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15East European Scientific Journal #1(65), 2021 41
ЮРИДИЧЕСКИЕ НАУКИ
Alena Salei23, Liudmila Tsarova24 INITIATIVES FOR RENOVATION OF BELARUSIAN CORPORATE LAW
Abstract. The article analyzes the innovations and planned amendments to the legislation on legal entities in Belarus, provides their critical assessment from the standpoint of doctrine and practice, demonstrates through a comparative analysis the specificity of Belarusian approaches among others in relation to the Member States of the Eurasian Economic Union. The authors positively evaluate the initiatives on renovation of the Belarussian corporate law in terms of conflict of laws and filling the gaps in law on economic companies. However, the authors criticize some proposals on systematics of legal entities and indecisiveness in terms of modernization of legal regulation of joint stock companies.
Keywords: civil law of Belarus, corporate law, legal entity, economic companies, status of a legal entity, law applicable to the contract for the exercise of rights of a company participant.
Introduction. The current processes of updating of the basic legal regulations that define legal status of legal entities objectively predetermine the question about the state and prospects of corporate law in Belarus25 in the context of global trends.
The Law "On Amendments to Laws on Economic Companies"26 (hereinafter, the Law of 5 January 2021) was passed on 5 January 2021 and will apply as of 28.04.2021. It introduces amendments to three pieces of legislation, namely: the Civil Code of the Republic of Belarus (hereinafter, "Civil Code"), the Law "On Economic Companies" (9 December 1992) and the Law "On Securities Market" (5 January 2015).
The Civil Code, adopted in 1998 and enshrining the basics of legal regulation of all types of legal entities, is under a cross-cutting complex revision. The practice of application, introduction of new civil law institutions and unification of legislation in the Eurasian Economic Union (hereafter - EAEU) Member States are the normatively established tasks of the revision and improvement of the Civil Code, including regulations on legal entities. The expected results of the renovation are presented in the Draft Law of the Republic of Belarus "On Amending Certain Codes of the Republic of Belarus"27.
Finally, at the end of 2019, a Draft Law on state registration and liquidation (termination of activity) of business Associations28 was presented for public discussion. The draft law aims at comprehensive improvement of legal regulation of state registration and liquidation procedures for companies.
Based on general assessment of the current national legislation on corporate legal entities, the article analyzes the prospective directions of its substantive and conflict of laws regulation changes in the context of compliance with modern trends of corporate law development.
Systematics of Legal Entities. Initially, attention should be paid to the lack of literal categorical terminology of corporate law in the current national legislation. The Civil Code does not legalize such concepts as "corporation", "corporate relation", "corporate law", "corporate governance".
Within the framework of the Civil Code improvement, it is only proposed to expand the subject of civil law regulation by supplementing it with "relations connected with participation in legal entities or with their management", i.e., in essence, with corporate relations. More significant changes in legalization of corporate law categories have not been planned.
As a consequence, typical for the Russian Federation issue of legalization of types classification of legal entities depending on the way of their management into corporate (whose founders have the right of participation (membership) in the entity and form its supreme body) and unitary (whose founders do not become participants and do not acquire membership rights) is not raised at this stage either. This is not only because of the debatable concepts in the doctrine and very different approaches in the Continental and Common law systems, but also due to
23 PhD in Law, Associate Professor at the Department of Civil Law of the Law Faculty, Belarusian State University E-mail: esalei@tut.by
24 PhD in Law, Associate Professor at the Department of Civil Law of the Law Faculty, Belarusian State University E-mail: Tsareva@bsu.by
25 The emergence of corporate law in the Republic of Belarus with a fair degree of conventionality is associated with the acquisition of the status of an independent state in 1991.
26 On Amendments to Laws on Economic Companies: Law of the Republic of Belarus, 5 January 2021 available in Russian at https://pravo.by/document/?guid=12551&p0=H12100095&p1=1&p5=0.
27 On Amending Certain Codes of the Republic of Belarus: Draft Law of the Republic of Belarus (2018), available at http://forumpravo.by/files/nczpi_zakon_proekt_izmenenija_v_kodeksi.pdf.
