Hands-on Experience pp. 145 -148. Step-by-step work

I.

Read the task and refer to Correspondence Supplement to make sure you remember how to create a letter.

This time you represent your client. So, you start like this:

Dear Mr. X,

The YY firm acts for XZX industries providing legal assistance, so I’m writing to you on behalf and on the request of Mr. K, XZX Managing Director.

II. Scan the text to find out:

• if the Russian law provides certain formalities for shares transactions;

• what forms of Russian companies the information is provided on;

• if there is sufficient information on the regulation of the stock issuance and stock transactions;

• if there is any special information on the peculiarities of a Russian OOO shares and transactions with these shares;

• the steps that are necessary to take if an investor is purchasing the shares of a Russian company;

• if there is any information on the Russian antimonopoly laws governing mergers and acquisitions.

III. In order to write the letter on behalf of your client you are to create the “legend”.

1. your name may be as it is but you are now a lawyer representing a Russian law firm;

2. create a name of your firm like Petrov & Partners Consulting or any other; provide the appropriate heading for the letter – your firm logo – and address;

3. create a name of the Russian company (your client) you act for and provide the company profile – e.g. manufacturing of sports equipment / household appliances / food products.

4. decide on the form of business –joint-stock company (OAO) or limited liability (OOO)

5. create a name of the managing director;

6. decide on the reason – why the foreign investor intends to acquire the stock of the Russian firm (remember this is a friendly operation).

IV. Read the text to decide what information you need according to the form of business of your client and what information you’ll leave out.

Vocabulary task

Match the following words with the definitions

1. securities	a) legally acceptable or sufficient
2. emission of shares	b) sale of securities
3. paid in = paid-in capital	c) issuance of shares
4. challenge a transaction	d) record made in the special registration book
5. entry in a register	e) process of gathering information about the condition and legal status of assets to be sold, analysis and assessment of a business
6. title to a share	f) capital gained from investors for stock
7. participatory shares	g) to object to the validity of an operation
8. placement of shares	h) documents that indicate the ownership: shares, debentures, bonds
9. due diligence	i) legal basis of ownership of a share
10. valid	j) class of shares the holder of which receives not only dividends but the right to participate in the extra profits distribution

Collecting information task

1. Do you need the information in paragraph 1? Which part of it will be useful to mention about?

2. Are you going to mention about the regulation of transactions with securities?

3. Your Russian client’s business is a joint-stock company with the registered stock issued as share certificates (documentary form). Does the foreign investor have to know that:

• the stock is registered with the RF FCSM?

• he/she make sure that the shares are fully paid in?

• non-documentary shares exist as entries in the registry, and in order to receive a title to such share a relevant entry must be filed?

4. Your Russian client’s business is a joint-stock company with the registered stock which exists in non-documentary form. Does the foreign investor have to know that:

• the stock is registered with the RF FCSM?

• he/she make sure that the shares are fully paid in?

• non-documentary shares exist as entries in the registry, and in order to receive a title to such share a relevant entry must be filed?

• he/she must receive an extract from the shareholders registry in order to make the transaction valid?

5. Your Russian client is a limited liability company with the stock in participatory shares. Does the foreign investor have to know that:

• participatory shares do not need registration?

• he/she make sure that the shares are fully paid in?

• a lot of formalities must be observed in order to make an investor a participant of the limited liability company?

6. Are you going to write about all the steps that must be taken by a purchaser?

7. Is it important to inform the foreign investor about antimonopoly law in Russia? Why?