The law establishes liability for the submission of false data to the Unified State Register of Legal Entities, resolutions of general meetings of participants (shareholders) or the boards of directors of business entities

Pepeliaev Group advises that Federal Law No. 147-FZ dated 1 July 2010 entered into force on 5 July 2010. The Law establishes criminal liability for the submission of false data to the Unified State Register of Legal Entities, register of holders of securities, depositary accounting system, as well as for the fabrication of the resolutions of general meetings of shareholders (participants) or a board of directors (supervisory board) of a business entity.

This law adds to the Russian Criminal Code a number of new constituent elements of an offence relating to state registration, accounting for title to securities, and also implementation of corporate procedures and the execution of the relevant final documents.

For example, article 170.1 of the Russian Criminal Code stipulates two new constituent elements of offence: first, the submission of documents to the agency responsible for state registration of legal entities and individual entrepreneurs or to the agency that registers title to securities, which contain intentionally false information in a bid to enter unreliable information in the registers or the depositary accounting system or with any other aim relating to the acquisition of title in a third party’s property; second, entry in the registers or the depositary accounting system of intentionally false information through unauthorised access thereto. The law establishes liability for these offences in the form of a fine of up to RUB 300,000, or imprisonment of up to 2 years and a fine of up to RUB 100,000.

Article 185.2 of the Russian Criminal Code has been amended with a provision establishing liability for the entry of inaccurate information in the register of holders of securities, as well as the intentional destruction or forgery of documents, based on which entries are made to the register. Liability is established for such an offence in the form of a fine of up to RUB 300,000, or imprisonment of up to 2 years, including disqualification in respect of certain positions or certain activities and a fine of up to RUB 100,000.

The law introduces a new article 185.5 of the Russian Criminal Code, which establishes liability for violations made during the general meeting and the meeting of the board of directors of a company, as well as during the execution of final resolutions, minutes of meetings and other documents. The law establishes liability for distorting the voting results or preventing individuals from voting at the general meeting or at the meeting of the board of directors by compiling intentionally false documents or intentionally false lists of the individuals entitled to participate in voting, for restricting access to the voting rooms, failing to submit information about the meeting, submitting unreliable information about the meeting or voting under a forged power of attorney. A precondition for imposing liability is the intention to usurp the management of a business entity by approving transactions, amending the charter, replacing management, restructuring or liquidation.

Liability is established for such an offence in the form of a fine of up to RUB 300,000, including disqualification from certain positions or certain activities, or imprisonment for up to 2 years and a fine of up to RUB 100,000.
Acts of coercion, blackmail, violence or threats in respect of a shareholder, participant in an LLC or a member of the board of directors constitute aggravating circumstances, which increase the punishment.

The law establishes separate liability for officials for entering internationally false data into state registers and also for the intentional destruction or forgery of documents based on which entries are made to the register (article 285.3). Such violations are penalised with a fine of up to RUB 80,000, or disqualification from certain positions or certain activities, or imprisonment for up to four years.

In general, the new amendments, being an extension of the recent anti-raider campaign, increase liability and enhance legal regulations in the corporate sector.