28 On State Registration and Liquidation (Termination of Activity) of Business Associations (2019), available at https://forumpravo.by/files/Proekt_Zakon_Gosregistracija_i_likvidacija.pdf.
42 East European Scientific Journal #1(65), 2021 the unpreparedness of the national legislator for a comprehensive reform of the systematization of legal entities associated with the introduction of classification on this basis.
The classification of legal entities into commercial and non-commercial proposed by the Model Civil Code for the Member States of the Commonwealth of Independent States29 and uncommon for non-CIS countries remains system forming in Belarusian legislation30. The Civil Code retains the current approach to the criteria of classification of legal entities into commercial and non-commercial depending on the purpose of the activity and the possibility of profit distribution among participants (clause 1 of article 46 of the Civil Code).
In an attempt to implement at the Civil Code level the numerus clausus principle not only in relation to commercial but also for non-commercial legal entities, the authors of the draft law on amendments to the Civil Code proposed a reduced (compared to the current version31) list of five organizational and legal forms for commercial organizations as well as formed a closed list of 18 forms for non-commercial organizations.
The reduction of the number of forms of commercial organizations in Belarus is proposed by eliminating such a legal form as business partnerships. Authors of the draft amendments to the Civil Code excluded the possibility of creating a commercial organization in the form of a business partnership (general or limited) on formal grounds of irrelevance in practice. Namely, they stressed out that since the Civil Code came into force in Belarus only three business partnerships have been created (one general partnership and two limited partnerships)32.
Unfortunately, such consideration of practice seems to be superficial. A number of both objective and subjective circumstances predetermines the lack of demand for business partnerships. In particular, legislation restricts participation in business partnerships by allowing only individuals registered individual entrepreneurs and (or) commercial organizations to be participants in general partnerships and general partners in limited partnerships. Together with the joint and several nature of full subsidiary liability of participants with their own property for obligations of the partnership and absence of tax advantages, this leads to the lack of use the organizational and legal form of a business partnership in Belarus in practice.
29 Model Civil Code of the Commonwealth of the Independent States (29 October 1994), available at https://iacis.ru/baza_dokumentov/modelnie_zakonodat elnie_akti_i_rekomendatcii_mpa_sng/modelnie_kode ksi_i_zakoni/400
30 For more details, see: Alena Salei, "Institut juridicheskogo lica v Grazhdanskom kodekse
Respubliki Belarus': sostojanie i perspektivy razvitija",
(1) Journal of the Belarusian State University. Law (2019), 23-31, available at
https://elib.bsu.by/handle/123456789/231400.
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In addition, at this stage the argument about the lack of demand for business partnerships in practice is not convincing without assessment of the sphere of application (mainly small business), key characteristics of the organizational and legal form (simplicity of creation and functioning, the trusting nature of relations between participants) and the degree of recognition (recognition in foreign countries).
The legislator's initiative to establish a list of 18 forms of non-profit organizations also requires serious consideration.
There is no doubt that the current legal situation when the list of forms of non-commercial organizations is not established by the Civil Code, but rather is conditionally regulated by the framework of legislative acts (laws, decrees and edicts of the President of the Republic of Belarus) should be changed. The reason for this is the lack of certainty about the possible forms of functioning of non-commercial legal entities, and, accordingly, the problems with determining their civil law status and correlation with other forms of legal entities.
At the same time, it is unlikely that fixing of all types of non-commercial organizations provided by the special legislative acts in the Civil Code can streamline and systematize the list of possible forms of noncommercial legal entities. We find it unreasonable to single out such forms as gardening partnerships, Belarusian Chamber of Commerce and Industry, Belarusian Notarial Chamber and the National Academy of Sciences of Belarus. In line with the structure of paragraph 5 ("Non-commercial Organizations") of chapter 4 ("Legal Entities") of the Civil Code, advocates' bureaus and bar associations function as a united form (article 116-3 of the Civil Code) and public associations and religious organizations are preserved as a united organizational and legal form of non-commercial organizations (article 117 of the Civil Code). This is not justified from the viewpoint of essential evaluation and specificity of such legal entities.
