Actual Value of an LLC Share: Valuation, Shareholder Withdrawals, and Corporate Disputes

August 31, 2026

BRACE Law Firm©

The institution of the actual value of a share in the charter capital of an LLC serves as a crucial mechanism for protecting participants' rights upon their withdrawal from a limited liability company, as well as during other corporate events triggering a share value payment. The practical significance of these issues for businesses stems from the highly adversarial nature of the respective relations: parties frequently disagree on the valuation of company assets, calculation methodologies, and the accounting of specific balance sheet items, which spawns numerous commercial disputes.

The purpose of this analytical review is to examine the legal nature of the actual share value, analyze the methodology for its calculation and market valuation, outline common grounds for contestation, and systematize the approaches of judicial practice. We pay special attention to the legislative novelties introduced by Federal Law No. 514-FZ dated December 28, 2025, and the changes to the tax regime effective January 1, 2026.

Legal Nature and Grounds for Payment of the Actual Share Value

Pursuant to paragraph 1 of Article 94 of the Civil Code of the Russian Federation (the "Civil Code"), an LLC participant has the right to withdraw from the company regardless of the consent of other participants or the company by:

Submitting an application for withdrawal from the company, provided the company's charter allows such an option;
Demanding that the company acquire the share in cases stipulated by paragraph 3 of Article 93 of the Civil Code and Federal Law No. 14-FZ dated February 8, 1998, On Limited Liability Companies (the "LLC Law").

When a participant submits an application for withdrawal from the company or demands the company acquire their share in the prescribed cases, the share transfers to the company on the date the registering authority enters the corresponding record into the Unified State Register of Legal Entities regarding the participant's withdrawal, or on the date the company receives the relevant demand. If the company is a credit institution, the share transfers to it on the date it receives the participant's withdrawal application (subparagraphs 2 and 2.1 of paragraph 7 of Article 23 of the LLC Law). The company must pay this participant the actual value of their share in the charter capital or, with their consent, issue property of the same value in kind, following the procedure, method, and timelines stipulated by the LLC Law and the company's charter.

Under Article 23 of the LLC Law, the company must pay the participant the actual value of their share in several instances, including the participant's withdrawal from the company. Furthermore, the actual share value corresponds to the portion of the company's net asset value proportionate to the participant's share size, unless the LLC Law provides otherwise (paragraph 2 of Article 14 of the LLC Law, as amended by Federal Law No. 514-FZ dated December 28, 2025).

In accordance with Article 23 of the LLC Law, the company must acquire the participant's share (or a part thereof) in the charter capital and pay its actual value in the following cases:

Navigating regulatory requirements when the company's charter prohibits the alienation of the share (or a part thereof) to third parties, and other participants have refused to acquire it, or the participant failed to obtain consent for the alienation to another participant or a third party when the charter requires such consent (subparagraph 1 of paragraph 2 of Article 23 of the LLC Law);
Handling situations where the charter prohibits alienating the share to third parties, and the participants refuse to acquire it from the participant intending to transfer the share;
Managing consequences of the participant failing to fully pay for the share in the company's charter capital within the established timeline. The current version of the LLC Law does not provide for the payment of the actual value in this scenario: the unpaid portion of the share transfers to the company and is subject to sale pursuant to Article 24 of the LLC Law (paragraph 3 of Article 16, subparagraph 3 of paragraph 7 of Article 23 of the LLC Law);
Structuring a participant's withdrawal from the company, provided the charter grants the right to withdraw (paragraph 6.1 of Article 23, Article 26 of the LLC Law). The law prohibits the withdrawal of a sole participant, as well as the withdrawal of participants that leaves the company with no remaining participants (paragraph 2 of Article 26 of the LLC Law);
Litigating cases where a court expels a participant who grossly violates their duties or whose actions (or inaction) make it impossible for the company to function or substantially hinder its operations (Article 10 of the LLC Law). In this case, the company determines the actual value based on the accounting reports for the last reporting period preceding the date the court's expulsion decision enters into legal force (paragraph 4 of Article 23 of the LLC Law);
Addressing scenarios where the company's participants refuse to consent to the transfer of the share to the heirs of a deceased participant, to the legal successors of a reorganized (or liquidated) corporate participant, or to a person who acquired the share at public auctions (paragraph 5 of Article 23, paragraphs 8 and 9 of Article 21 of the LLC Law). The company calculates the actual value based on the financial statements for the last reporting period preceding the participant's death, the completion of the legal entity's reorganization or liquidation, or the acquisition of the share at a public auction, respectively.

Additionally, the company has the right to pay the actual value of a participant's share to their creditors to settle the participant's debts based on a court decision (Article 25 of the LLC Law). Effective December 28, 2025, upon the application of the creditors, the company, or the participant, the determination and payment of the actual value in this situation may also be based on the market value of the company's assets and liabilities (paragraph 2.1 of Article 25 of the LLC Law).

