International Law Office - Legal Newsletters, Law Firm Directory and Legal News

Recent months have seen several developments affecting company registration and organisation. Among other things, a bill has been introduced imposing stricter penalties on compa­nies located at an address other than that specified in the Unified State Register of Legal Entities, significant amendments relating to associations are now in force and a new form of non-profit legal entity has been proposed.

A bill to amend the Civil Code contains important provisions to improve the protection of good-faith legal activity. However, despite these proposed improvements, legal protection under Russian law still has many gaps with regard to commercial transactions. For this reason, an investigation of the rights of contracting parties through thorough due diligence is indispensable in major investment projects.

A bill to amend the Civil Code, which is under debate in the Duma, contains important provisions to improve the protection of good-faith legal activity in commercial property transactions. Among other things, the bill officially positions the Uniform State Register of Rights to Property and Legal Transactions Therewith as the focal point of legal protection and clarifies the limitation periods for certain property-related claims.

A new law introducing amendments to the Civil Code was enacted late last year. The changes, the majority of which will come into force in early March, are the first step of large-scale reform of the Civil Code. The amendments aim to strike a balance between the interests of all parties involved in property transactions and ease registration obligations.

Significant amendments to the Civil Code were recently published for consideration by the State Duma. The amendments provide for significant changes to the law governing real estate transactions, including with respect to registration of property, in rem rights, leases, mortgages and good-faith purchase protection.

Significant amendments to the Civil Code were recently published for consideration by the State Duma. Among other things, the draft amendments will make the registration of franchise agreements easier, while giving parties to franchise agreements greater legal protection during negotiations and with respect to payment obligations.

In considering a particular dispute, the presidium of the Supreme Arbitrazh Court has held that the parties to a paid services contract may specify the obligations of the service provider to be both the fulfilment of certain actions and the provision of particular deliverables connected with those actions (eg, contracts, applications or other documents) to the customer.

Amendments have been made to certain laws aimed at resolving issues that have arisen in the course of the extension of Moscow's city limits. Amendments to property registration may now be entered into the register based on the resolutions of state government bodies and without the property owner's participation.

The Ministry of Economic Development and Trade has established a new procedure for receiving information from the Unified State Real Estate Register, making such data available online. A schedule of costs has been published, as well as new rules on access to information. The rollout of the new system to all parts of Russia is expected to be completed by the end of 2012.

A new resolution firmly establishes the principles of state policy on the use of land resources for the period from 2012 to 2017. Among other things, it seeks to streamline the procedures for land privatisation and clarify the powers of various authorities in overseeing both state and municipal land.

A shareholder in a Russian limited liability company (LLC) can ask the courts to exclude another shareholder if the latter is in severe violation of its duties or impedes the LLC's activities. The Supreme Arbitrazh Court is due to give guidance on certain key issues, including whether shareholders can be excluded for causing damage while acting in another capacity, and whether the size of a shareholding affects exclusion.

One of the most recent and far-reaching legislative changes is the revision of pledge and mortgage laws, which significantly amends the procedure for a levy of execution against pledged and mortgaged property and increasing notary fees. Among other things, the new law restricts the use of the procedure for levying execution without recourse to the courts.

Federal legislation has specified the procedure for maintaining a construction permit in the event of transfer of title to a land plot and capital construction facilities. The amendments will undoubtedly have a positive impact on the turnover of land plots, as well as the construction process as a whole, although it remains to be seen how far they will be reflected in practice.

Russia's highest commercial court, the Supreme Arbitrazh Court, recently ruled that where a franchisor with a Russian-registered trademark grants a franchisee an exclusive licence to use that trademark within a defined territory, the exclusive licence does not, by itself, prohibit the franchisor from also using its trademark in that territory.

A new law amends the rights of creditors of limited liability companies in connection with a reduction in the company's charter capital. These rights are significantly restricted and are more consistent with the provisions of the Law on Joint Stock Companies. However, a potential creditor may now, at any time, request information from limited liability companies and joint stock companies on their net asset value.

Russia has a well-established legal framework for advertising and promotion. The general 'truth in advertising' requirements are straightforward and compliance is simple. However, the regulations for contests and sweepstakes are strict and present more of a challenge for both Russian and foreign companies.

A number of business-friendly amendments to the Civil Code will come into force shortly, improving the franchising framework in Russia and simplifying market entry for non-Russian companies. However, despite these positive changes, two significant restrictions will remain in effect.

The Russian State Duma recently gave preliminary approval to a number of business-friendly amendments to the Civil Code regarding franchise agreements. These amendments, which will almost certainly become law, will align Russia more closely with the West with respect to franchise law and will simplify market entry for non-Russian companies intending to conduct franchise operations in Russia.

Although all franchise agreements in Russia must be registered, franchisors and franchisees can commence operations without registration and register their agreement with retroactive effect, sometimes years later. However, deferring registration can have serious disadvantages for a franchisor.

The continuing development of industrial property law, enhanced international cooperation and Russia’s assumption of World Intellectual Property Organization obligations have prompted a revision of the Patent Act. Among other things, the amendments provide increased protection for inventors' rights and classified inventions.

Draft amendments have been proposed with the aim of completely overhauling the Russian Copyright Act. Once adopted, they will bring the act's provisions into line with international IP treaties and conventions, and ensure that the standards of copyright protection applied in Russia are in line with prevailing standards within the European Union.

Two laws, one of which was recently enacted and the other which is still in the pipeline, will significantly revise the law on proprietary rights in Russia. The laws are intended to tackle the widespread problems of unauthorized trademark use, cybersquatting, and goods and trademark piracy.