Exclusion of a Legal Entity from the Russian Unified State Register of Legal Entities: Risks and Liability

 

August 31, 2022

BRACE Law Firm ©

 

A legal entity may be excluded from the Unified State Register of Legal Entities (the "USRLE") not only by the voluntary decision of its participants, as a result of liquidation or bankruptcy, but also through an administrative procedure for exclusion from the USRLE. This procedure entails numerous risks and negative consequences for the management bodies of the legal entity.

Since the administrative procedure for excluding a company from the USRLE is carried out extrajudicially, the management bodies and counterparties of the excluded legal entity often learn about the fact of the exclusion from the register only after such exclusion has occurred, facing serious consequences thereof.

Let us consider the legal risks and liability associated with the exclusion of a company from the USRLE.

For what reasons can an organization be excluded from the USRLE?

The procedure for excluding a legal entity from the USRLE by a decision of the registration authority is provided for by Article 21.1 of Federal Law No. 129-FZ dated August 08, 2001, On State Registration of Legal Entities and Individual Entrepreneurs (the "Law on State Registration").

The following are subject to exclusion:

• a legal entity that has not submitted reporting documents during the last 12 months preceding the moment the registration authority adopts the relevant decision;
• a legal entity that has not carried out operations on at least one bank account.

Such an entity is recognized as an inactive legal entity.

The registration authority adopts a decision on the pending exclusion of the legal entity from the Unified State Register of Legal Entities. However, such a decision is not adopted if the legal entity is already in liquidation.

The procedure for exclusion from the USRLE is also applied in the following cases:

• impossibility of liquidating the legal entity due to a lack of funds for the necessary liquidation expenses and the impossibility of imposing these expenses on its founders (participants);
• presence of information in the Unified State Register of Legal Entities regarding which an entry of unreliability has been made for more than 6 months from the date of such entry.

Under current legal regulation, a legal entity regarding which an entry on the unreliability of address information has been made in the USRLE is effectively liquidated as an inactive legal entity. At the same time, the unreliability of information regarding a legal entity constitutes an independent ground for its exclusion from the USRLE. As the Constitutional Court of the Russian Federation indicated in Resolution No. 26-P dated December 06, 2011, and Definitions No. 143-O-O dated January 17, 2012, and No. 994-O dated June 17, 2013, such legal regulation is aimed at ensuring the reliability of information contained in the USRLE (including regarding the termination of a legal entity's activities), maintaining trust in this information on the part of third parties, preventing the unscrupulous use of actually inactive legal entities, and thereby ensuring the stability of civil circulation.

An entry of unreliability may concern the address of the legal entity, information about management bodies, or other details. The exclusion of an inactive legal entity from the USRLE entails legal consequences provided by the Civil Code and other laws applicable to liquidated legal entities. We discuss these in more detail below.

What are the legal consequences of excluding an organization from the USRLE?

1. Termination of the legal capacity of the excluded legal entity.

In the event a legal entity is recognized as inactive and excluded from the USRLE, its legal capacity is terminated [1]. If the decision of the registration authority (which is the tax inspectorate) on the exclusion of the organization from the USRLE as an inactive legal entity is not challenged by creditors and other interested parties, such organization is considered to have ceased its activities. When excluding a legal entity from the USRLE as inactive, Article 419 of the Civil Code applies to the obligations in which it participated, unless special consequences are established by law [2]. Furthermore, when the tax authority excludes a legal entity from the USRLE in cases established by Clause 5 of Article 21.1 of the Law on State Registration, there are no legal grounds for recognizing the indebtedness of the excluded legal entities as bad debt based on their liquidation [3].

2. Impossibility for the General Director (or other head) to hold the position of a sole executive body or be a participant in a legal entity after the entry of exclusion is made.

For a person acting without a power of attorney and a participant owning at least 50% of the shares in the excluded company, a 3-year ban is established on relevant participation in management bodies and ownership of shares in the authorized capital.

The established restriction is viewed as one of the mechanisms for ensuring the reliability of information contained in the USRLE. Such a temporary ban on creating new legal entities and participating in the management of existing legal entities applies to citizens who previously acted in bad faith by evading the necessary actions to terminate the legal entity in liquidation or bankruptcy procedures provided by law, which may also imply evasion of obligations to the legal entity's creditors.