In other instances, the company may not acquire shares in its own charter capital (paragraph 1 of Article 23 of the LLC Law). The qualification of transactions executed in violation of this prohibition requires a careful approach. The clarification regarding their voidness is contained in paragraph 13 of Resolution of the Plenum of the Supreme Court of the Russian Federation No. 90 and the Plenum of the Supreme Arbitration Court of the Russian Federation No. 14 dated December 9, 1999, and relies on the version of Article 168 of the Civil Code in effect until September 1, 2013. Under the current version of Article 168 of the Civil Code (Federal Law No. 100-FZ dated May 7, 2013), a transaction violating legal requirements is generally voidable and is void only if it infringes upon public interests or the rights and legally protected interests of third parties (paragraphs 73–75 of Resolution of the Plenum of the Supreme Court of the Russian Federation No. 25 dated June 23, 2015).[1]

The company may not pay the actual value of a share in the charter capital or issue property in kind of the same value if (paragraph 8 of Article 23 of the LLC Law):

Assessing if, at the time of payment or issuance of property in kind, the company meets the criteria for insolvency (bankruptcy) under the Federal Law On Insolvency (Bankruptcy);
Evaluating whether the payment or issuance of property in kind will cause the company to meet the specified insolvency criteria.

The company pays the actual value using the difference between the company's net asset value and the size of its charter capital. If this difference is insufficient, the company must reduce its charter capital by the missing amount. If the reduction causes the charter capital to fall below the statutory minimum, the company makes the payment from the difference between the net assets and the minimum charter capital, and not earlier than three months from the date the obligation to pay arises. When the company owes obligations to multiple participants, it distributes the payment proportionally to their share sizes (paragraphs two and three of paragraph 8 of Article 23 of the LLC Law).

A highly relevant practical consequence of the payment prohibition is often overlooked. In the cases specified by paragraphs 2 and 6.1 of Article 23 of the LLC Law, the person whose share transferred to the company may submit a written application no later than three months from the expiration of the payment deadline, and the company must reinstate them as a participant and transfer the corresponding share back to them (paragraph five of paragraph 8 of Article 23 of the LLC Law). Missing this deadline strips the individual of this defensive remedy.

It is essential to distinguish between the concepts of "nominal share value" and "actual share value". The nominal value reflects the participant's contribution to the charter capital and is recorded in the charter and the Unified State Register of Legal Entities. The law does not provide for the payment of the nominal share value. The actual value is an economic metric determined based on the current value of the company's assets, reflecting the real worth of the share to the participant. Both concepts differ from the market value of the share as an independent tradable asset: appraisers determine the market value considering the controlling (or non-controlling) nature of the stake and its liquidity, which typically does not equal a proportional fraction of the net assets' market value.

The company must pay the participant the actual value of their share within 3 months from the date the corresponding obligation arises, unless the company's charter establishes a different timeline or procedure for paying the actual value of the share (or part thereof). The participants may include provisions establishing a different timeline or procedure for paying the actual value of the share in the company's charter upon incorporation or when amending the charter by a unanimous resolution of the general meeting of participants. Removing such provisions from the charter requires a resolution of the general meeting adopted by a two-thirds majority of the total votes of the company's participants (paragraph 6.1 of Article 23 of the LLC Law). The three-month period is a special rule applicable to participant withdrawals (paragraph 6.1 of Article 23) and demands to acquire a share (paragraph three of paragraph 2 of Article 23 of the LLC Law). The general rule is 1 year from the date the share transfers to the company, unless the LLC Law or the charter provides a shorter period (paragraph 8 of Article 23 of the LLC Law). The one-year term applies, inter alia, to payments to heirs and legal successors under paragraph 5 of Article 23 of the LLC Law.

The participant or the company itself must file a statement requesting the determination of the actual value of the LLC share based on the market value of the company's assets and liabilities. Notarization of this statement is not required (paragraph 9 of Article 23 of the LLC Law). Federal Law No. 514-FZ dated December 28, 2025, introduced this paragraph. Notably, the party must submit the statement before the expiration of the payment deadline. This time limitation requires timely action from the participant. If the parties have not determined the actual value based on market valuation by the time the payment deadline expires, or if either party objects, the company pays the actual value under the standard procedure, and the company must pay (or the participant must return) the difference between the paid amount and the value determined under the rules of paragraph 9 (paragraph four of paragraph 9 of Article 23 of the LLC Law).

The company's charter may stipulate determining the actual share value in the amount of the market value of the share itself (paragraph five of paragraph 9 of Article 23 of the LLC Law). The participants incorporate such provisions into the charter by a unanimous resolution of the general meeting and remove them by a two-thirds majority vote.

The law does not establish specific consequences for the company's failure to pay (or late payment of) the actual share value to a withdrawn participant. In practice, courts may order the company to pay interest for the unlawful use of others' funds (Article 395 of the Civil Code). Interest accrues from the moment of default, meaning the day following the expiration of the statutory payment deadline, rather than from the moment the obligation arises.

