shareholders does not have the right to consider and make decisions on issues not within its competence by law (clause 3 of the same article). In turn, the board of directors of the company does not have the right to make decisions on issues referred by law to the competence of the general meeting of shareholders (Clause 1, Article 65 of the Law on JSC).

Thus, the Law on JSC establishes the principle of delimiting the competence of the company’s management bodies. Each of these bodies is vested with individual terms of reference. The resolution of one and the same issue cannot be attributed by law or charter to the competence of several management bodies of the company at the same time.

Taking into account the above, since in the situation under consideration the transaction is subject to mandatory approval by the general meeting of shareholders, the provision of the charter on the need for its approval by the board of directors conflicts with clause 3 of Art. 79 of the Law on JSC and should not be applied.

Confirmation of what has been said can be found in the practice of arbitration courts. In particular, as the Federal Arbitration Court of the Moscow District indicated in its resolution dated October 8, 2007 N KG-A40/10297-07, the provision of the company’s charter regarding the attribution of the acquisition of shares in other enterprises to the competence of the board of directors does not indicate the need for separate approval of the transaction, since Due to mandatory requirements of the law, a transaction in which there was an interest was subject to approval by the general meeting of shareholders. We believe that similar logic should be applied to the situation under consideration.

The texts of the documents mentioned in the experts’ response can be found in the legal reference system

The development of corporate relations in modern Russia has passed a short but very specific path. If 10-12 years ago shareholders and participants were simply extras who transferred funds to the management of companies, who did not always know the “fate” of their investments and were excluded from making management decisions, then in the last few years the situation has changed: shareholders and participants began to actively defend their rights to make claims against senior management.

Both management and shareholders are interested in building new types of relationships with shareholders and participants. This is due to the achievement of a certain level of transparency of companies, the need to attract foreign investors and prepare reports according to international standards, and enter international markets. One of the important aspects of the participation of shareholders and founders in the management of companies in which their funds are invested is the approval of major transactions.

Legal essence of major transactions: where not to go wrong

What applies to major transactions?

A major transaction is a transaction related to the alienation or possible alienation of property. For joint stock companies, regardless of their “openness or closeness,” and limited liability companies, there are different approaches to determining what falls under the concept of a “major transaction.”

For joint stock companies, in accordance with the law of December 26, 1995 No. 208-FZ “On Joint-Stock Companies” (hereinafter referred to as Law No. 208-FZ), a major transaction is a transaction (including a loan, credit, pledge, guarantee) or several transactions related with the acquisition, alienation or possibility of alienation of property, the value of which is 25 percent or more of the book value of the company’s assets, determined according to the financial statements as of the last reporting date, with the exception of transactions concluded in the course of ordinary business activities, transactions related to the placement (sale) ) ordinary shares of the company, and transactions related to the placement of issue-grade securities convertible into ordinary shares of the company (Article 78). The charter of a joint-stock company may also establish other cases in which transactions carried out by a joint-stock company are subject to the procedure for approving large transactions and which will be classified as large.

For limited liability companies, in accordance with the law of 02/08/1998 No. 14-FZ “On Limited Liability Companies” (hereinafter referred to as Law No. 14-FZ), transactions related to the acquisition, alienation or possible alienation of property, the value of which is 25 percent, are considered large transactions from the value of the company’s property, determined on the basis of the financial statements for the last reporting period preceding the day the decision was made to complete the above transaction, unless the charter of the LLC provides for a higher threshold for a major transaction.

For large transactions concluded by JSCs and LLCs, the following is common:

a major transaction is associated with the acquisition, alienation, possible alienation of the company’s property;
a transaction can be direct or a chain of interconnected transactions;
the charters of companies may change and/or supplement the procedure and list of major transactions;
Transactions made in the normal course of business are not considered major.

The difference in major transactions between JSC and LLC is as follows:

For a JSC, a large transaction is considered to be 25 percent of the value of the assets, while for an LLC it is 25 percent of the value of the property.

This identity is not surprising, since all corporate legislation in our country was “cut according to the same patterns.”

