It is time to set a date for the general meeting of a limited liability company’s members

It is time to set a date for the general meeting of a limited liability company’s members

LEGAL DIGEST \ 19.02.2019

Acsour reminds you that a scheduled general meeting of the members of a limited liability company (‘LLC’) must be held and also of the rules governing how dividends should be paid abroad.

As required by Federal Law No. 14-FZ ‘On limited liability companies’ dated 8 February 1998, a general meeting of LLC’s members must be held during the period between 1 March and 30 April.

The document describes the mandatory items on the agenda of the meeting, including the requirements for the necessary documentation. While preparing for the meeting, companies often have questions as to how dividends should be paid to a company’s foreign members.

The Ministry of Finance has recently explained in detail what should be done to apply a preferential tax rate. Such a tax rate can be applied if the relevant countries have entered into a double tax treaty applying to the payment of dividends abroad. The Ministry noted that the residency of a member company must be confirmed in advance, before the income is paid out. To this end, documents that are issued and certified by a competent authority abroad can be used in a form established by the legislation of the relevant foreign state.

The Ministry further stressed the importance of confirming beneficial ownership of income when dividends are paid abroad. For these purposes, a foreign company’s confirmation of its status as a beneficial owner should take the form of a letter signed by the CEO of the foreign company that is the owner.

Acsour will gladly draft all the documents you require to hold a regular general meeting of members.