On 15 July 2026, Federal Law No. 237-FZ of 4 July 2026 "On Amendments to the Federal Law on Joint-Stock Companies and Certain Legislative Acts of the Russian Federation" (the "Law") entered into force.
The Law establishes a list of grounds upon the occurrence of which the powers of a member of the board of directors terminate early, and such person is deemed to have ceased to be a member of the board of directors. This procedure is established both for JSCs and for LLCs in which a board of directors (supervisory board) has been formed.
Such circumstances include:
- the death of the member of the board of directors;
- the entry into legal force of a court decision declaring the person legally incapable, of limited legal capacity, missing, or declaring the person deceased;
- the entry into legal force of a court judgment depriving the person of the right to hold certain positions, or of a court decision on disqualification, from which it follows that the person may not serve as a member of the board of directors;
- receipt by the company of written notice from the member of the board of directors of the early termination of their powers;
- as well as other cases provided for by the federal legislation of the Russian Federation.
The powers of a member of the board of directors terminate from the date on which the relevant circumstance occurs (and, in the case of a court act, from the date on which it enters into legal force).
If provided for in the company’s articles of association, the general meeting of shareholders may elect a new member (members) to replace the person (or persons) who has (have) resigned from the company’s board of directors (supervisory board).
The targeted election mechanism will not apply automatically – in order to replace a departed director without re-electing the entire board of directors, the relevant provisions must be included in the charter in advance and, if necessary, further regulated in the company's internal documents.
For public companies, the new targeted election procedure will not apply if the departed person was recognised as an independent director of the public company (PJSC) in accordance with the criteria established by the charter, an internal document of the company and/or exchange rules.
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FOR JSC |
FOR LLC |
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If provided for by the charter, the general meeting of shareholders will be able to elect one or more new members of the board of directors to the vacant seats without re-electing the entire composition of the board of directors – cumulative voting will not apply in this case.
A resolution will be deemed adopted if at least 3/4 of the votes of shareholders holding voting shares participating in the meeting are cast in favor of the candidate, and, at the same time, holders of less than 2% of all voting shares of the company vote against. |
The company's charter may provide for the possibility of the general meeting of participants electing one or more new members of the board of directors to replace the departed member(s), without re-electing the entire composition of the body.
Unlike for JSCs, the law does not establish special requirements for the procedure of such election for LLCs (quorum, number of candidates, vote threshold) – the company determines the specific procedure independently in its charter. |