What transactions can be classified as transactions carried out in the normal course of business?

This issue is very important, since the entire procedure for approval or (in its absence) invalidation of the transaction is connected with it. To a greater extent, this applies to joint-stock companies, since due to the specificity of their organizational and legal form, it is joint-stock companies that have a large number of controversial issues.

At JSC, major transactions include not only loan, credit, and guarantee transactions. In accordance with paragraph 30 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated November 18, 2003 No. 19, transactions involving the assignment of rights of claim, transfer of debt, and contributions of funds as a contribution to the authorized capital of a business company in payment for shares (shares) may also be classified as major transactions. . And according to the norms of the information letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated March 13, 2001 No. 62, all special norms and requirements applicable to JSC apply to LLCs.

However, the greatest interest in consideration is not large transactions, but transactions made in the normal course of business. Unfortunately, the current legislation does not establish clear boundaries and definitions of what relates to current economic activities and what to major transactions of an investment and strategic nature that may affect the future financial and economic activities of the company.

Unfortunately, in a number of credit institutions, not only managers, but also lawyers and credit officers misinterpret the concept of “a major transaction completed in the normal course of business.” So, this even means receiving loans for production development, purchasing equipment and components, etc.

Example 1
A confectionery factory, created in the form of a closed joint-stock company, submitted documents to the bank to receive a large loan, the amount of which exceeds 25 percent of the value of its assets. The loan amount is 35,000,000 rubles, and the assets are 20,000,000 rubles. In the feasibility study for obtaining a loan, the joint-stock company indicated that this loan was taken to ensure production purposes, therefore it is not considered a major transaction and does not require the approval of the general meeting of shareholders. However, the bank refused to receive a loan, since such a transaction is classified as large by law and requires mandatory approval. The bank’s actions can be considered erroneous, since the transaction falls under the category of ordinary business activities. The company requested a loan to pay for current business operations.

Transactions concluded in the normal course of business include the following transactions:

for the acquisition of raw materials and materials necessary for the implementation of production and economic activities;
for the sale of finished products;
to carry out work;
to obtain a loan to pay for current operations.

This is exactly the list given in the joint resolution of the Plenum of the Supreme Court of the Russian Federation No. 90 and the Plenum of the Supreme Arbitration Court of the Russian Federation dated December 9, 1999 No. 14.

Judicial and arbitration practice
According to the joint resolution of the Plenum of the Supreme Court of the Russian Federation and the Plenum of the Supreme Arbitration Court of the Russian Federation No. 4/8 dated April 2, 1997, the norms established by Articles 78 and 79 of Law No. 208-FZ “On Joint-Stock Companies” that determine the procedure for concluding major transactions by a joint-stock company do not apply to transactions committed by the company in the course of ordinary business activities (related to the acquisition of raw materials, materials, sales of finished products, etc.), regardless of the value of the property acquired or disposed of under such a transaction.

When classifying business transactions as large, arbitration courts proceed, first of all, from an analysis of the types of economic activities carried out by companies. And if a transaction is concluded in order to ensure the implementation of a certain type of economic activity or is directly caused by this type of economic activity, then it will be recognized as a transaction concluded in the course of ordinary business activity. This is confirmed by decisions of arbitration courts, in particular by decisions of the FAS Moscow District dated September 12, 2006 No. KG-A41/7615-06, FAS Northwestern District dated October 17, 2007 No. A56-51025/2006.

Judicial and arbitration practice
The Federal Antimonopoly Service of the North-Western District, in its resolution dated December 14, 2007 No. A21-4740/2006, indicated that in accordance with the charter of the limited liability company, the priority areas of its activity are the development and implementation of civil housing construction projects and the implementation of the functions of a developer. Consequently, the general contract for the construction of a residential building cannot be challenged and classified as a major transaction.

However, the concepts of “statutory activity” and “current economic activity” are not identical. In order for a transaction to be classified as current economic activity, it is necessary to confirm that it is carried out by the company on an ongoing basis and that there are other transactions of a similar nature in its work.