Calculation Methodology for the Actual Share Value in an LLC

Calculating the actual share value relies on determining the value of the company's net assets. The net asset value is calculated as the difference between the value of the entity's recognized assets and the value of its recognized liabilities. When determining the net asset value, accounting objects recorded by the entity in off-balance accounts are excluded from the calculation.[2]

An appraiser engaged by the company and (or) the person entitled to receive the actual share value performs the valuation, unless the company's charter prescribes a different procedure for engaging an appraiser (paragraph one of paragraph 9 of Article 23 of the LLC Law). The net asset value is defined as the difference between the market value of the company's assets and the market value of its liabilities. The appraiser conducts the valuation as of the date the share (or part thereof) transfers to the company, unless the person entitled to the payment and the company agree on a different valuation date (paragraph three of paragraph 9 of Article 23 of the LLC Law).

Before calculating the actual share value, it is necessary to identify the reporting period whose data will be utilized. The LLC Law links this period to various legal facts depending on the grounds for payment: for withdrawals, to the date the share transfers to the company (paragraph 6.1 of Article 23); for acquisition demands, to the day the participant submits such a demand (paragraph three of paragraph 2 of Article 23); for expulsions, to the date the court's decision enters into legal force (paragraph 4 of Article 23 of the LLC Law). The reporting period for annual financial statements is the calendar year. Interim financial statements cover a period shorter than the reporting year and are mandatory only when legislation, regulations of state accounting authorities, the economic entity's contracts, constituent documents, or owner decisions mandate their submission (Parts 4 and 5 of Article 13, Part 1 of Article 15 of Federal Law No. 402-FZ dated December 6, 2011, On Accounting).

In case No. A40-109399/2020 regarding the recovery of the actual share value, the plaintiff argued that, according to a 2014 appraisal, the market value of the defendant's real estate assets amounted to 81,067,000 rubles, resulting in an actual share value of 27,027,737.80 rubles.

According to the company's accounting policy, the reporting period for drafting interim financial statements was one quarter.

However, the court established that "due to the plaintiff's systematic unlawful actions, the defendant was repeatedly deprived of its real estate property. The defendant's failure to reflect the company's assets (real estate) in the balance sheet as of March 31, 2019, accurately reflected the true situation regarding the specified real estate objects." As of March 31, 2019, based on the balance sheet data calculated in accordance with applicable law, the portion of the company's net asset value proportionate to the specified share equaled 85,017 rubles, which the defendant transferred to the plaintiff via payment order No. 23 dated May 15, 2020.

Dismissing the claims for the recovery of the actual share value, the courts ruled that the defendant had properly fulfilled its obligations to pay the plaintiff the actual share value, and the defendant carried no outstanding debt regarding this payment.[3]

Thus, if the LLC mandates the preparation of interim financial statements, the reporting date will be the final day of the established period.

In case No. A41-51878/2019, the courts rejected the company's arguments that the plaintiff's actual share value should be determined based on the company's 2017 financial statements as the last period preceding the plaintiff's withdrawal. The courts reasoned that if a financial lease agreement executed by the company requires the submission of interim financial statements, the company has an obligation to draft them. Having established that the defendant had a duty to prepare financial statements for the period from January 1, 2018, to September 30, 2018, the courts concluded that "the actual value of the share owned by the plaintiff must be determined based on the reporting for this period."[4]

The Supreme Court of the Russian Federation clarified its position on this issue in 2025. In case No. A41-24973/2023, the Judicial Board for Economic Disputes of the Supreme Court of the Russian Federation overturned the acts of three lower courts that had calculated the actual share value based on annual financial statements. The Court noted that while the obligation to draft interim financial statements does not arise by operation of law from the company's contracts with counterparties, if the company actually prepared them (in the reviewed case, pursuant to a bank account agreement), these statements contained the most up-to-date information regarding the company's property status. The value of the share payable to a withdrawing participant must rely on reliable data reflecting the company's current property (financial) standing and comply with the principle of fairness; otherwise, the departing participant would receive funds in a greater or lesser amount without factoring in the changes to the company's financial condition during the current year.[5]

A practical takeaway for parties in a corporate conflict: one must examine not only the company's accounting policy but also the entire array of contractual obligations (credit agreements, bank account agreements, lease agreements) that may trigger a duty to generate interim financial statements, as well as the company's actual conduct in preparing them.

Taxation of Income Derived from the Actual Share Value

Pursuant to Article 210 of the Tax Code of the Russian Federation (the "Tax Code"), the tax base for the personal income tax (PIT) encompasses all income received by the taxpayer in cash or in kind, or to which the taxpayer has acquired a right of disposal, as well as income in the form of material benefit determined in accordance with Article 212 of the Tax Code.

Article 217 of the Tax Code provides an exhaustive list of income exempt from PIT.

Under paragraph 17.2 of Article 217 of the Tax Code in the version effective until January 1, 2026, exemptions from PIT applied to, inter alia, income received by a taxpayer recognized as a Russian tax resident from the sale (redemption) of participation interests in the charter capital of Russian organizations, provided that as of the date of the sale (redemption), the taxpayer continuously held such interests under ownership or other proprietary rights for more than five years. Thus, based on this rule, the income received upon withdrawal from an LLC in the form of the actual value of a share held by the participant for more than five years was not subject to PIT. However, beginning January 1, 2025, the exemption ceased to be unconditional: it no longer applies to income exceeding 50 million rubles per tax period.

