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Dear clients and cooperation partners,
In this Corporate Newsflash, we briefly review substantial amendments to the Commercial Law which will come into force on 1 July 2011. The amendments provide that:
1. Natural person’s residential address will not be made public
Information regarding residential addresses of the Management and Supervisory Boards of limited liability companies as well as authorised representatives of branches and representative offices will not be registered in the Commercial Register. These persons will still have to provide the Commercial Register with an address where they can be reached but the information will not be publicly available and will be disclosed to third parties only upon receipt of a well-grounded request.
2. Additional requirements for registration of legal address
In addition to the documents already required for registration in the Commercial Register of the legal address of a company, branch or representative office, consent of the owner of the premises where the company’s address is located must now also be filed with the Commercial Register.
3. Stricter rules for convening general meetings of shareholders
Although so far the Commercial Law has imposed no restrictions on the location of a general meeting of shareholders, the amendments require the general meeting of shareholders to be convened in the territory (city or region) where the company has its legal address, except if the articles of association provide otherwise.
Thus for holding meetings of shareholders outside the respective administrative territory the articles of association of the company must be amended accordingly. However, the Commercial Law has kept the provisions stating that if all AS shareholders are present at a meeting of shareholders, then the decisions of the meeting are valid irrespective of the time, type of convening, or place of the meeting. Most likely, meetings of SIA shareholders if attended by all shareholders will also be entitled to adopt decisions irrespective of the place of the meeting, without amending the articles of association.
Taking into account that the aim of an extraordinary meeting of shareholders is to review important decisions for the company between general meetings, an extraordinary meeting should be held at the shortest possible time after receipt of a request for one. Thus the amendments to the Commercial Law require an extraordinary meeting of shareholders of a public limited liability company (AS) to be convened within three months, at the latest, after receipt of a request.
4. Changes in reorganisation procedure
Under the amendments, if agreed by all shareholders of a company, a reorganisation prospectus will not be necessary for public limited liability companies. Likewise, a prospectus will not be needed if all the shares of the merging company or the company under division are owned by the acquiring company. This regulation simplifies reorganisation where a parent company reorganises a subsidiary.
Furthermore, if agreed by all shareholders of a company, a report on commercial activities also need not be prepared (previously this was mandatory if the preceding annual report was completed more than six months before filing a reorganisation notice with the Commercial Register).
The Commercial Law now has a new chapter with special regulations for reorganisations via merger if the acquiring company owns more than 90% of the shares of the merging company. In these cases, as well as in cases when the acquiring company owns all shares in the company to be divided, the company's management board adopts the decision on reorganisation. |