Example 2
The limited liability company operates in the field of transport transportation. The company's property amounts to 1,000,000,000 rubles. Management decided to purchase commercial real estate worth RUB 800,000,000. Mistakenly believing that the transaction fell into the category of transactions related to ongoing business activities, the CEO did not obtain shareholder approval. Due to its economic nature, this transaction did not fall into the category of current business transactions, but fell under the category of long-term investments. This transaction was not a transaction carried out by the company on an ongoing basis. Because of this, it was declared invalid.

A number of employees of credit institutions arbitrarily interpret the above concepts and sometimes do not know from which sources to obtain confirmation that the transaction relates to current economic activity. Confirmation that the transaction is carried out by the company on an ongoing basis is:

data from the statutory and constituent documents, minutes of the meeting of the board of directors and/or the General Meeting of Shareholders;
extract from the Unified State Register of Legal Entities;
accounting and tax reporting data.

Thus, a major transaction requiring approval will be considered a transaction related to the long-term immobilization of assets (for a JSC), property (for an LLC) or funds for purposes not related to the implementation of a typical and characteristic type of activity for a given legal entity.

Mechanism for approving major transactions in a business company

Approval of major transactions in joint stock companies

Approved major transactions in a joint stock company can be divided into transactions approved by the board of directors and major transactions requiring approval by the general meeting of shareholders. The division of transactions into those approved by various governing bodies depends on the value of the property that is the subject of the transaction.

The Board of Directors of the JSC approves major transactions in the event that the subject of the transaction is property, the value of which is from 25 to 50 percent of the book value of the assets of the joint-stock company. Moreover, the transaction must be approved unanimously by the entire board of directors (clause 2 of article 79 of Law No. 208-FZ). If any member of the board of directors is absent, the meeting to approve a major transaction must be rescheduled to another date or written confirmation of approval must be obtained from the absentee. In the decision-making process, only the votes of retired members of the board of directors are not taken into account: those who died, who resigned early before the general meeting of shareholders. All other absences will not be considered justified and the approval decision made by a limited quorum will not be considered legitimate.

If the subject of the transaction is property, the value of which is more than 50 percent of the book value of the company’s assets, then the transaction, in accordance with paragraph 3 of Article 79 of Law No. 208-FZ, is subject to approval by the general meeting of shareholders. Moreover, a major transaction must be approved by shareholders owning voting shares. Owners of preferred shares do not participate in voting. A major transaction will be considered approved if 3/4 of the votes of shareholders owning ordinary shares (qualified majority) votes in favor of it. If the shareholders violated the procedure for approving a major transaction, then in accordance with paragraph 6 of Article 79 of Law No. 208-FZ, it will be declared invalid. Moreover, the invalidity of a transaction can be recognized both at the claim of the shareholder and at the claim of the company.

If a joint stock company has only one shareholder owning 100 percent of the shares, then to approve the transaction the general director must obtain his written consent. This is precisely the position taken by the Presidium of the Supreme Arbitration Court of the Russian Federation, which indicated in information letter No. 62 dated March 13, 2001 that in companies consisting of one shareholder, the written consent (approval) of a major transaction by the shareholder is equivalent to a decision of the general meeting of shareholders. If the company has two shareholders who own shares in equal shares (i.e. 50% each), then a decision of the General Meeting is necessary, since in this case the full composition of shareholders will be considered a qualified majority.

The larger the assets of a joint stock company, the higher the threshold for the approved amount. Modern Russian corporate practice is such that the approval of major transactions can generally be attributed to the competence of the board of directors (in particular, this practice exists in OJSC Mineral and Chemical Company EuroChem). This allows you to more quickly respond to emerging investment opportunities or other necessary large transactions with property: after all, it is easier to convene a board of directors than a general meeting of shareholders. And the general meeting can approve the transaction at a subsequent meeting. Arbitration practice also allows for this possibility.

Judicial and arbitration practice

The resolution of the Federal Antimonopoly Service of the West Siberian District dated June 15, 2004 No. F04/3280-713/A46-2004 states that if there is subsequent approval of the transaction in accordance with Article 79 of Law No. 208-FZ, the procedure for completing the transaction is recognized as being observed and in compliance with the law.

