Four Eyes Principle to Manage a Russian Company

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MOSCOW – Starting from the 1st of September, a company may have more than only one General Director, according to the amendments to the Russian Civil Code. The number of General Directors is not limited. Companies may regulate in their charter, which deals might be concluded by one General Director and which deals and decisions require the approval of all or several General Directors. For example, it might be stipulated that each General Director may sign contracts up to a certain price and above such limit only with the approval of a second General Director. Thanks to these changes modern management structures implementing the four eyes principle can now be introduced into the management of Russian entities. Still, before the new regulation could be implemented, some changes in the Law on Limited Liability Companies require respective amendments. Beside this amendment the Civil Code now explicitly mentions the option to transfer the management of a company to a management company, like for example RUSSIA CONSULTING Management Company.

Other amendments to the Civil Code are also worth to be noted: The legal form of “ZAO” (close corporation) will be abolished. All ZAOs shall adjust their Charters in accordance with the new law by the first any other change of the Charter. That ZAOs featuring publicity are considered as public Joint Stock companies, the rest are non-public Joint Stock companies.

RUSSIA CONSULTING has been consulting and supporting foreign clients in St. Petersburg since 2004. The company has been instrumental in helping foreign investors to set up businesses in the city and handle local economic conditions. On-the-ground presence and years of business experience in the given city are essential to giving sound advice on foreign investment. RUSSIA CONSULTING can provide you and your organization with an in-depth understanding of business set-up, business consulting, taxation, accounting, recruiting, basic legal matters, IT services, set-up of internal control systems, adapted to the local environment. Furthermore, we can provide you with office space, a local general director, or finance and tax due diligence.