Provisions on the refusal of state registration of legal entities (changes) in connection with the provision of information on registration as a participant and/or management body regarding a person who previously exercised such powers in a legal entity excluded from the USRLE in an administrative procedure must be applied in compliance with the principles of fairness of punishment, its individualization, and differentiation deriving from the Constitution of the Russian Federation, including taking into account the nature of the offense committed, the amount of harm caused, the degree of guilt of the offender, their property status, and other significant circumstances [4]. In particular, according to Subclause "f" of Clause 1 of Article 23 of the Law on State Registration, a refusal of state registration of information about a citizen entitled to act without a power of attorney on behalf of a legal entity is recognized as lawful if this citizen previously exercised the powers of the sole executive body of another organization regarding which the state register contains an entry on the unreliability of information about its address, and three years have not elapsed from the date of said entry at the time of submitting documents to the registration authority.

According to the legal positions of the Constitutional Court of the Russian Federation, a universally recognized principle of imposing liability in all branches of law is the presence of guilt—either proven or presumed but rebuttable—as an element of the subjective side of the offense, and any exception to this must be expressed clearly and unambiguously, i.e., provided directly in the law [5].

That is, in the absence of guilt of the management body in the exclusion of the company from the USRLE, such exclusion may be challenged. Thus, in a specific case, it was established that the bankruptcy receiver (who, from the moment bankruptcy proceedings are introduced, is the person acting without a power of attorney on behalf of the company) was not a participant in the company and was not a member of the management bodies of the specified legal entities. Therefore, they should not bear liability in the form of a restriction for a long period on the right to perform the duties of the sole executive body of the company for persons as a result of whose actions (inaction) unreliable information regarding bankrupt organizations was entered into the USRLE. Moreover, having commenced the performance of the duties of an arbitration manager, they acted reasonably and in good faith, posting information necessary for the company's creditors about their location. Considering that the entry in the USRLE on the unreliability of information about the legal entity was made earlier than the bankruptcy receiver commenced the performance of duties for this legal entity, no guilt was found in the manager's actions [6].

3. Risk of termination of powers in the management bodies of already existing legal entities.

According to the legal position of the Ministry of Finance of Russia, one of the guarantees for ensuring the reliability of information contained in the USRLE is the established temporary ban on creating new legal entities and participating in the management of existing legal entities for those citizens who previously acted in bad faith by evading the necessary actions to terminate the legal entity in liquidation or bankruptcy procedures provided by law, which may also imply evasion of obligations to the legal entity's creditors [7].

Despite this position of the Ministry of Finance, no actual examples of termination of powers of management bodies in already operating legal entities have been found in law enforcement practice at the time of writing this article.

4. Necessity to introduce a procedure for the distribution of assets of a legal entity excluded from the USRLE.

Often, a company excluded from the USRLE retains assets. How is their fate decided? In the event assets of a liquidated legal entity excluded from the USRLE are discovered, an interested person or an authorized state body has the right to apply to the court with a statement for the appointment of a procedure for the distribution of the discovered assets among persons entitled thereto. In this case, the court appoints an arbitration manager, who is charged with the duty of distributing the discovered assets of the liquidated legal entity.

Persons entitled to claim such assets are creditors, as well as participants of the company. An application for the appointment of a procedure for the distribution of discovered assets of a liquidated legal entity may be filed within 5 years from the moment information on the termination of the legal entity is entered into the USRLE. The procedure for the distribution of discovered assets of a liquidated legal entity may be appointed if there are sufficient funds to carry out this procedure and if it is possible to distribute the discovered assets among interested persons.

The procedure for the distribution of discovered assets of a liquidated legal entity is carried out according to the rules of the Civil Code of the Russian Federation on the liquidation of legal entities. Thus, the appointment of a procedure for the distribution of discovered assets of a liquidated legal entity upon the application of a creditor does not release the arbitration manager from the obligation, in particular, to analyze the company's accounting statements, take measures to identify other creditors, establish the order of priority of creditors' claims, and settle with creditors in accordance with Article 64 of the Civil Code.

The distribution procedure is carried out by initiating a case in the Arbitration Court. The application may be filed by both a creditor of the company and its participant. The court appoints an arbitration manager.

Payment of monetary sums to creditors of a liquidating legal entity is made by the liquidation commission in the order of priority established by Article 64 of the Civil Code, in accordance with the intermediate liquidation balance sheet starting from the day of its approval. Payment regarding a person excluded from the USRLE is carried out in a similar manner.

