General Meeting of LLC Participants: Competence, Minutes, Voting

Exclusive competence of the meeting

The meeting's competence is set by the charter in accordance with the law (Art. 31). Matters of exclusive competence may not be delegated to the supervisory board or the executive body, except where the law allows. They include, in particular:

• setting the main lines of business and participation in associations of commercial organizations;
• changing the amount of the charter fund (charter capital) and amending the founding documents;
• forming the executive bodies, electing the audit commission (auditor) and the supervisory board, and terminating their powers early;
• approving the financial statements and distributing net profit among participants;
• deciding to conduct an audit and setting the maximum fee for the audit organization;
• establishing other legal entities, representative offices and branches;
• reorganizing or liquidating the company, appointing a liquidator and approving liquidation balance sheets.

Annual and extraordinary meetings

The regular meeting is held within the periods set by the charter, but at least once a year, and is convened by the executive body (Art. 32). The meeting approving the annual results must take place no later than six months after the end of the financial year — this deadline must be written into the charter.

An extraordinary meeting is convened by the executive body at the request of any participant, the supervisory board or the audit commission (Art. 33). The request is considered within three days; it may be refused only if the request procedure was breached or none of the items falls within the meeting's competence. If it is decided to hold the meeting, it must take place no later than forty-five days after the request is received. If the executive body fails to respond or refuses, the requesting persons may convene the meeting themselves — the company must give them the list of participants with addresses.

How to convene: deadlines and materials

Each participant must be notified at least thirty days before the meeting — against receipt at the address in the list of participants, by means of communication confirming receipt, or by another method set in the charter (Art. 34). The notice states the time, place and proposed agenda.

A participant may propose additional items no later than fifteen days before the meeting. If the agenda changes, all participants are notified at least ten days in advance. Materials are sent with the notice and must be available for review at the executive body's premises for thirty days before the meeting; the charter may provide shorter periods.

• the company's annual report;
• the opinion of the audit commission (auditor);
• the auditor's report on the reliability of the financial statements;
• information on candidates for the company's bodies;
• draft amendments to the founding documents or their new version.

Registration, votes and decisions

Participants are registered before the meeting opens; an unregistered participant may not vote (Art. 35). Participation may be in person or through a representative: an individual's voting power of attorney must be notarized, and a legal entity's power of attorney is signed by its head and sealed if it has a seal.

Each participant has votes in proportion to its share in the charter fund, unless a different procedure is set in the charter at incorporation or by a unanimous decision of all participants. The meeting may decide only on agenda items notified to participants — unless all participants are present.

The law sets three thresholds, counted from the total votes of all participants, not only those present: at least two thirds for the matter named in paragraph two of part 2 of Art. 31 and matters specified in the charter; unanimity for the matter in paragraph twelve of part 2 of Art. 31; and a majority for other decisions, unless the law or charter requires more. So there is no separate attendance quorum: a decision fails if the votes present do not reach the required threshold. Thresholds for specific matters should be checked against the official text and written into the charter. Voting is open by default.

Minutes of the meeting

The executive body organizes the keeping of minutes (Art. 35). The chair and secretary sign the minutes no later than three days after the meeting, and within five working days of finalizing them the secretary sends an extract to all participants by post or e-mail (Art. 36). Minutes are kept among the company's mandatory documents for the period set by the charter (Art. 54).

• time and place of the meeting;
• the total number of votes held by the participants present;
• the chair (presidium), secretary and agenda;
• key points of the reports, the items put to a vote and the voting results;
• the decisions adopted.

Absentee voting and a sole participant's decision

A decision may be adopted without joint presence — by absentee voting (poll) via post, electronic or other communication that ensures the reliability and documentary confirmation of messages (Art. 37). But absentee voting is not allowed on matters of exclusive competence in part 2 of Art. 31 unless the charter provides otherwise. The absentee voting procedure must be set out in the charter.

In a company with one participant, matters within the meeting's competence are decided by that participant alone and documented in writing (Art. 38). In that case a written decision of the sole participant is drawn up instead of minutes.

Challenging decisions

A decision adopted in breach of the law or charter that violates a participant's rights may be declared invalid by a court on the claim of a participant who did not vote or voted against (Art. 45). The deadline is two months from the day the participant learned or should have learned of the decision, or, if they attended the meeting, two months from the day of the decision.

A court may uphold the decision if the claimant's vote could not have affected the outcome, the breach was not material and the decision caused them no loss. If the convening procedure was breached but all participants attended, the meeting is deemed competent (Art. 34).