Pursuant to paragraph 17.2 of Article 217 of the Tax Code in the version effective from January 1, 2026, exemptions from PIT apply to, inter alia, income received by a Russian tax resident from the sale (excluding cases of withdrawal (exit) from the organization) of participation interests in the charter capital of Russian organizations, provided that these interests comprise the charter capital of organizations where no more than 50% of the assets, according to the financial statements as of the last day of the month preceding the month of sale, directly or indirectly consist of real estate located in the Russian Federation, and the taxpayer continuously held such interests under ownership or other proprietary rights for more than 5 years prior to the sale date. Federal Law No. 425-FZ dated November 28, 2025, and Federal Law No. 15-FZ dated January 30, 2026, introduced these amendments; the new version of paragraph 17.2 of Article 217 of the Tax Code applies to income received from January 1, 2026, onwards.

Therefore, starting January 1, 2026, the income paid to a participant in the form of the actual share value upon withdrawal from an LLC is subject to PIT regardless of the holding period.

The loss of the exemption is not the only, nor the most significant, aspect of the payment's taxation. The amount by which the funds (or the value of other property) received by the participant upon withdrawal (exit) from the organization exceeds their expenses on acquiring the share is equated to dividend income (subparagraph 1 of paragraph 1 of Article 208 of the Tax Code). Such income forms an independent tax base (subparagraph 3 of paragraph 6 of Article 210 of the Tax Code) and is taxed at the rates set forth in paragraph 1.1 of Article 224 of the Tax Code, and for non-residents of the Russian Federation, at the rate under paragraph 3 of Article 224 of the Tax Code, subject to the priority of international treaty rules (Article 7 of the Tax Code).

Unlike a share sale, where the individual calculates and pays the tax independently (subparagraph 2 of paragraph 1 of Article 228 of the Tax Code), the company acts as a tax agent when paying the actual share value. This role requires obtaining documents from the participant confirming their share acquisition expenses: the availability of these documents dictates both the size of the property tax deduction (subparagraph 2 of paragraph 2 of Article 220 of the Tax Code) and the distinction between the main tax base and the base for income equated to dividends.

For a participant that is a Russian legal entity, income received upon withdrawal is not recognized for tax purposes within the limits of the charter capital contribution (subparagraph 4 of paragraph 1 of Article 251 of the Tax Code), while the excess amount is qualified as equity participation income (paragraph 1 of Article 250 of the Tax Code), with the possibility of applying a 0 percent tax rate subject to compliance with the conditions of Article 284.2 of the Tax Code.

When issuing property in kind to a withdrawn participant, the transfer is not classified as a realization only up to the amount of the initial contribution (subparagraph 5 of paragraph 3 of Article 39, subparagraph 1 of paragraph 2 of Article 146 of the Tax Code). The excess amount forms an object of VAT taxation. The concept of an "initial contribution" for tax purposes is defined by civil law regulations.[6]

The consequences for the remaining participants require particular scrutiny: receiving a distributed share that transferred to the company is viewed as a gratuitous receipt of property rights, subject to taxation under paragraph 8 of Article 250 of the Tax Code.[7]

In instances involving the unlawful retention of funds, evasion of their return, or other payment delays, interest is payable on the debt amount. The key rate of the Bank of Russia effective during the respective periods determines the interest rate. These rules apply unless the law or a contract establishes a different interest rate (Article 395 of the Civil Code of the Russian Federation).

Interest payments to a taxpayer for the use of others' funds represent compensation for lost profits, as their purpose is to reimburse the unreceived income that would have been subject to PIT had it materialized.[8]

Consequently, the interest amounts paid to the taxpayer for the use of others' funds are subject to PIT under the standard procedure.

Commercial Litigation and Disputes Regarding the Actual Share Value

According to Article 225.1 of the Arbitration Procedure Code of the Russian Federation (the "Arbitration Procedure Code"), cases relating to the actual share value fall under the category of corporate disputes. The arbitration court at the location of the legal entity tries such matters (Part 4.1 of Article 38 of the Arbitration Procedure Code).

A statement of claim or an application regarding a corporate dispute must comply with the requirements stipulated by Article 125 of the Arbitration Procedure Code. The statement of claim or application must also indicate:

The state registration number of the legal entity;
The address (location) of the legal entity registered in the Unified State Register of Legal Entities.

The plaintiff must attach the documents mandated by Article 126 of the APC RF to the statement of claim or application, along with an extract from the Unified State Register of Legal Entities or another document confirming the legal entity's state registration and containing its address (location) and state registration number.

It is important to emphasize that corporate disputes do not require compliance with pre-trial dispute resolution procedures (Part 5 of Article 4 of the Arbitration Procedure Code).