The above procedure for subsequent approval of a major transaction by the general meeting complies with the standards of large foreign corporations. -However, in Russia this practice has not yet become widespread.

Approval of major transactions in limited liability companies

In accordance with paragraph 2 of Article 32 of Law No. 14-FZ, a board of directors (supervisory board) may be created in limited liability companies if this is provided for by the charter. The range of issues resolved by the board of directors of the LLC includes the approval of major transactions in accordance with Article 46 of Law No. 14-FZ, which is similar to the powers and competence of the board of directors of a joint stock company. In practice, if a board of directors is created in an LLC, then its competence in terms of approving transactions includes transactions with property, the value of which ranges from 25 to 50 percent of the value of the company’s property.

However, in most cases, an LLC does not have a board of directors, and decisions are made by a general meeting of participants.

Judicial and arbitration practice
The resolution of the Federal Antimonopoly Service of the Moscow District dated September 25, 2006 No. A-41-K-1-2943/06 states that the decision to enter into a major transaction is made by the general meeting of LLC participants in accordance with paragraph 3 of Article 46 of Law No. 14-FZ.

A major transaction approved by the general meeting of LLC participants in violation of the law can be challenged and declared invalid in court (Article 46 of Law No. 14-FZ). If there is only one participant in the LLC, then the transaction can be approved by him in writing, without drawing up minutes of the general meeting of participants. That is, the procedure is similar to the procedure adopted for a joint stock company.

Mechanism for ensuring shareholders’ rights regarding approval of major transactions

The mechanism for ensuring rights is considered in relation to joint stock companies. In limited liability companies, the problem of ensuring rights is not so acute and is mainly associated with ousting one of the founders. And it’s not particularly difficult to notify several people, who almost always occupy administrative positions in the LLC, about holding a meeting.

Another thing is a joint stock company. Here, respect for shareholders' rights comes to the fore. Their loyalty and willingness to support all business initiatives depends on how well management can respect the rights of shareholders. Many large and dynamically developing Russian corporations have created special departments for relations with shareholders that deal with issues of relations with shareholders and investors. And JSFC Sistema OJSC even introduced a special position of corporate secretary, who deals with issues of compliance with corporate procedures and the corporation’s management system. For more fruitful communication with shareholders, you can organize an investor day in the company.

Shareholder and his rights

Non-compliance with the rights of shareholders in a number of cases is due to the fact that the shareholders themselves are unaware of their rights and opportunities, or they associate them only with the receipt of dividends and remember their rights only in cases where the amount of dividends is reduced.

The shareholder can familiarize himself with all financial and accounting documents that are listed and enshrined in the company’s charter.

Judicial and arbitration practice
According to the resolution of the Federal Antimonopoly Service of the North-Western District dated November 18, 2002 No. A56-15780/02, the joint-stock company is obliged to provide shareholders with access to documents, the list of which is listed in paragraph 1 of Article 89 and in Article 91 of Law No. 208-FZ.

The information that shareholders can receive from the company upon their request is presented in Table 1.

Table 1

Type of information	Submission deadline	Regulatory framework
A copy of the current charter of the joint-stock company with all amendments and additions		Art. 46 of Law No. 208-FZ
List of persons entitled to participate in the general meeting of shareholders	after making the list	clause 4 art. 51 of Law No. 208-FZ
Information to be presented in preparation for the general meeting of shareholders: annual financial statements, audit commission report, external auditor's report, draft amendments and additions - to the statutory documents, draft internal documents, the adoption of which falls within the competence of the general meeting, draft decision of the general meeting	within 20-30 calendar days before the date of the meeting - and at the meeting itself	clause 3 art. 52 of Law No. 208-FZ

A joint stock company is obliged to provide shareholders with unhindered access to the following documents listed in Article 91 of Law No. 208-FZ:

agreement on the establishment of a joint-stock company;
the charter of the company with all registered amendments and additions;
documents confirming the unconditional and indisputable rights of the JSC to the property on its balance sheet;
internal documents of the company;
regulations on branches and representative offices of JSC;
annual reports;
financial statements in full;
minutes of general meetings of shareholders, meetings of the board of directors and the audit commission;
lists of affiliates;
other documents provided for by current legislation and internal regulations of the joint-stock company.

