Renewal of director's powers: A foreign notary is not suitable
As we have already written from 01.09.2024 the appointment of the general director of a limited liability company (LLC) is carried out only through a notary.
In this case, as we expected, counterparties, banks and other persons require not only confirmation of the appointment, but also confirmation of the extension of the powers of the CEO in notarised form.
A notarised document is not a universal solution
A limited liability company with 100% foreign participation was faced with a bank's demand to provide a notarised confirmation of the extension of the powers of the current CEO. The company's participants executed a resolution to extend the powers of the CEO with a foreign notary, but the bank refused to accept it because the notary merely certified the identities and signatures of the company's representatives on the resolution, but did not hold a general meeting of shareholders (GMS) as such.
This is an important signal for Russian companies with foreign participants - as a rule, earlier resolutions were executed as described above, and not only for the extension of powers, but also for the appointment of the general director of limited liability companies. As a result, it can be expected that banks, counterparties and other parties may more often refuse companies on the basis of incorrectly conducted general meeting procedures involving a foreign notary.
How to extend the powers in this situation?
The simplest solution for extending the powers of the CEO of a company with foreign participation may be for foreign shareholders to issue powers of attorney for their representatives in Russia in order to hold an in-person GMS with a Russian notary.
At the same time, it should be taken into account that in many companies the extension of the powers of the CEO is not carried out by the GMS, but by the Board of Directors, whose members are not entitled to issue powers of attorney under the current legislation. In this regard, for companies with foreign participation, we can recommend that these powers be returned to the GMS (for example, by making the necessary amendments to the Charter) and then proceed as described above through the issuance of powers of attorney from foreign shareholders.