State Property Committee: Annual general meetings of shareholders must be held in business companies by March 31
The Committee draws attention to the fact that in 2021, a number of amendments to the laws on business entities came into force.
Thus, proposals for the agenda of the annual meeting must be submitted no later than 30 days after the end of the reporting year.
The agenda of the annual meeting must include the following issues:
- approval of annual reports, annual financial statements;
- distribution of profits and losses of the business entity;
- election of members of the supervisory board;
- election of the audit commission (auditor).
The State Property Committee has developed a sample charter for a open joint-stock company and Regulations on the supervisory board of an open joint-stock company, which can be found on the committee's website.
When preparing the annual meeting of shareholders, a list of persons entitled to participate in the general meeting is compiled. These persons must be notified of the meeting no later than 30 days before its date.
Before the annual meeting, the executive body of the business entity must prepare information on the company's activities for the reporting year. This information must be available for review by persons entitled to participate in the meeting 20 days before the meeting.
State property management bodies, before the annual meeting, if necessary, should ensure the appointment of state representatives to the management bodies of business entities.
In this case, state representatives should be appointed from among persons who are at least heads (deputy heads) of structural divisions of state bodies (organizations). If they do not meet these requirements, then the state property management bodies must take measures to replace such persons.
When selecting candidates for the composition
The supervisory board may use the register of candidates for election to the supervisory boards of business entities as independent directors, formed by the State Property Committee and available on the committee's website.
Prior to the annual general meeting, the owner's supervisory bodies must agree in writing on the position of the state's representatives on the agenda items of the annual general meeting. A state representative who has not agreed on the position in the prescribed manner does not have the right to participate in voting on the relevant issue.
The annual general meeting may be held in person, by correspondence, or in a mixed format. The format of its conduct is determined by the decision to hold this meeting.
Business entities with a state share in the authorized fund exceeding 50%, in the absence of circumstances established by Part Five of Article 72
of the Law for joint-stock companies and Part Four of Article 96 of the Law for limited liability companies, are obliged to allocate part of the profit for dividend payments. In this case, the amount and timing of dividend payments must be determined in accordance with the requirements established by Decree No. 637.
After the formation of the new composition of the supervisory board, it is necessary to ensure the election of its chairman and deputy chairman. In this case, according to the State Property Committee, they should not be subordinate to the head of the business entity.
In case of negative profitability or if the net profit is insufficient to pay remuneration, remuneration is not paid to the state representatives.
For more detailed information on the explanations of the State Property Committee, please refer to the link.