All of the above documents are submitted within 7 days from the date of presentation of the request for review.

In this regard, it is necessary to pay attention to the fact that shareholders must clearly indicate which documents they want to familiarize themselves with. In this matter, arbitration courts side with the management of joint stock companies.

Judicial and arbitration practice
According to the Determination of the Supreme Arbitration Court of the Russian Federation dated August 29, 2007 No. 10481/07, in order to obtain the requested information, the shareholder must specify exactly what documents he wants to receive.

Otherwise, the process of providing information may be delayed, and not through the fault of the management of the joint-stock company, but through the fault of the shareholder himself.

At general meetings of shareholders, the possibility of them using their rights depends on the percentage of the total number of votes

(from the block of shares). Table 2 shows the relationship between the number of votes and the rights and responsibilities of shareholders, viewed from the perspective of approving major transactions.

Table 2

	Shareholder rights	Regulatory framework
1%	The right to file a claim in court against a member of the board of directors, the general director, as well as the management organization or manager for compensation for damage caused to the company by their actions/inaction	clause 5 art. 71 of Law No. 208-FZ
10%	The right to demand the convening of an extraordinary general meeting of shareholders, the right to include issues on the agenda of the meeting	clause 4 art. 83 of Law No. 208-FZ
25%	Possibility to block decision-making by the company in cases where at least 3/4 of the votes must be cast in favor of making decisions at the general meeting	clause 2 art. 81 of Law No. 208-FZ
25%	The right of access to accounting and reporting documents and minutes of the meeting of the collegial executive body	Art. 91 of Law No. 208-FZ
30%	The presence of this number of votes ensures the quorum at the repeated general meeting of shareholders	clause 3 art. 58 of Law No. 208-FZ
50%	The presence of this number of votes ensures the quorum at the general meeting of shareholders	clause 1 art. 58 of Law No. 208-FZ
50%	Making a decision on an issue raised by a majority of votes at the general meeting of shareholders, except in cases where the decision must be made by at least 3/4 of the votes	clause 2 art. 49 of Law No. 208-FZ
75%	Introduction of amendments and additions to the company’s charter and/or approval of a new version of the charter	clause 1 art. 48 of Law No. 208-FZ
75%	Making a decision on approval of a major transaction, the subject of which is property whose value is more than 50% of the book value of the assets of the joint-stock company	clause 3 art. 79 of Law No. 208-FZ
100%	Making any decisions without observing the deadlines determining the procedure for convening and holding a general meeting of shareholders	clause 3 art. 47 of Law No. 208-FZ
Any number of votes	Vote on acceptance/rejection of large transactions	Art. 79 of Law No. 208-FZ

As an example of preparation for a general meeting, one can cite RTS OJSC, in which shareholders have the right to receive complete and reliable information about the state of affairs in the JSC; for the preliminary receipt of complete, reliable and objective information necessary for making a management decision that is correct and beneficial for the joint-stock company.

Responsibility for violation of shareholders' rights

In this case, responsibility for violation of rights will rest with the board of directors and/or the collegial/sole executive body. This is due to the excess of the limits of their powers by JSC officials, which is a violation of Articles 173, 174 of the Civil Code.

And according to Article 168 of the Civil Code, any transaction that does not comply with the requirements of the law or other legal acts is invalid. From a legislative point of view, all major transactions executed with violations fall within the definition set out in Article 168 of the Civil Code and are declared invalid.

Judicial and arbitration practice
According to paragraph 10 of the joint resolution of the Plenum of the Supreme Court of the Russian Federation and the Plenum of the Supreme Arbitration Court of the Russian Federation dated 04/02/1997 No. 4/8, a decision of the board of directors or the executive body of a joint-stock company can be challenged in court by filing a claim to declare it invalid as in cases in which the possibility of challenging is provided for by Law No. 208-FZ, and in the absence of appropriate instructions, if the decision made does not meet the requirements of the law and violates the rights and legally protected interests of the shareholder. The defendant in such a case is a joint stock company.

