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Amendments to the law on joint-stock companies in Russia

Russia
28/10/2002
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On 16 October 2002, the Russian Federation Council approved the Bill to amend the Federal Law On Joint-Stock Companies after it was passed by the State Duma in three consecutive readings on 11 October 2002. It was reported that the amendments were instigated by major oil companies, including Yukos and Sibneft. It is expected that the amendments will receive the President's assent shortly.

The new amendments re-introduce the right of joint-stock companies to pay out interim dividends on distributed stock at the end of the first, second and third quarters. The amount and the term of payment are to be set out in a company's charter or shareholders' resolution. The dividends must be paid within 60 days from the date of the resolution authorizing the payment.

The amendments are aimed at enhancing the protection of Shareholders' rights and increasing investment in the Russian market. It is expected that investors will benefit in terms of taxation of dividends, since interim dividends will be taxed on a quarterly rather than on an annual basis.

For further information please contact David Griston at [email protected] or on 00 7 095 2585000.

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