In the first reading the State Duma has approved the project of the Federal Law "On amendments to Part I of the Civil Code of the Russian Federation, the Federal Law "On limited liability companies" and the Federal law " On registration of legal entities and sole proprietors". If the bill is introduced this year all limited liability companies (LLC) will have to re-register by 1 July 2006. So, first, the bill is to abolish free retirement of a participant from an LLC with receipt by the retiring participant of the fair value of its share. Currently any participant of an LLC can declare about its retirement. This provision of the Law frequently makes the other participants also retire from the LLC with allotment of their shares by the LLC and results in liquidation of the LLC. Besides, the unrestricted retirement of an LLC participants at the absence of vicarious liability (like in a partnership), and obligatory audit (as for in joint-stock companies), make an LLC the most widespread legal form used for creation of false companies purposely for tax evasion.. Thus the unrestricted retirement is often used to avoid property claims for the losses, caused to the LLC and its creditors. Secondly, the considered project of the bill provides for elimination of the current dualism with an LLC incorporation documents, i.e. abolishment of the Incorporation Agreement The current legislation provides for two incorporation documents - the Charter and the Incorporation Agreement. Soon the Charter should become the only incorporation document of an LLC which unlike the Agreement may be changed without the consent of all participants. The Charter will contain no information on the participants? size and a face-value, thus also relieving from the necessity to amend the Charter each time the structure of the paid-in capital or the participants changes. Re-registration of the existing LLC is required to uniform the old and newly created companies and their incorporation documents Another innovation is purposed to protect the legitimate interests of the minority participants which are unable to influence decision-making during the general meetings of the LLC participants. The bill provides them with an opportunity to request allotment of their shares in case the general meeting of the participants makes up decisions which may lead to a decrease in value of shares held by these participants?. Besides the conceptual legal issues pertaining to the activity of an LLC, the bill provides for a number of clarifications and innovations which could prevent abuse of rights provided by the Law to the company, its participants and third parties, or save the company?s assets.