ON SEPARATE NOTARIAL ACTIONS BY NOTARY IN CORPORATE

The modern period is characterized by the strengthening of the role of the notary in corporate relations. This is due to their complexity and increased conflict. Also important is the tendency of participants in corporate relations to all sorts of abuses in this area – the adoption of illegal decisions that have a negative impact on participants, society, and well, also harming public interests; illegal alienation of participants of their shares in the authorized capital of the company. In this situation, the notary ensures the accuracy of information and the legality of registration actions, thereby contributing to the stability of civil turnover.

The trend of expanding the powers of the notary in corporate relations dates back to July 1, 2009, when the new version of the Federal law of 08.02.98 №14-FZ "On limited liability companies" came into force [4]. According to these changes, transactions on alienation of shares in authorized capital of limited liability company became subject to obligatory notarial certification. This caused quite a strong reaction in the business community, as many considered it a new and quite costly barrier to civil turnover. However, after a relatively short time, the application of this rule has yielded very positive results. Disputes in arbitration courts on challenging transactions on the alienation of shares in the authorized capital of the companies practically reduced to zero [3].

Paragraph 11 of article 21 of the above law States that a transaction aimed at the alienation of a share or part of a share in the authorized capital of the company is subject to notarization. Traditionally, in civil law, alienation is considered to be buying and selling. However, this does not mean that the share in the authorized capital of the company cannot be alienated in any other way. In addition to the contract of sale of the share in the authorized capital, the alienation of the share or part of the share of the participant of the company is possible by concluding a contract of donation, exchange, and also by concluding a marriage contract.

In addition, the legislator provided for cases of transfer of the right to a share in the authorized capital of the company, when notarial certification is not required:

- when selling at public auction;

- in case of acquisition by the company of a share or part of a share in the authorized capital;

- in case of acquisition of the share of the participant excluded from the company;

- in case of withdrawal of the participant from the company;

- in case of distribution of shares owned by the company between the participants.

Analyzing this list of exceptions, it should be concluded that the legislator has placed special emphasis on those cases where the transfer of a share in the authorized capital of an LLC can lead to a situation of hostile takeover, and left a lot of exceptions for cases in which such risk is minimal. These rules are due to the special nature of the LLC and the trust relationships that are formed between its members for optimal functioning [5]. At the same time, despite the fact that these situations do not require mandatory notarial certification, this does not deprive participants of the right to apply for notarial certification of the transfer of shares to other members of the company and third parties.

At the same time, it should be noted that there are certain problems that arise when the parties apply for a notarial certification of the transaction. Recently, the party – party to the transaction is not required to apply to the tax authority, as the applicant is a notary, he independently transmits the information to the tax authority. Timely registration of information is an important component, as this information for third parties becomes valid from the moment of state registration of changes in the unified state register of legal entities. In particular, the parties entered into a contract of sale, the transaction was notarized, the relevant applications were filled out by a notary and sent to the tax authority. However, the latter denies the registration and refers to the presence of the registration authority issued by a judicial police officer-executor about the prohibition on Commission registration authority to perform certain registration activities in respect of the seller owned shares in the share capital of the company.  In such a situation, the seller needs to lift the ban for the changes to be registered, however, sometimes it is almost impossible (for example, the ban is imposed for 3 years). Therefore, the parties have to re-apply to the notary and terminate the contract – significant time and money costs for both parties. Such a situation could be avoided by providing the notary with access to the data of the tax authority's information base, which would allow the notary to warn the participants of the transaction about the existing prohibitions at the stage of verification of information.

As noted above, mandatory notarization of agreements on alienation of shares in the authorized capital of the company has played a positive role in ensuring transparency and legality of corporate relations. Reflected positively in practice, the result was the reason for the introduction from September 1, 2014 of article 67.1 of the Civil code of the Russian Federation [1, p. 52-53], which gave limited liability companies and public joint stock companies the right to notarize the adoption of the decision by the General meeting of the participants of the economic society and the composition of the participants of the company who were present at its adoption. It is logical to ask why this action does not apply to all joint-stock companies. In our opinion, this is due to the large number of participants in the joint-stock company, which are often located in different regions of our country and collect them in one place at one time, it is quite difficult. This notarial action can be carried out both in the premises of the notarial office and outside it. Personal presence of the notary is obligatory, thus the possibility of confirmation of the decisions made in absentia is excluded.

It should be noted that the notarial confirmation of the decision-making by the General meeting of the participants of the economic society and the composition of the participants of the company who were present at its adoption is a right, but not an obligation. In the literature this causes conflicting opinions. Some authors emphasize that the mandatory notarization of the decision and the composition of the participants would minimize the abuse by the participants, other authors Express the view that the mandatory certificate would serve for a large number of companies as a kind of useless, but mandatory "collection" [5]. From our point of view, the consolidation of the responsibility would be very costly for business. Moreover, the parties, in the event of an imminent conflict of decision-making, can always apply for a notarial certification, thereby preventing the abuse of participants and possible dispute between them.

The most important issue is the status of the notary at the General meeting. When carrying out this notarial action, the notary determines the competence of the management body of the legal entity in terms of decision-making, the presence of a quorum, checks the legal capacity of the legal entity, as well as on the basis of counting votes, checks the availability of the required number of votes to make a decision.  However, according to part 5 of article 103.10 of The fundamentals of legislation on notaries, a notary has no obligation to verify compliance with the procedure for convening a General meeting. Upon termination of this notarial action the notary issues the certificate on the certificate of acceptance by the General meeting of participants of economic society of decisions and structure of participants of societies. Notarial certification of decision-making and the composition of participants excludes falsification of the minutes of the General meeting of participants – inclusion in the minutes of issues that are not the subject of voting at the meeting, distortion of the results of counting votes, fraud of the composition of participants, as well as other unfair actions.

Thus, if we talk about limited liability companies, at the moment the degree of involvement of the notary in corporate relations increases. However, in our opinion, the powers of the notary in the future can also be expanded. Of course, for this purpose it is necessary to further improve the capabilities of the notary, in addition to the legislative, it is necessary to provide the most advanced technical capabilities to maximize the prevention of violations of legislation in the corporate sphere. At this stage, the potential of the notary is underestimated to the end, although it has been repeatedly confirmed by practice that the notary is really a socially significant and effective legal institution.

References:

1. Civil code of the Russian Federation: 4 hours: as of March 1, 2019 - Moscow: Prospect, 2019. – 638 p.
2. Ivanov D. As well. Notarial confirmation of the decisions of economic entities: acute problems and the first terminal of the judicial practice. journal [Electronic resource] // Russian legal journal. 2016. N 6. - /Notary, 2015. N 3. – Mode of access: https://base.garant.ru
3. Kirillov E. As well., Alienation of a share in the authorized capital of a limited liability company: novelties of legislation and problems of notarial practice [Electronic resource] / "Notary", 2015. N 3. – Mode of access: http://www.consultant.ru
4. About modification of part one of the Civil code of the Russian Federation and separate legal acts of the Russian Federation [Electronic resource]: Feder. law of the Russian Federation of 31.12.08 №312-FZ // Reference legal system "ConsultantPlus". – Mode of access: http://www.consultant.ru
5. Shcherbakov As Well.G., Actual problems of participation of notaries in corporate relations [Electronic resource] // – Access mode: https://bstudy.net/625464/pravo/aktualnye_problemy_uchastiya_notariata_korporativnyh_pravootnosheniyah