On 7 July 2025, the President of the Russian Federation has signed the Federal Law No. 186-FZ of 07.07.2025 “On Amendments to Article 21 of the Federal Law “On Limited Liability Companies" (hereinafter the “Law”), which provides for amendments to the Federal Law No. 14-FZ of 08.02.1998 “On Limited Liability Companies” (hereinafter the “LLC Law”) taking effect on 1 September 2025 regarding the possibility of excluding the pre-emptive right to purchase a share or a part thereof.
Reasons for amending the regulations
The previous version of the LLC Law could be interpreted as mandatory in terms of the provisions on pre-emptive rights, and this approach was sometimes supported both in legal literature and in court practice. At the same time, the provisions of Article 21 of the LLC Law were in some conflict with Article 66.3 of the Civil Code of the Russian Federation, which allows participants to regulate the procedure for exercising the pre-emptive right to purchase a share or part of a share.
The contradictory judicial practice was, to some extent, broken by the Ruling of the Supreme Court of the Russian Federation dated 11 June 2020 No. 306-ES19-24912 in case No. A65-3053/2019, in which the Supreme Court highlighted the “presumption of disposability” underlying the regulation of relations in LLCs, which allows, among other things, the company's charter to change or completely cancel the pre-emptive right to purchase a share.
However, after this Ruling, opposing positions were periodically encountered in court practice, pointing to the impossibility of excluding provisions on pre-emptive rights from the company's charter.
Possibility of excluding rules on pre-emptive rights participants in the company's charter
The Law allows the charter of an LLC to stipulate that the right of pre-emptive purchase of a share (or part thereof) does not apply to certain participants or groups of participants. In particular, this may apply to:
- participants directly named in the charter (with indication of their identification details);
- participants with certain characteristics (e.g., a share in the charter capital above or below a certain threshold);
- all participants in the company.
Procedure for including and excluding provisions relating to pre-emptive rights
The above provisions may be included in the charter when the company is established or added later by a unanimous decision of the general meeting of participants.
To exclude the above provisions from the charter, a decision must be made by a majority of at least 2/3 of the participants (unless the charter of the LLC requires a larger number of votes for such a decision).
In this case, both the inclusion and exclusion of provisions on pre-emptive rights from the charter must be certified by a notary.
Informing participants about the sale of a share
Participants who want to sell their share (or part of it) can ask the company for information on who has the pre-emptive right. The company has to provide this information within 5 business days of getting the request.
Procedure for the sale of a share
A notarised offer of sale shall be sent only to those participants who have a pre-emptive right. If no such right exists, the sale shall be carried out without notifying the other participants.
Non-application of certain provisions of the charter when transferring rights to shares
If a share (part of a share) is transferred from a participant who is expressly named in the charter and in respect of whom the charter of the company provides that:
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the rules on the pre-emptive right to purchase a share or part of a share in the authorised capital of the company do not apply, and (or)
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the exercise of the specified right is conditional upon the occurrence or non-occurrence of certain circumstances, a time limit or a combination thereof,
to other participants or third parties, then the special conditions established for such a participant alienating shares shall not apply to such acquirers.
Amendments to the Civil Code
Along with the amendments discussed above, Federal Law No. 185-FZ of 07.07.2025 came into force on 18 July 2025, amending the provisions of Article 93 of the Civil Code of the Russian Federation.
This law directly stipulates that participants in a limited liability company have a pre-emptive right to purchase a share or part of a share of a company participant, unless otherwise provided by the company's charter.