The general three-year statute of limitations applies to claims for the recovery of the actual share value (Article 196 of the Civil Code), which begins to run from the day the person knew or should have known about the infringement of their right, i.e., generally from the day following the expiration of the statutory payment deadline (paragraph 1 of Article 200 of the Civil Code). The company's partial payment of the actual value may evidence an acknowledgment of debt and toll the statute of limitations (Article 203 of the Civil Code).

In case No. A55-6833/2025 regarding a claim to recover the actual value of a 19% share in an LLC's charter capital, the courts established that on October 14, 2024, the plaintiff submitted a withdrawal application to the company, and on October 15, 2024, the registering authority entered the respective amendments into the Unified State Register of Legal Entities. Thus, from that moment, the plaintiff acquired the right to demand payment for their share in the charter capital, while the company incurred an obligation to pay the actual share value.

Because the company owned real estate and a dispute existed over the actual share value, the court appointed a judicial expertise to determine the actual share value, factoring in the market value of the property reflected on the company's balance sheet as of December 31, 2023. The expert concluded that the actual value of the 19% share in the LLC's charter capital on the specified date, adjusted for the market value of the company's assets, totaled 4,642,000 rubles.

Furthermore, rejecting the defendant's arguments, the courts stated that "the reviewed case lacks any evidence indicating the occurrence of extraordinary property losses or damages prior to the plaintiff's withdrawal from the company that could have impacted the net asset value. The subject of the appraisal was the existing real estate registered on the balance sheet, the value of which the expert determined. The actual share value calculation relies on the company's net asset value on the relevant reporting date, rather than hypothetical future expenses or potential losses that lacked documentary corroboration and did not affect the company's financial position at the time of the participant's withdrawal."[9]

The actual share value may be recovered not based on the company's financial statements for the last reporting period, but rather determined by factoring in the market value of the company's property.

For instance, in case No. A38-6040/2021, the court emphasized that "as evidenced by the practice of applying the LLC Law provisions regarding the payment of the actual share value to a company participant, as well as the position of the Supreme Arbitration Court of the Russian Federation on this issue set forth in Resolution No. 15787/04 dated June 7, 2005,[10] the actual value of the participants' shares must be determined taking into account the market value of the fixed assets, including both movable and immovable property reflected in the company's financial statements."[11]

If the participant contests the actual share value determined by the company, the court verifies the merits of their arguments, alongside the company's objections, based on the evidence presented by the parties under civil and arbitration procedural legislation, including the expert opinion issued in the case.[12]

Consequently, upon a dispute regarding the size of the participant's actual share value, the court must ascertain the market value of the company's assets, without limiting the scope of evidence for determining the assets' market value exclusively to accounting data.

In case No. A56-46413/2023, the court of first instance ordered a judicial valuation expertise. The expert opinion "contains definitive conclusions on the question posed to the expert; the expert relied on the appropriate normative documents, reference materials, and methodological literature; the expert's professional training and qualifications raise no doubts; the expert's answer to the court's question is clear, consistent, derives from the conducted study, and is corroborated by factual data and case files. The defendant's disagreement with the expertise result does not intrinsically invalidate the expert opinion. The court of cassation finds no grounds to deem the expert opinion unreliable."[13]

In case No. A41-81859/2022, the Supreme Court of the Russian Federation noted that when paying the actual share value to a withdrawing participant, the property losses objectively incurred in the business entity's operations before the participant submitted the buyout demand must be allocated to them proportionally to their participation share. A contrary approach would mean that "the business entity's losses resulting from one participant's unilateral demand would be distributed exclusively among the remaining partners, while the withdrawing individual would be absolved from sharing the burden of such losses." In this case, the courts awarded the actual share value as determined by the expert opinion; however, this opinion completely ignored the legal entity's property losses. The expert failed to investigate the magnitude of the entity's damages caused by a fire and the extent to which the fire affected the business valuation.[14]

Commercial litigation practice reveals cases where a withdrawn participant's waiver of the actual share value payment is deemed lawful and qualified as debt forgiveness. For example, case No. A65-28644/2018 involved a claim to invalidate a withdrawn participant's statement waiving the receipt of the actual share value (debt forgiveness). The participant's spouse petitioned the arbitration court, arguing the transaction occurred without her consent.

A prerequisite for invalidating a transaction is proving that the other party knew or should have known about the other spouse's objection to the contested transaction. Consequently, when contesting actions taken by one spouse to dispose of joint property, the burden of proving that the property disposal lacked the other spouse's consent falls on the party challenging the transaction, which in this case was the plaintiff.

The courts noted that the plaintiff failed to prove the company knew or should have known about the lack of her consent to the waiver of the actual share value payment. Moreover, the company's awareness of the marital relationship does not imply the opposite, since under paragraph 2 of Article 35 of the Family Code of the Russian Federation, a spouse's consent to the other spouse's actions in disposing of joint property is presumed. This established the absence of grounds to invalidate the statement forgiving the debt for the actual share value payment.

