Belarus: reminder about annual meetings of shareholders and reports on the activities of representative offices

Publication / 26 January 2023 / Maksim Salahub, Aliaksei Vashkevich, Dzmitry Kovalenka

As 2023 picks up pace, the time comes to assess the results of the previous year and comply with corporate formalities related to the approval and filing of annual reports. For entities operating in Belarus the applicable requirements and deadlines are as follows:

for joint-stock, limited liability and additional liability companies: to conduct an annual meeting of shareholders (Annual Meeting) no later than 31 March
for representative offices of foreign companies (RepOffice): to file a report on the activities of the RepOffice (Report) no later than 1 March

In this article, we are happy to share some tips and reminders that may be helpful when arranging compliance with these formalities.

Annual Meeting

The summary below covers some of the key requirements established by general company law for the process of preparing and conducting the Annual Meeting. Kindly note that these requirements can to a certain extent be modified by the company’s articles of association, which should be taken into account during preparations for the meeting.

Preparatory actions

When preparing for the Annual Meeting, the following actions and formalities shall be arranged:

Internal audit report. The company’s internal auditor or audit commission conducts an annual revision and prepares a report which mainly focuses on the accuracy and correctness of the accounting and financial statements. The law requires this report to be considered when approving the annual financial statements and distributing profits or losses.
External audit (if required by law). In certain cases (e.g., if the company is a Hi-Tech Park resident or its revenue for the reporting year exceeds BYN 18,500,000 etc.) the company may be also required to order an independent audit of the annual financial statements. The report prepared based on the results of this audit shall be considered when approving the annual financial statements and distributing profits or losses.
Management report. The company’s executive body prepares a report about the activities of the company in the reporting period, including plans and forecasts for the upcoming year, and information about subsidiaries and certain transactions, among other information.

Specifically, the management report shall include information about the company’s net assets and their correlation with the share capital. If the share capital exceeds the net assets, then:

(i) the company cannot distribute dividends

(ii) the joint-stock company cannot acquire own shares

(iii) the shareholders shall adopt a decision to reduce the share capital to the amount of the net assets

Furthermore, if the net assets fall below than the minimum amount of share capital or become negative, the shareholders will be obliged to make a decision on liquidation of the company unless the net assets increase above the relevant threshold within six months of the end of the financial year (i.e. by 30 June).

Agenda

The mandatory issues that shall be on the agenda of the Annual Meeting are as follows:

approving annual reports and annual financial statements
distributing the profits or losses of the company
electing an internal auditor or the members of the internal audit commission
electing members of the supervisory board (if one has been created at the company)

The agenda of the Annual Meeting may also include other issues.

Form

Belarusian law provides three possible forms for the meeting of shareholders:

onsite – involves the presence of the shareholders or their representatives at the meeting in person (or online if the company’s articles of association allow it)
absentee – involves remote voting by voting ballots which shall be delivered to the company before the meeting
mixed – involves some shareholders attending the meeting in person (or online), and some participating via absentee voting

Procedure for convoking and conducting the Annual Meeting

The key procedural steps for convoking and conducting the Annual Meeting include the following:

Making a decision. The authorised body of the company decides on convoking the Annual Meeting.
Sending notifications. The authorised body of the company notifies the shareholders about the upcoming Annual Meeting. The notifications shall be delivered at least 30 days prior to the meeting, unless a different term is established in the company’s articles of association.
Providing information. The authorised body of the company makes the management report available to shareholders at least 20 days prior to the Annual Meeting. The report is usually kept at the registered office of the company and, in addition to this, may be provided to the shareholders by other means, e.g. via email.
Making proposals for the agenda. The shareholders may submit proposals for the agenda of the Annual Meeting – the deadline for the submission is 30 January, unless another term is provided for in the articles of association.

The authorised body of the company reviews the proposals and, if needed, changes the agenda. The deadline for the review is 10 days following the expiry of the term for submitting proposals.

Holding the meeting. The meeting can be held provided that shareholders who collectively have at least 50% of all votes participate, unless a higher threshold is stipulated in the articles of association. In case the required quorum is not met, the Annual Meeting shall be reconvened.
Preparing the minutes. Following the Annual Meeting, a responsible person (usually the chairperson of the meeting) prepares the minutes and, if required by the articles of association, provides them to the shareholders.

If the company has only one shareholder, the Annual Meeting is not conducted. The sole shareholder decides on all mandatory issues on the agenda of the Annual Meeting and formalises these decisions by a resolution of the sole shareholder.

RepOffice Report

The Report shall be submitted to the relevant regional executive committee or, if the RepOffice is located in the Great Stone Industrial Park, to the administration of the Park, and shall comprise the following information:

location of the RepOffice
staff schedule and number of foreign employees of the RepOffice (including the head of the RepOffice)
contact details of the RepOffice
tax registration number
bank accounts opened by the RepOffice
programmes of activities performed by the RepOffice of a non-profit foreign organisation, as well as the terms and resources for their implementation
the amount and recipients of grants provided by the RepOffice to public organisations (associations) and individuals
description of the activities of the RepOffice during the reported year

The Report may include additional information at the discretion of the RepOffice.

If the RepOffice does not submit the Report by 1 March, the responsible state authority may issue a warning to the RepOffice and specify an extended deadline for submitting the Report. Should the RepOffice further fail to comply with the deadline, it may be closed upon the decision of the responsible state authority.

Should you need any assistance or have further questions with reference to the above, please do not hesitate to contact us: