Invalidity of decisions of general meetings of business entities in Belarus

Since 2024, amendments to the Civil Code of the Republic of Belarus (hereinafter – the Civil Code) significantly adjust the approaches to resolving the issues of invalidation of decisions made by the general of meetings of shareholders. Currently, the norms on the recognition of decisions of general meetings are provided for in the Law “On Business Entities”. 

In particular, the invalidation of decisions of assemblies is indicated as one of remedies. 

Grounds for invalidating decisions of shareholders

By virtue of the amendments to the Civil Code, which will come into force on 19 November 2024, the grounds for invalidating a decision of a meeting will be a violation of the requirements of a legislative act, constituent document or local legal act of a business entity, including:

• a substantial violation of the procedure for convening, preparing and holding the meeting, which affected the will of the meeting participants;

  However, the legislation does not clarify the meaning of “substantial violation”
   

• the person acting on behalf of a participant of the meeting lacked the relevant powers.

Persons who may request the decision of the meeting to be declared invalid

After the entry into force of the amendments to the Civil Code, the relevant demands can be made by the persons specified in Article 182 of the Civil Code, namely:

• a person who was entitled to participate in the meeting but (i) did not participate or (ii) voted against the adoption of the contested decision of the meeting;
   
• a participant of the meeting who voted in favour of a decision of the meeting or abstained from voting, if his/her will expression did not correspond to the real will due to fraud, threat, violence;
   
• other persons for whom the decision of the meeting gives rise to legal consequences.

Cases when decisions of meetings cannot be recognised as invalid

1. if the decision was passed in violation of the procedure, but subsequently confirmed at a meeting held:
   • according to the established procedure and 
   • before a court order is issued. 
      
2. the vote of the person whose rights are affected by the contested decision  of the meeting (i) could not have influenced its adoption or (ii) the decision of the meeting does not entail significant unfavourable consequences for that person.

Consequences of recognising the decision of the general meeting as invalid

Now the Civil Code expressly establishes what consequences are entailed by the recognition of a meeting decision as invalid: transactions and other legally significant actions made on the basis of an invalid decision may also be recognised as invalid in court.

At the same time, legislative acts may establish that the invalidity of a decision entails the invalidity of transactions and legally significant actions taken on the basis of such decision. 

The changes will come into force on 19.11.2024

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