A former participant of a business entity who has not received the actual share value payment is entitled to file a claim holding controlling persons vicariously liable if they made the withdrawal decision during a period when the legal entity was conducting commercial activities.[15]

In the scenario described in the aforementioned Review, the plaintiff was an LLC participant holding a 34% share until 2017. In that year, he exercised his withdrawal right provided by the charter. Pursuant to paragraph 6.1 of Article 23 of the LLC Law, the share transferred to the company, but the company failed to voluntarily pay the actual share value. Consequently, the former participant petitioned the arbitration court to recover the debt, and the court sustained the claim. The court issued a writ of execution, yet the company's obligation remained unfulfilled during the enforcement proceedings.

In 2023, the registering authority struck the company from the Unified State Register of Legal Entities (USRLE) as a dormant entity, thereby terminating its operations.

As a general rule, a former participant who has not received the actual value of their share may file a damages claim against the remaining participants and other management body members if their actions (or inaction) facilitated the evasion of obligations – for instance, via asset stripping, generating fictitious debts, or transferring the business to another entity. After the company is struck from the USRLE, this remedy is pursued through a lawsuit holding controlling persons vicariously liable.

However, if the withdrawal from the company occurred immediately before or after the emergence of the dormant entity indicators, the former participant's claims can only be satisfied as part of the liquidation quota, ranking equally with other participants (Article 63 of the Civil Code). This stems from the presumption that such a withdrawal could have impacted the liquidation process. Granting the former participant the right to have their claims satisfied on par with external creditors would violate the principle of prioritizing third-party claims over those of company participants, who bear the risks of corporate operations.

Nevertheless, in this case, the plaintiff withdrew from the company in 2017, meaning 6 years before its removal from the USRLE. At that time, the company possessed sufficient assets to settle with both creditors and withdrawn participants. Therefore, his withdrawal could not have triggered the subsequent termination of the company's operations or disrupted settlements with external creditors. There is no causal nexus between the plaintiff's withdrawal and the default on the obligations. From 2017 onwards, the plaintiff ceased to be a company participant and lost access to management; he did not participate in decisions leading to asset stripping or operational termination. Hence, he could not influence the actions of the controlling persons who leveraged corporate mechanisms to prejudice the obligations.

Under these circumstances, the plaintiff has the right to demand damages from the controlling persons whose actions (or inaction) rendered the fulfillment of the obligation to him impossible. The lower courts' denial of this right contradicts the law and established law enforcement practice. It is also vital to consider that the plaintiff was denied access to the company's internal records, including financial and managerial information. Consequently, the burden of proving the absence of a link between the controlling persons' actions and the default on the obligation must shift to those persons. Presuming the guilt of such individuals in causing damages to the former participant is well-founded and aligns with the requirements of good faith and transparency in corporate relations.[16]

Case No. A40-102166/2023 presents significant interest. An LLC participant holding a 30% share in the charter capital submitted a notarized withdrawal application in December 2022. The company determined the actual share value at 1 million rubles and paid it to the former participant. Disagreeing with this valuation, the plaintiff initiated litigation. According to her calculations, the payable amount was 22.3 million rubles.

Three instances of courts dismissed the claims, relying specifically on the results of a judicial expertise valuing the company's net assets, concluding that the market value of the company's net assets as of December 31, 2021, equaled 30 rubles. The plaintiff appealed to the Supreme Court of the Russian Federation.

Pursuant to the established practice of the Supreme Court of the Russian Federation, the company's financial position is precisely the objective and primary factor driving the value of the participants' shares in the charter capital. The greater the difference in the balance sheet structure (based on market metrics) between the company's property (assets) and its obligations to third parties (liabilities), the higher the participant's share value. Conversely, when this difference – constituting the company's net assets – shrinks, the share value is presumed to decrease proportionally.

To substantiate her claims during the trial, the plaintiff consistently argued that the company included a 305,199,570-ruble debt to a counterparty in the financial statements specifically to diminish the actual share value. This accounts payable originated from a supply agreement and was repeatedly assigned. The ultimate acquirer of the debt was an entity affiliated with the LLC's controlling participant, possessing no employees and conducting no economic operations.

Under current legislation, an organization writes off unclaimed accounts payable in its accounting records according to an established procedure. In this scenario, the company should have written off the sum and excluded it from the actual share value calculation. The company's failure to execute these steps compromised the reliability of the balance sheet data and, ultimately, the share value calculation.

These collective circumstances imply that the debt might have been artificially inflated to suppress the actual share value. This situation should have prompted valid doubts among the courts of all instances regarding the authenticity of the debt obligations reflected in the reporting.

The Supreme Court of the Russian Federation stressed that in such cases, the burden of proving the existence of the debt to the counterparty must shift to the company. Otherwise, a withdrawing participant – lacking access to internal controls over reporting accuracy – would remain effectively powerless to challenge the bad-faith devaluation of their share and, consequently, unlawfully prejudiced in their property rights.

