Agreement Writing

An agreement is an important component not only in your business but in your daily life as well. All of us conclude some type of agreement or other every single day. Those are most often sale-purchase agreements when we buy goods at a store. Such an agreement doesn't even require participation on the customer's part. However, when it comes to more serious things that require significant financial expenditures or reflection on terms of cooperation between different parties, the issue of writing up an agreement and working though each of its items in detail must be taken very seriously to ensure your interests are taken into account.

Civil law only explains general provisions on writing up agreements, indicating essential terms but providing no explanations as to how the parties are to behave in particular situations. They do not indicate which specific terms and conditions to envisage and which not to. The law stands on the principle of freedom of agreement. Consequently, when disputed relations arise between parties, upon a detailed examination of the terms of an agreement, it turns out that the parties did not envisage certain essential tools, such as penalties for failing to fulfill or improper fulfillment of the agreement, the ability to and conditions under which the agreement can be terminated, or suspension of the fulfillment of obligations by one of the parties to the agreement in the event of unscrupulous behavior by the other party.

Furthermore, in the reality of the quickly evolving world and developing technology that we live in, new forms of interaction are arising and, thus, new forms of agreements as well, which are not envisaged by civil law but require proper coordination.

Avoid using templates that various websites provide. It often occurs that such template agreements do not correspond to the provisions of the law, have become obsolete, or are too primitive for your situation.

Often times, we unfortunately hear from our principals that in light of friendly relations, already knowing each other, having a limited amount of time, or for other reasons, the parties failed to devote proper attention to the development and coordination of agreement terms, downloading a template from the Internet and signing it “on the fly”. In the event of a conflict, that not only leads to major monetary losses, but also ruptures in the closest of friendships.

We recommend approaching this responsibility and paying proper attention to the process of writing up the agreement and developing its terms to keep situations of dispute to an absolute minimum. You'd be well advised to consult a lawyer for assistance, since the specialist will write up the agreement based on the specifics of your operations, will keep your demands in mind, and ensure your interests are protected all the while saving you time and money in the event that a dispute situation arises in the future.

We propose writing up the following types of agreements:

• partner agreements;
• supply agreements;
• sale-purchase agreements;
• agent agreements;
• fee-based services agreements;
• contractor agreements;
• loan agreements;
• rental agreement (lease).

Writing up a corporate agreement

In the work that they do, everywhere organizations’ lawyers encounter the need to write up and analyze corporate agreements on the subject of maximum protection of the rights of specific people and keeping in accordance with the laws of the Russian Federation.

So-called “corporate” agreements can be categorized as a special variation of civil agreements. They are structurally broken down into agreements designed for creating corporate relations (for instance, founding agreements, incorporation contracts, merger agreements, and acquisition agreements) and agreements designed to change corporate relations (stock sale-purchase agreements and sales-purchase agreements for shares in a reserve capital, etc. fall under this category).

Included in the first group are standard documents; they are developed at our company as well and are designed to create a new legal relations subject. Incorporation and creation contracts are signed by the founders of business entities and show the uncompromising intention of the founders to combine their capital for the purposes of creating a new legal entity or to become acquired by an already existing legal entity in a legal succession procedure.

As far as agreements designed for corporate relations changes, it's worth going a bit further on that topic, because they have a peculiar nature. For instance, in writing up a sale-purchase agreement for shares, the constitutional document provisions regarding the ability to sell shares to third parties always need to be taken into account. In this aspect, we examine closed joint-stock companies, as far as in open joint-stock companies, membership is open. The articles of association of a closed joint-stock company may prohibit sales “to the outside”. This is reasonable, because they want to protect the company from so-called “hostile takeovers”. If the articles of association does allow the sale of shares to third parties, in any case it is necessary to observe the right to first refusal. Such a right is also envisaged in Federal law “On limited liability companies”. The essence of this provision ensures that any shareholder or stockholder that wishes to sell their shares or stock in the reserve capital must initially offer their shares or stock to be bought by the other founders or shareholders at the same price and on the same conditions as will subsequently be offered to the third party. This rule is envisaged by law and failure to observe it may lead to the transaction being disputed.

Joint-stock companies conduct a register of shareholders. A register is an internal document. It can be conducted at the company itself or an independent register administrator can conduct it for them. For this reason, sale-purchase agreements don't require any government registration or require any notarization. They are written up in simple written form.

It must also be noted that an agreement must also indicate the payment details of the organization whose shares are being sold, the quantity of the shares, their cost, and the information of the shares registration notice in the Federal Financial Markets Service. The shares must obligatorily be registered. Unregistered shares cannot be sold.

Unlike a sale-purchase agreement, a sale-purchase agreement of shares in a reserve capital is subject to obligatory notarization and is sold along with a change introduction form not related to the introduction of any changes to the incorporation documents (P14001 form) submitted to the corresponding tax inspectorate. A change in the constitution of the shareholders is reflected in a statement from the Unified State Register of Legal Entities. In this type of registration, the filer acts as a shareholder salesman. Under the certification of a sale-purchase transaction for a share in the reserve capital, a notary must obligatorily check whether the other shareholders refused to buy the share.

If the transaction is implemented under the right of first refusal of the purchase, no notarization is required, and the agreement is written up in simple written form and submitted to the tax inspectorate for registration along with the decision and a P14001 form.

Our company's specialists will consult you on issues regarding the writing of sales-purchase agreements for shares and stock in the reserve capital and will not only write up agreements but also the accompanying documents (notices, purchase notifications, decisions, general shareholders meeting minutes, etc.), including on all issues related to introducing changes into the Unified State Register of Legal Entities.

We've accumulated substantial experience preparing documents for upcoming sales-purchase transactions for shares in reserve capitals subject to notarization. Our lawyers fully assume all the hassle of writing up and obtaining the necessary documents, coordinate the document package and document contents in advance with the notary, and schedule a convenient time for the client to sign the corresponding document.

This is not an exhaustive list. These are the main documents that our clients most frequently request.

Specialists at “Word & Law, LLC” (“Pravo i Slovo,” LLC), are ready to help you write up proper agreements and answer all of your questions. We will be happy to hear from you!