The expression “the defendant is a joint stock company” means that the executive body and the board of directors bear responsibility.

Officials of joint stock companies who commit administrative offenses are liable in accordance with the Code of Administrative Offenses for the following types of violations:

under Article 14.21 of the Code of Administrative Offenses - for improper management of a legal entity, the use of powers to manage an organization contrary to its legitimate interests and/or the legitimate interests of its creditor, resulting in a decrease in the equity capital of this organization or the occurrence of damages (losses);
under Article 14.22 of the Code of Administrative Offenses - for the conclusion by a person performing managerial functions in an organization of transactions or the commission of other actions that go beyond the scope of his powers.

All of the above offenses are administrative in nature and will be considered during arbitration proceedings.

If crimes committed by officials of a joint-stock company involve causing significant property damage, fraud or theft, then they are of a criminal nature and liability arises in accordance with the Criminal Code:

under Article 159 of the Criminal Code - for fraud (theft) of someone else’s property or the acquisition of someone else’s property by deception or abuse of trust;
under Article 165 of the Criminal Code - for causing property damage to the owner or other possessor of property by deception or abuse of trust in the absence of signs of theft;
under Article 177 of the Criminal Code - for malicious evasion of a citizen (the head of an organization) from repaying accounts payable on a large scale after the relevant court decision has entered into legal force.

Ways to deceive creditors using the mechanism for approving large transactions

Approval of large transactions can be used not only for the legal purposes of investment, business development, etc., but also to deceive creditors in order to obtain additional funds or property.

Offenses related to defrauding creditors can be divided into three groups:

offenses related to incorrect execution of documents for concluding major transactions;
offenses related to abuse of power by officials (executive body) of the company;
offenses related to conspiracy between shareholders and management of the company in order to invalidate the transaction.

Often in practice one has to deal with the opinion of the offending party that what was committed is a simple defect, a mistake by the contractor, etc. Of course, the fact of proving the unlawfulness of the debtor’s actions lies with law enforcement agencies, who must reveal this during operational and investigative measures. However, the identification of inconsistencies between the actions taken and the norms of legislation and statutory documents can be identified already at the stage of preliminary review of documents.

Offenses related to incorrect execution of documents

lack of documented approval of a major transaction by shareholders (founders);
retroactive approval of a major transaction by shareholders.

Lack of documentary evidence of approval of a major transaction by shareholders (founders)

This approval must be provided prior to the conclusion of a major transaction. To prevent such an illegal act, it is necessary to analyze the company's charter to find out which governing body must approve this type of transaction.

If the transaction, by its parameters, is subject to approval by the board of directors, then it is necessary to obtain the minutes of the meeting of the board of directors, dated no later than the day before the presentation of the documents to the counterparty.

If the transaction falls into the category of transactions approved by the general meeting of shareholders, then it is necessary to submit the minutes of such a general meeting, dated no later than the day preceding the submission of documents to the counterparty.

References to the fact that a major transaction was not pre-planned, but arose unexpectedly, should not be taken into account, since every more or less large organization draws up budgets and forecast plans for the year, which are approved at general meetings of shareholders. The only possible situation is with an extraordinary meeting of shareholders, when it is convened to approve this particular transaction.

Retroactive approval of a major transaction by shareholders

A situation where the executive body of a company or its general director concludes a major transaction, and then it is approved by the general meeting or board of directors, is in principle possible. But such a procedure must be enshrined in the company’s charter and in the power of attorney issued to the general director. If this is missing, then you must refuse the deal.

A number of managers of limited liability companies refer to the fact that, in accordance with Article 46 of Law No. 14-FZ, approval of a major transaction can be obtained from the founders after its conclusion. But this is only possible if subsequent approval is enshrined in the charter of the LLC.

Offenses related to abuse of power by an official (executive body) of the company

conclusion of transactions by an official who does not have the appropriate authority;
conclusion of transactions by a person whose authority has expired.