The Supreme Court ruled that in the context of an ongoing corporate conflict and conflicting studies regarding the actual share value, the courts were required to verify not merely the formal compliance of the balance sheet's external attributes – which displayed massive accounts payable leading to negative net assets – but also to evaluate reasonable arguments and evidence (including circumstantial evidence, both individually and collectively) pointing to the unreliability of the reporting metrics.[17]

The fate of a claim for the actual share value payment during a company's bankruptcy warrants distinct attention. The Plenum of the Supreme Court of the Russian Federation clarified that after settling the claims of third-priority creditors, the registered claims are paid in a specific sequence, wherein the claim for the actual share value payment of a participant who withdrew prior to the onset of insolvency indicators is satisfied after the claims of the debtor's controlling persons and affiliated persons, but before the claims of the founders (participants) for obligations arising from their participation.[18] Thus, this claim is subordinated in priority compared to the claims of independent creditors, a factor that must be weighed when deciding on the timing of withdrawal and assessing recovery prospects.

The former participant's access to the company's documentation is critical for evidentiary purposes. The Supreme Court of the Russian Federation asserts that the loss of participant status does not deprive an individual of the right to demand the documents necessary to calculate the payable actual share value.[19] It is advisable to assert this demand proactively, before the payment deadline expires, because the ability to challenge the company's calculation hinges directly on the completeness of the obtained records.

Foreign Elements and Counter-Sanctions Restrictions

If a company participant is a person from a foreign state committing unfriendly actions, or a person controlled by such an entity, the payment of the actual share value must be preceded by an analysis of the applicability of a special licensing regime. Decree of the President of the Russian Federation No. 618 dated September 8, 2022, established a specific framework for executing (performing) transactions (operations) directly and (or) indirectly resulting in the establishment, alteration, or termination of the rights of ownership, use, and (or) disposal of participation interests in the charter capitals of limited liability companies (excluding credit and non-credit financial institutions). Parties may execute such transactions (operations) based on permits from the Government Commission on Monitoring Foreign Investment in the Russian Federation.

Because a participant withdraws by alienating their share to the company, the necessity of securing a Government Commission permit requires an independent assessment on a case-by-case basis. Furthermore, one must verify the regime for crediting the payable amounts to Type "C" accounts, considering paragraph 12 of Decree of the President of the Russian Federation No. 95 dated March 5, 2022, and paragraph 4 of Decree of the President of the Russian Federation No. 254 dated May 4, 2022. Counter-sanctions regulations evolve frequently and in a targeted manner, meaning the current versions of the decrees and the clarifications of the Russian Ministry of Finance must be reviewed exactly on the transaction date.

In case No. A11-10705/2025, the prosecutor's office filed a lawsuit with the arbitration court to declare a transaction involving a participant's withdrawal from an LLC void under Article 169 of the Civil Code. The claim argued that the share transferred to the company upon withdrawal could be distributed to the sole remaining participant, who was an unfriendly foreign person, and that the transaction itself could only be executed with a permit from the Government Commission, as mandated by paragraph 2 of Presidential Decree No. 618.

The Russian Ministry of Finance issued official guidance on applying Presidential Decree No. 618, stating (in paragraph 10) that transactions (operations) requiring a Government Commission permit include, inter alia, transactions involving a participant's withdrawal from a limited liability company through the alienation of their share to the company or the acquisition of a share by the company.[20]

The case files lacked any evidence that the LLC participant applied to the Government Commission. Consequently, his withdrawal from the LLC without such a permit "is a void transaction by virtue of the applicable law, and the courts rightfully concluded that the state registration record of his withdrawal from the LLC must also be annulled, preserving the record of the defendant remaining as a company participant holding a % share."[21]

Despite a substantial body of commercial litigation practice, challenges persist in regulating the calculation and contestation of the actual share value:

Counseling on the lack of unified methodologies. The legislation lacks granular rules for calculating net asset value incorporating the market valuation of assets, leading to conflicting interpretations and disputes. Federal Law No. 514-FZ dated December 28, 2025, partially bridged this gap by codifying the market valuation mechanism; however, the methodology requirements, the procedure for resolving discrepancies between multiple appraisal reports, and the consequences of the company's evasion from engaging an appraiser remain unregulated;
Advising on the insufficient regulation of the appraiser's role. The criteria for selecting an appraiser, the requirements for the appraisal report, and the rules for its use in corporate disputes remain undefined;
Navigating the contradictions between accounting and market approaches. Financial reporting is geared toward compliance with accounting rules rather than reflecting market value, inherently creating conditions for conflicts.

To mitigate the risks of corporate disputes, we recommend:

Structuring the utilization of new charter options: codify the procedure for engaging an appraiser and, if necessary, dictate the determination of the actual value in the amount of the share's market value. The participants incorporate such provisions into the charter by a unanimous resolution and remove them by a two-thirds majority vote (paragraph 9 of Article 23 of the LLC Law);
Managing periodic independent appraisals of the company's assets;
Safeguarding the transparency of financial reporting and the timely disclosure of information regarding assets and liabilities;
Drafting and negotiating pre-trial dispute resolution mechanisms regarding share valuation into corporate agreements;
Handling the revision of existing charters for compliance with the December 28, 2025 version of the LLC Law, including evaluating the feasibility of adjusting the timeline and procedure for paying the actual value;
Defending the storage of documents confirming the participants' share acquisition expenses – these dictate both the tax burden upon withdrawal and the accuracy of the company's compliance as a tax agent;
Strategic guidance regarding the involvement of participants from unfriendly jurisdictions, proactively evaluating the need for a Government Commission permit and the applicability of the Type "C" account regime.