The doctrine has repeatedly pointed out the inadequacy of artificial proliferation of organizational and legal forms of legal entities when legalizing their full list. Professor N. S. Kuznetsova, in particular, is of an opinion that different types of private law legal entities can exist within just two forms - companies and institutions, and there should be no other forms in legal reality33. While working on the concept of the
31 More about the system of commercial legal entities see Liudmila Tsarova, Ingeborg Bauer-Mitterlehner, Die Rechtsformen der Gesellschaften in Belarus, Wirtschaft und Recht in Osteuropa=WIRO, (8) 2020. -Heft 8, 225-229.
32 Justification for the adoption of the Law of the Republic of Belarus "On Amending Certain Codes of the Republic of Belarus" (2018), available at https://forumpravo.by/files/nczpi_zakon_proekt_izme nenija_v_kodeksi_obosnovanie.pdf.
33 Nanalija Kuznecova, "Ponjattja i klasifikacija juridichnih osib u civil'nomu pravi Ukrai'ni: teorija i
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development of civil legislation on legal entities in the context of the legal regulation of non-profit organizations, Professor E. A. Sukhanov wrote:
"[E]ach law in this area creates a new organizational and legal form - a political party, trade union, public organization, trade chamber, bar association ... In fact, it is not about new organizational and legal forms of legal entities, but about a type of a corporate association"34.
The author also rightly emphasizes that "the diversity of socially useful activities carried out by noncommercial corporations does not affect their civil legal status and therefore excludes the need to distinguish them as special types of legal entities"35. Nevertheless, there is "a clearly excessive number of organizational and legal forms of non-profit organizations"36 in the Russian legal system even after the reform of the civil legislation of 2014. This is likely to become characteristic also for Belarus.
Economic companies. Before characterizing directly the initiatives on changing the law on economic companies, it is necessary to pay attention to the fact that from the standpoint of legal regulation Belarus belongs to the states with a uniform legal regime for all economic companies. From the standpoint of legal technique, it means that all types of economic companies are regulated by one normative legal act rather than by separate pieces of law. Belarus implemented such a model of regulation of companies back when the Law "On Joint-Stock Companies, Limited Liability Companies and Companies with Additional Liability" was adopted on 9 December 1992. This model is preserved to this day in the law with a more concise title "On Economic Companies" in which seven chapters are taken out of brackets and form a common part for all types of economic companies.
Belarus is the only country that has adopted the "one-law model" in the EAEU. Among the EU countries a similar approach takes place in the UK (Companies Act 2006), Sweden (Swedish Companies Act 2005), Denmark (Danish Companies Act 2010), Spain (de la Ley de Sociedades de Capital 2010) and some other countries. The draft European Model Company Act (The European Model Company Act 2015 (EMCA)) was also developed by an expert group on the basis of the "one-law model"37 despite the fact that many countries of the EU adhere to dualism in the
East European Scientific Journal #1(65), 2021 43 regulation of private and public companies, following mainly the German model of complete separation of the two legal regimes.
Without dwelling on the advantages and disadvantages of any particular model, we agree with corporate law experts that the "one-law model" is typical for countries with relatively mild and liberal shareholder laws38, while the distinction between regulation of public joint stock companies and private companies more often exists in those countries where the issue of ensuring the necessary degree of autonomy in the conditions of "regulated joint stock companies"39 is more relevant.
The type classification of economic companies in Belarus is well established and has not changed since the initial "modern" legalization in the early 1990s. It includes a joint stock company (akcionernoe obshhestvo, hereinafter - AO), a limited liability company (obshhestvo s ogranichennoj otvetstvennost'ju, hereinafter - OOO) and an additional liability company (obshhestvo s dopolnitel'noj otvetstvennost'ju, hereinafter - ODO).
In practice, the most popular type of business company is OOO. According to the Ministry of Justice, out of 8,725 economic companies created in 2018 in Belarus, 8,675 (more than 99%) were OOOs, 41 were AOs and only 9 were ODOs. Moreover, OOOs are the only type of economic companies the number of which has been growing rather than decreasing over the past five years40. The factors that predetermine the demand for OOOs are obvious: clear and understandable organizational structure including for foreign investors, mechanism for limiting the liability of participants by their contributions to the authorized capital, possibility of alienation of share and withdrawal from the membership, low monetary and time costs at the registration stage, including no legally established minimal amount for authorized capital. OOOs strictly belong to commercial organizations and must be aimed at profit making, which is one of the differences from the Western legal systems where LLCs can be established for any purpose.
