RESOLUTION OF BUREAU OF INTER-PARLIAMENTARY ASSEMBLY OF EURASIAN ECONOMIC COMMUNITY

of May 13, 2009 No. 6

About Recommendations about harmonization of the corporate legislation of state members of EurAsEC (on the basis of the comparative and legal analysis of national legal systems)

The bureau of Inter-parliamentary Assembly decides:

1. Approve the draft of Recommendations about harmonization of the corporate legislation of state members of EurAsEC provided by the Permanent commission of MPA on economic policy it (is applied).

2. Submit Recommendations in parliaments of state members of EurAsEC and Integration Committee for use in work on harmonization of national legal systems and enhancement of the legal base of Community.

Appendix to the resolution of EurAsEC MPA Bureau of May 13, 2009 No. 6

Recommendations about harmonization of the corporate legislation of state members of EurAsEC (on the basis of the comparative and legal analysis of national legal systems)

In modern economic circulation joint-stock companies are method of concentration of the capital.

Permanent growth and development of economy need investments, and traditionally in world practice joint-stock companies act in an efficient manner concentration of free resources. Transition of state members of EurAsEC to the market relations allowed to extend widely to joint-stock companies which at once demanded legislative regulation for legalization of the activities.

The problem of improvement of the corporate legislation always attracts keen interest from business, public organizations, state bodies of legislative and executive power. It is connected also with the fact that development of the corporate sector requires attraction of considerable investments both external, and internal.

Questions of management efficiency, profitability and openness of the company, ensuring protection of shareholder rights have essential value in case of assessment of investment appeal of the separate company that cannot but influence decision making about investment into economy of the state in general. At the same time shareholder rights and their protection are provided, first of all, with due statement of corporate management which assumes timely and exact disclosure of information on all existing questions concerning the company including financial position, results of activities, property and company management.

High level of corporate management allows to reduce risks of investors, promotes attraction of financial resources in the form of investments for development of effectively working companies, increasing their investment appeal.

In spite of the fact that national joint-stock legal systems of state members of EurAsEC in general are drafted rather fully, it is impossible to call existing rules ideal - unresolved is number of questions. The carried-out comparative and legal analysis of national legal systems of the states of Community confirms inconsistency and incompleteness of existing rules. In this connection the following practical recommendations are developed:

1. It is reasonable to develop the single list of fundamental terms and legal categories of corporate regulation of state members of EurAsEC which will promote its unification and to have practical value when making cross-border transactions with participation of partners of the parties.

2. For increase in efficiency of use of concept of affiliation in case of regulation of the corporate relations, it is offered to establish the single standard of affiliation. For this purpose it is necessary to concretize the list of the bases of affiliation and to develop accurate criteria of reference of these or those persons to affiliates, having included the relevant standards in national legal systems of the states of Community. Besides, it is necessary to differentiate circle of affiliates depending on the purposes of different legal institutions.

It is offered to appropriate certain categories to situations of affiliation of persons depending on subject to regulation. The main directions of regulation of the corporate relations in which determination of affiliation of persons is necessary:

- disclosure of information on society for shareholders, investors and other concerned parties;

- disclosure of information for regulation of transactions on acquisition and sale of shares of society, and also reorganization of joint-stock company;

- disclosure of information for regulation of transactions with interest.

3. The number of board members optionally shall depend on number of shareholders as it occurs according to provisions of national legal systems of gosudarstvchlen of EurAsEC now. For the purpose of ensuring development of long-term policy and availability of stable structure of the board of directors it is reasonable to increase term of office of board members up to 5 years. Besides, it is offered to fix legislatively the procedure of election of board members by cumulative vote.

4. Reorganization - one of the most widespread methods of optimization of structure of production and property. However the legislation of state members of EurAsEC does not allow to use benefits of this procedure fully. With respect thereto it is offered to expand in details general regulations of Civil codes and special regulations of joint-stock legislations of state members of EurAsEC on reorganization and liquidation.

5. It is necessary to determine the bases of liquidation of the companies accurately. The companies shall stop the activities as a result of bankruptcy or by voluntary liquidation, but not through involuntary liquidation in case of lack of the authorized capital provided by the joint-stock legislation since the situation when the company does not have the authorized capital is quite possible, but to have good liquidity and to perform economic activity.

6. For the purpose of enhancement of corporate regulation, considering the "Principles of corporate management" developed by Organization for Economic Cooperation and Development (OECD) it is offered to affirm at the legislative level the right of employees of the company to participation in cases of society, participation of minority shareholders in adoption of decisions, important for the company, carrying out consultations with creditors, suppliers and the state, introduction of several independent members in structure of the board of directors.

7. In national legal systems of state members of EurAsEC there is no effective mechanism of application of sanctions in case of failure to provide to shareholders of complete and reliable information about activities of society.

With respect thereto it is offered to give authority to determine whether this or that information shall reveal and watch quality of disclosed information the professional organization which will shall be under the supervision of state bodies and its activities it shall be licensed.

8. Recommend to the Kyrgyz Republic, the Republic of Tajikistan and the Republic of Uzbekistan to develop the Code of corporate governance which provisions shall have advisory nature and be based on the "Principles of corporate management" recognized in the international practice developed by OECD.

Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info