Amendments (de facto a new version of the Code) were passed In the first reading on 27 April and now over 2 thousand second reading amendments are being introduced. Civil law fundamentals have been revised, including a thorough makeover of the corporate management system.

Friday’s amendments include a new article on transaction approval, that can either precede or follow the deal.

Transactions worth over 10 thousand Roubles must be notarized. There is an option to register a trade by court order, if the trade requires state registration or notarization and one of the parties evades registration. Limitation period is one year. If notarization is mandatory, failure to do so leads to nullity.

Amended terms of a registered trade are subject to state registration.

A trade becomes invalid if third party, Board or local authority approval was not obtained.

A transaction concluded under third party influence may be deemed invalid by court if fraud was known or should have been known by the other party.

Cabal trade rules apply to extremely disadvantageous transactions concluded under influence, due to lack of experience or lack of consideration or will, used by the other party.

A new Article 9.1 “Meeting decisions” is introduced in the new Civil Code, containing a template for Meeting decisions – minutes and required points. Invalid decisions are either contestable or void.

Power of attorney norms include direct presentation of written POAs to banks and post offices for bank deposit withdrawal, cash-in, account transactions, including cash withdrawal, receipt of correspondence.

The POA may be revoked or returned at any time. This does not apply to irrevocable POAs that can only be revoked following the execution of powers, or at any time if the POA has been abused.

Irrevocable POAs must be notarized. General limitation period is three years from the moment when abuse of power was made known or should have been made known by the issuer, including personal details of the abuser. Maximum limitation period for breached powers protection is 10 years.

The document is planned to be enacted on 1 June 2013, with the exception of several clauses.

Corporate and contract law, Project Group №2