Not surprisingly, ODOs are more than 160 times less demanded than OOOs. ODOs as a type of economic companies began to lose popularity after the entry into force on 1 February 2009 Presidential Decree No. 1 of 16 January 2009 "On State Registration and
praktika" in Nanalija Kuznecova (ed.), Vibrani praci (Kyiv, Juridichna praktika, 2014) at 348.
34 Evgenij Sukhanov, "O koncepcii razvitija zakonodatel'stva o juridicheskih licah", (1) Zhurnal Rossijskogo prava (2010), 5-12, at 7.
35 Evgenij Suhanov, "O sistematike juridicheskih lic v sovremennom rossijskom prave" in Dmitrij Medvedev (ed.) Kodifikacija rossijskogo chastnogo prava, 2019, 83-96.
36 Ibid.
37 The European Model Company Act (EMCA), Draft
2015, available at
https://law.au.dk/fileadmin/Jura/dokumenter/forskning
/projekter/EMCA/EMCA_Introduktion.pdf.
38 Fleischer Holger Die geschlossene Kapitalgesellschaft im Rechtvergleich// Research Paper Series N 16|21, 63.
39 "Korporativnoe pravo v ozhidanii peremen : sbornik statej k 20-letiju Zakona ob OOO" Aleksandr Kuznecov (ed.). - (Moscow : M-Logos, 2020), 4.
40 While as of January 1, 2016 there were 50,371 registered OOOs, at the beginning of 2020 this figure was 65,203// "Statisticheskij ezhegodnik Respubliki Belarus', 2020. (Nacional'nyj statisticheskij komitet Respubliki Belarus', 2020) available at https://www.belstat.gov.by/ofitsialnaya-statistika/publications/izdania/public_compilation, 196.
44 East European Scientific Journal #1(65), 2021 Liquidation (Termination) of Business Associations," which repealed the regulatory minimal amount for authorized capital for OOOs and ODOs. Before that, when the difference between the minimal amounts for authorized capitals of OOO and ODO was significant and amounted to approx. 1200 Euro, the choice in favor of ODOs was a tangible advantage at the stage of business registration. This was reflected in the number ODOs. The disappearance of such a difference together with the existing subsidiary liability of ODO participants (although the legislatively established minimal amount of such liability is very conditional and formal; under the current legislation it amounts to 50 basic units, or approx. 450 Euro) explain the sharp decline in interest in ODOs in practice. Nevertheless, Belarusian legislator did not follow the example of the Russian Federation where a similar type of business entities was abolished as part of the 2014 reform.
The number of newly created AOs in Belarus is relatively small, since the creation of AOs in Belarus (if they are not banks and insurance organizations, where the form is predetermined by law) is mainly connected with reorganizations in the process of privatization of state unitary enterprises. Statistics show that the total number of AOs has decreased over the last five years from 4,001 in 2016 to 3,528 in 202041. There is no doubt that the most significant impulses for the development of a big business, for which the organizational form of AO is conceived, are the economic and political situation. At the same time, the legal design of the AO structure is also important.
The draft law on amendments to the Civil Code retains the traditional distinction between open joint-stock companies (otkrytoe akcionernoe obshhestvo, hereinafter - OAO) and closed joint-stock companies (zakrytoe akcionernoe obshhestvo, hereinafter - ZAO) depending on the procedure of placement and circulation of shares. Besides that, the law preserves some distinctive features of ZAO. First, the statute of ZAO may set limits of the number of shareholders. Secondly, the statutory minimal amount for authorized capital for ZAO is 4 times less than for OAO. At the same time, the Law of 5 January 2021 removes one of the main distinctions between closed and open joint stock companies. It is to allow free allocation of ZAO shares as a general rule. The preemptive right of shareholders to buy out ZAO's shares may be provided by the statute of the company (new wording of article 97 of the Civil Code and article 73 of the Law on Economic Companies). We believe that these changes should be regarded as the first step of the legislator to
abandon the division of joint stock companies into closed and open in favor of the division into public and non-public companies depending on the order of stock allocation as a general trend in the development of corporate law.