Concluding transactions by an official who does not have the appropriate authority

Even if all the documents for concluding a transaction are signed by the current general director of the company, this does not mean the legality of the transaction, since his powers must be enshrined in the charter, power of attorney and internal regulations of the organization.

Judicial and arbitration practice
The resolution of the Federal Antimonopoly Service of the Moscow District dated 06/07/2007 No. KG-A40/4031-07 states that, according to Article 174 of the Civil Code, if the powers of a person to complete a transaction are limited by an agreement or the powers of a body of a legal entity - by its constituent documents, in comparison with as they are defined in the power of attorney and in the law, or as they may be considered obvious from the environment in which the transaction is made, and in its execution such person or body has gone beyond these restrictions, the transaction may be declared invalid by the court.

This category of violations carries legal risks for the creditor in terms of refusal of a legal claim due to the fact that if the contract states that an official of the counterparty acts on the basis of the charter, and it is unconditionally considered that the plaintiff has read the contract and accepts it unconditionally conditions. In this case, it will be considered that the plaintiff knowingly knew about the limited powers of the counterparty’s official and agreed to a transaction with an unauthorized person voluntarily, and therefore there are no grounds for prosecuting the defendant. A sign of obvious fraud may also be the subsequent fate of the general director, who (after the transaction was declared invalid) was dismissed at his own request and the shareholders/founders did not make any financial or legal claims against him.

Concluding transactions by a person whose authority has expired

In most cases, the CEO or other executive is appointed for a specified term. The term of office of these persons is fixed in the statutory documents of the company and is duplicated in its internal documents (regulations, job descriptions, etc.). Indirect confirmation that the authority of the official has expired is the replacement or modification of the card with sample signatures submitted to the bank (but only credit institutions can have this opportunity).

Offenses related to conspiracy between a shareholder and the company’s management to invalidate a transaction

This offense already falls under criminal, and not administrative or arbitration legislation. A conspiracy between a shareholder/group of shareholders and management is possible with the aim of stealing funds or property with their subsequent non-return and disruption of contractual relations. This usually happens in those companies that are either on the verge of ruin and bankruptcy or were created for the purposes of fraud, as well as in cases where a legal entity has “completed its path” and, by decision of shareholders, must be closed.

Moreover, to add credibility, the claim is filed some time after the conclusion of the transaction (after it is no longer possible to return the loan, property or property rights). And the claim in such cases is filed by a shareholder who has a small percentage, or a minority shareholder.

To prevent illegal actions of this type, it is necessary to request minutes of general meetings of shareholders preceding the conclusion of a major transaction. If the issue of approval of this major transaction was brought up for discussion by shareholders, and the truth-seeking shareholder voted for approval, then the claims can be rejected and procedures can be carried out to recover funds, property and property rights and punish the perpetrators.

Additionally, it is necessary to find an opportunity to check whether shareholders were promptly informed about the agenda of the meeting and whether they had the opportunity to familiarize themselves with the materials of the agenda. In addition, it is necessary to proceed from the identity of the applicant shareholder. If, due to his personal and educational characteristics, the applicant objectively could not understand the issues of corporate law, then the issue of conspiracy should be considered first. In addition, a situation is possible where a shareholder has transferred his shares to the executive management of the company for management. In this case, the conspiracy is obvious, and it will not be difficult to prove interest in invalidating the transaction.

In a number of cases, shareholders claim that the shareholders/founders of the companies did not approve the transaction, management did not authorize it, and the protocols were falsified by creditors. In this case, a graphological examination is necessary.

This is just a small list of possible falsifications and frauds. Of course, along with the improvement of corporate legislation, fraudsters are improving their methods of illegal actions.

In conclusion, we note that invalidation of a major transaction entails not only financial losses in the form of an unrepaid loan, property or property rights, but also reputational risks for the lender. After all, if the organization has not previously familiarized itself with the existence of approval from the shareholders or founders of the business company, then this casts doubt on the qualifications of the employees who checked the documents and indicates an unsatisfactory level of the internal control system in the organization.

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