Key Takeaways

The actual value of an LLC share is a complex legal and economic framework bridging elements of accounting, valuation, and corporate law.
Calculating the share value demands more than rote compliance with the net asset methodology; it requires factoring in market conditions, the specific nature of the company's assets, and corporate restrictions.
Contesting the actual share value calculation is one of the most adversarial categories of corporate disputes. Commercial litigation practice exhibits a trend toward a broader application of market approaches when appraising share values, alongside an elevated reliance on independent and judicial expertise.
Enhancing the legal framework in this area must focus on eliminating existing discrepancies, standardizing valuation practices, and boosting the transparency of corporate procedures. This approach will drive down dispute volumes and safeguard the rights of LLC participants more effectively.

__________________________

References

Resolution of the Plenum of the Supreme Court of the Russian Federation No. 25 dated June 23, 2015, On the Application by Courts of Certain Provisions of Section I of Part One of the Civil Code of the Russian Federation.
Order of the Ministry of Finance of Russia No. 84n dated August 28, 2014 (as amended on March 31, 2025), On Approving the Procedure for Determining the Value of Net Assets.
Resolution of the Arbitration Court of the Moscow District dated April 12, 2022, on case No. A40-109399/2020.
Resolution of the Arbitration Court of the Moscow District dated January 26, 2021, on case No. A41-51878/2019.
Ruling of the Judicial Board for Economic Disputes of the Supreme Court of the Russian Federation No. 305-ES25-7382 dated November 14, 2025, on case No. A41-24973/2023. See also paragraph 21 of the Review of Judicial Practice of the Supreme Court of the Russian Federation No. 3 (2025), approved by the Presidium of the Supreme Court of the Russian Federation on October 8, 2025.
Letter of the Ministry of Finance of Russia No. 03-07-11/2269 dated January 15, 2024.
Letter of the Ministry of Finance of Russia No. 03-03-07/25921 dated March 22, 2024. See also Letter of the Ministry of Finance of Russia No. 03-03-06/1/2252 dated January 16, 2024, regarding the application of the 0 percent tax rate.
Letter of the Federal Tax Service of Russia No. BS-4-11/22561@ dated December 23, 2015. A similar position is reflected in paragraph 7 of the Review of Practice of Consideration by Courts of Cases Related to the Application of Chapter 23 of the Tax Code of the Russian Federation, approved by the Presidium of the Supreme Court of the Russian Federation on October 21, 2015.
Resolution of the Arbitration Court of the Volga District dated August 7, 2026, on case No. A55-6833/2025.
Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated June 7, 2005, on case No. A53-15243/02-C4-11.
Resolution of the Arbitration Court of the Volgo-Vyatka District dated October 17, 2024, on case No. A38-6040/2021.
Subparagraph "c" of paragraph 16 of Resolution of the Plenum of the Supreme Court of the Russian Federation No. 90 and the Plenum of the Supreme Arbitration Court of the Russian Federation No. 14 dated December 9, 1999, On Certain Issues Pertaining to the Application of the Federal Law on Limited Liability Companies. The specified subparagraph remains relevant only in the cited part: the provisions regarding the calculation of the actual value based on the financial statements for the year the withdrawal application is submitted and the six-month payment term are based on the version of the LLC Law in effect until July 1, 2009, and are no longer applicable.
Resolution of the Arbitration Court of the North-Western District dated April 30, 2025, on case No. A56-46413/2023.
Ruling of the Judicial Board for Economic Disputes of the Supreme Court of the Russian Federation dated December 13, 2024, on case No. A41-81859/2022.
Review of Practice of Consideration by Arbitration Courts of Cases Concerning Corporate Disputes on the Subsidiary Liability of Controlling Persons for the Obligations of a Dormant Legal Entity, approved by the Presidium of the Supreme Court of the Russian Federation on November 19, 2025 (paragraph 16 of the Review).
Ruling of the Judicial Board for Economic Disputes of the Supreme Court of the Russian Federation dated April 25, 2025, on case No. A40-102166/2023.
Paragraph 35 of Resolution of the Plenum of the Supreme Court of the Russian Federation No. 41 dated December 23, 2025, On Establishing the Claims of the Debtor's Controlling Persons and Affiliated Persons in Bankruptcy Procedures.
Ruling of the Judicial Board for Economic Disputes of the Supreme Court of the Russian Federation No. 306-ES25-5519 dated October 23, 2025, on case No. A12-24638/2023.
Letter of the Ministry of Finance of Russia No. 05-06-14RM/99138 dated October 13, 2022, Official Clarifications No. 1 Regarding the Application of the Decree of the President of the Russian Federation No. 618 dated September 8, 2022.
Resolution of the Arbitration Court of the Volgo-Vyatka District No. A11-10705/2025 dated July 27, 2026.