Corporate governance. In unison with global trends where "we saw a powerful global tide towards higher standards in corporate governance"42, Belarusian legislator pays attention to corporate governance issues. Unlike in many countries where such regulations of soft law nature as the "Guide to Corporate Governance Practices in the European Union"43, German Corporate Governance Code44, Code of Corporate Governance of the Russian Federation45 are widespread and recognized, the main source of legal regulation of corporate governance issues in Belarus is Chapter 4 of the Law on Economic Companies "Bodies of Economic Companies. Management in an Economic Company". Significant changes and additions, which are made to the regulations in terms of quantity and content, basically aim at elimination of the gaps and contradictions revealed by the practice.
In particular, the new provisions, amending the articles on the legal status of the board of directors (supervisory board) of the economic company establish possibility for members of board of directors (supervisory board) to be present at meetings remotely by using distance service systems, to appeal decisions of board of directors (supervisory board), to early terminate powers of a sole executive body and a member of the joint executive body of economic company without decision of the general meeting of participants or the board of directors. Such provisions fill in the existing gaps in the regulations.
At the same time, the important practical issue remains unsettled, of whether it is permissible to challenge the decisions of the Board of Directors (Supervisory Board) on the conclusion of a major transaction (if it is within its competence) without challenging the transaction itself. The legalized list of cases for early termination of powers (death, declaration of death, recognition as incapable or missing) does not take into account the concept of a limited legal capacity of an individual, known in Belarusian law. The provided by law (Civil Code) scope of legal capacity, including transactional capacity, of a person recognized as a person with limited legal capacity will not allow him (or her) to perform functions of the executive body of economic company.
41 Ibid., 196.
42 Jean du Plessis, Ingo Saenger, "Corporate Governance in the EU, the OECD Principles of Corporate Governance and Corporate Governance in Selected Other Jurisdictions", in German Corporate Governance in International and European Context: Thirt Edition. (Springer, 2017) at 518.
43 A Guide to Corporate Governance Practices in the
European Union available at
https://www.ifc.org/wps/wcm/connect/506d49a2-
3763-4fe4-a783-
5d58e37b8906/CG_Practices_in_EU_Guide.pdf?MO D=AJPERES&CVID=kNmxTtG.
44 German Corporate Governance Code available at https://www.dcgk.de/en/code/fbreword.htmL
45 Kodeks korporativnogo upravlenija Rossijskoj Federacii available at http://www.oecd.org/daf/ca/RussianCodeofCorporate Governance2014Russian.pdf.
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Shareholders' agreements and agreements on the exercise of rights of LLC participants (corporate agreements), that are widely recognized by foreign legislation and practice, were legalized as supplementing mechanisms for regulating relations between business partners, in Belarus in 2015. However, so far they have not become widespread due to potential problems with their enforceability against the background of predominantly imperative legislation on economic companies, including imperative provisions on the pre-emptive purchase right. Taking into account the established practice (contrary to the generally accepted approach in the doctrine) the pre-emptive purchase right in Belarus also applies to the sale of shares (stakes in the authorized capital) to one of the participants of the corporation. Currently in force restrictions in relation to the parties also play a certain role: all the participants (shareholders) of the corporation, as well as the company itself cannot be parties to corporate agreement at the same time. Currently, only the residents of the High Technology Park (HTP) are excepted from this rule and have the right to enter into corporate agreements concluded between all participants with the participation of the HTP residentcompany itself46. The restrictions on the admissibility of shareholder agreements by all members of the company will be removed with the entry into force of the law of January 5, 2021 (as of 28 April 2021). This innovation in conjunction with the fixation of dispositive preemptive right of purchase in the alienation of shares to a company participant and options should activate the use of shareholders' agreements.
Conflict of laws. The archaic (in contrast to the substantive law) issues of conflict of laws are currently of a particular relevance in the context of the relations under the study47.
Conflict of laws initiatives in the area of legal entities regulations have touched upon corporate agreements and the scope of the law applicable to companies (lex societatis).
The current conflict of laws legislation (the Civil Code has a separate section "Private International Law" which has not undergone any significant changes since its adoption) does not contain special rules on determining law applicable to contracts related to the exercise of rights by participants of a corporate organization. Taking into account the imperative subordination of the law applicable to legal entity (Article 1111 of the Civil Code) and to the agreement on the forming of a legal entity (Article 1126 of the
East European Scientific Journal #1(65), 2021 45 Civil Code) to the law of the place of establishment, the lack of special rules on determining law applicable to a corporate agreement causes debates in doctrine. This also complicates the practice of resolving issues related to the possibility of party autonomy in corporate agreements and distinguishing the scope of the applicable law to legal entity and to the corporate agreements.
When it comes to the possibility for corporate agreements concluded by the participants of Belarusian economic companies to be subject to foreign law, according to the dominant position at the initial stage of cross-border agreements regulation development, all the relations of participants (shareholders) of an economic company established in Belarus should be governed by Belarusian law.
The opposite position is based on the fact, that a contractual nature of corporate agreements predetermines the right of the parties to choose the law applicable to their relations. Supporters of this approach do not dispute the connection of corporate agreements with internal relations of a legal entity regulated by the law of its state affiliation and give the law of the legal entity the role of limiting the party autonomy due to the need for shareholders (participants) to comply with imperative norms relating to the essential issues of creation, activity and legal capacity of legal entity48.
The proposed innovations in article 1126 of the Civil Code reflect the latter position and empower the parties to subject the contract on exercising the rights of the company's participants to foreign law. At the same time, the legislator limits the party autonomy. The law applicable to the contract on the exercise of the rights of a participant of a legal entity cannot affect the imperative provisions of the law of the country of registration of the legal entity in relation to the issues regulated by the law of the legal entity.
The law of the country where a legal entity is incorporated will serve as a special connecting factor for determining the law applicable to a corporate agreement where the parties have not agreed on applicable law. This will ensure the uniform legal regulation of relations between the parties to corporate agreement and closely related internal relations of the company imperatively governed by the law of the legal entity.
In addition, the Draft Law on Amendments to the Civil Code eliminates the gap of the regulation of the scope of the law of a legal entity by providing an open list of relations regulated by the relevant statute in art. 1112 of the Civil Code. According to the new wording,
46 On the development of the digital economy: Decree of the President of the Republic of Belarus, 21 December 2017 № 8, available in English at http://law.by/document/?guid=3 871&p0=Pd1700008e
47 Jürgen Bazedov, "Liberalizacija priznanija
inostrannyh kompanij", in Jürgen Bazedov (ed.) Pravo otkrytyh obshhestv - chastnoe i gosudarstvennoe regulirovanie mezhdunarodnyh otnoshenij: Obshhij kurs mezhdunarodnogo chastnogo prava (Moskva :
Jur.Norma, 2016, translated from The Law of Open Societies - Private Ordering and Public Regulation in the Conflict of Laws by Ju. M. Jumashev), 337-346. 48 Alena Salei, Liudmila Tsarova, "Sovershenstvovanie kollizionnogo zakonodatel'stva o juridicheskih licah v svete reformirovanija grazhdanskogo kodeksa Respubliki Belarus" (4) Justicija Belarusi (2018), 1822, at 20.
46 East European Scientific Journal #1(65), 2021 personal law of a legal entity determines, in particular, its status as a legal entity; organizational and legal form of a legal entity; requirements to the name of a legal entity; nature and content of legal capacity of a legal entity; powers of bodies of a legal entity; internal relations, including relations of a legal entity with its participants; establishment, liquidation and reorganization of a legal entity, including issues of succession; legal status of separate subdivisions of legal entities (including, branches and representative offices); ability of a legal entity to be responsible for its obligations; issues of responsibility of founders (participants, shareholders) of a legal entity for its obligations.
The proposed list largely overlaps with the provisions of the Draft Rules on the law applicable to companies and other bodies submitted for discussion by the European Group of Experts on Private International Law (GEDIP) in September 2016 aiming at adopting regulatory unification at the European Union level49.
The influence of the Eurasian Economic Union. Participation of Belarus in regional integration does not have a significant impact on the development of national corporate law. In contrast the EU where implementation of freedom of establishment was accompanied by significant impact on law of the Member States on companies, freedom of establishment within the EAEU is of the secondary importance. Unlike freedoms of movement of goods, services, capital and labor, freedom of establishment is not mentioned in article 1 of the EAEU Treaty50. It is neither mentioned in article 2 of the EAEU Treaty which provides for freedoms that form common (single) market. It is however regulated by section XV of the EAEU Treaty "Services, establishment, activities and investments" and the Protocol of the same name which is the Annex No. 16 to the EAEU Treaty. In order to ensure freedom of establishment, the EAEU Member States agreed to perform gradual liberalization of establishment by harmonizing legislations of the Member States and organizing mutual administrative cooperation between the competent bodies of the Member States51. However, no active action has been taken yet in this direction.
The usual for integration unions competition of national legal orders, which encourages EU Member States to respond to the concepts that are attractive to business in certain countries52, does not provide any impetus for responding in the field of corporate law at the current stage of integration in the EAEU.
49 European group for private international law, Draft rules on the law applicable to companies and other bodies (2016), available at https://www.gedip-egpil.eu/documents/Milan%202016/GEDIPs%20Prop osal%20on%20Companies.pdf., art. 5.
50 Treaty on the Eurasian Economic Union (29 May 2014) available in English at https://docs.eaeunion.org/docs/ru-ru/0003610/itia_05062014.
51 Ibid., art. 2
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The task to unify civil legislation within the EAEU set for the Belarusian legislator is rather of a proactive nature and is not based on any concept, strategy or developed action plan to harmonize national corporate laws for all the Member States.
The issue of creating supranational Eurasian companies is currently not relevant for the Eurasian integration too, because there are neither economic prerequisites nor effective legal instruments for this.
Conclusion. The following conclusions can be made after the review of the changes in the field of substantive regulation of legal entities and the conflict of laws rules.
Legislator's initiatives in terms of systematics of legal entities (exclusion of partnerships as an organizational and legal form, establishing the entire range of non-profit organizations at the level of a codified act, preserving ALCs as a type of business entities) are neither coherent nor well-reasoned as they seem to be a result of extracting provisions from of the current legislation and superficially considering the practice rather than comprehending the essence of the issue of correlation between organizational and legal forms of legal entities.
Adjustment of the legal regulation of economic companies is not of a conceptual nature because it does not strengthen the regulation of an OAO as a public company and retains at least three similar organization options for small and medium-sized businesses (OOO, ODO and ZAO). At the same time the renovation will fill a number of existing regulatory gaps, in particular on the issues of reorganization of companies, corporate governance and implementation of participants' rights to receive information. In this regard it can be generally evaluated as quite effective. Provided the evolution of economic relations, shareholders legislation will require priority attention in the course of further modernization because it is focused on the regulation of larger and, as a rule, cross-border business. This requires more consideration and orientation to the global achievements and experience.
Numerous differences between Belarusian law on economic companies and the approaches of the other EAEU Member States are not a cause for concern, because it seems reasonable to aim at creation of internally consistent, transparent and effective system of legal entities which preserves national specifics rather than at the absolute striving for unification within integration unions when determining the directions of development of corporate legislation at the national level.
52 For example, a reaction to the attractiveness of the English limited liabilitywas the creation in other EU countries of a variation of an LLC which does not require a significant minimal share capital: Gesellschaft mit beschränkter Haftung without statutory minimum capital in Germany (2008), societe privee a responsabilite limitee Starter with authorized capital from 1 to 18,550 Euros in Belgium (2010); societa a responsabilita limitata semplificata with authorized capital from 1 to 10,000 Euros in Italy (2012).
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Conceptually the new conflict of laws rules regulating corporate agreements and their substantive content together with the legalization of the scope of legal entities law allow to characterize the prospective
East European Scientific Journal #1(65), 2021 47 improvement of the conflict of laws rules on legal entities as essential. It is aimed at supporting substantive regulation and corresponds to the modern global trends.