Thus, when a procedure for the distribution of discovered assets is appointed, the civil legal capacity of the liquidated legal entity is partially restored, and the arbitration manager approved by the court acts on behalf of the relevant legal entity with the powers of a liquidator. In particular, it is the arbitration manager who is obliged, having analyzed the data of the liquidation balance sheet, creditor claims, and other documents available to the liquidator, to compile an intermediate liquidation balance sheet containing information on the composition of the assets of the liquidating legal entity, the list of claims presented by creditors, the results of their consideration, as well as the list of claims satisfied by a court decision that has entered into legal force, and to establish the order of priority for satisfying creditor claims. Within the framework of these powers, the arbitration manager, as the sole executive body of the legal entity, also has the right to demand information about the liquidating legal entity from authorized persons and state bodies, as well as to act on its behalf in court as a plaintiff, defendant, or in another procedural status.

In accordance with Clause 8 of Article 63 of the Civil Code, the assets of the legal entity remaining after the satisfaction of creditors' claims are transferred to its founders (participants) who have rights in rem to these assets or corporate rights regarding the legal entity.

According to the Definition of the Constitutional Court of the Russian Federation No. 75-O-O dated January 27, 2011, the non-recognition of the founders (participants) of the debtor as bankruptcy creditors does not in itself violate their rights, since the nature of the obligations of the founders (participants) of the debtor is directly related to the liability of said persons for the company's activities within the limits of the value of the shares belonging to them. Moreover, the law does not deprive them of the right to claim a part of the assets of the liquidated company remaining after settlements with other creditors. Thus, upon the exclusion of a company from the USRLE, if the company possesses assets, such assets may be received by its participants if no other creditors are established.

At the same time, the legal basis for participants to obtain rights to the assets of an excluded company is precisely the distribution procedure. Other methods of protection (for example, recognition of ownership rights to such assets) are regarded as improper.

In a specific case, the courts indicated that the exclusion of a legal entity from the USRLE is not provided for by the Civil Code or other laws as a ground for the emergence of ownership rights of the founders of the legal entity to the assets belonging to the excluded legal entity. It does not follow from Article 63 of the Civil Code that company participants are automatically endowed with the assets of a company excluded from the USRLE. At the same time, the procedure for excluding an inactive legal entity from the USRLE by a decision of the registration authority is a special ground for the termination of a legal entity not related to its liquidation. A participant is not deprived of the opportunity to protect their rights to the disputed assets in the manner provided for by Clause 5.2 of Article 64 of the Civil Code, with the participation of a court-appointed arbitration manager, whose duties include analyzing the company's accounting statements, taking measures to identify creditors, establishing the order of priority of creditors' claims, and conducting settlements with creditors based on Article 64 of the Civil Code [8].

The distribution procedure includes the following stages:

1. Filing an application for the distribution of discovered assets following the liquidation of the legal entity. The applicant has the right to indicate the data of the SRO (Self-Regulatory Organization) of arbitration managers from among whose members the manager will be approved.
2. Based on the consideration of the application, the Arbitration Court appoints the procedure for the distribution of discovered assets and approves the arbitration manager.
3. The arbitration manager publishes a notice about the commencement of the procedure for the distribution of discovered assets of the liquidated legal entity in the Bulletin of State Registration
4. The arbitration manager sends inquiries to identify assets and compiles a liquidation balance sheet.
5. The arbitration manager conducts settlements with creditors.
6. Settlements with participants are carried out if undistributed assets remain: first, the distributed but unpaid part of the profit is paid to the company's participants; second, the assets of the liquidating company are distributed among the company's participants in proportion to their shares in the authorized capital of the company.

Is subsidiary liability possible when a legal entity is excluded from the USRLE?

A person who, by virtue of law, another legal act, or the constituent document of a legal entity, is authorized to act on its behalf, is obliged to compensate, upon the demand of the legal entity or its founders (participants) acting in the interests of the legal entity, for losses caused to the legal entity by their fault. Such liability is also borne by members of the collegiate bodies of the legal entity, except for those who voted against the decision that resulted in causing losses to the legal entity, or who, acting in good faith, did not participate in the voting.

If the primary debtor has refused to satisfy the creditor's claim or the creditor has not received a response to the presented claim from the debtor within a reasonable time, this claim may be presented to the person bearing subsidiary liability.

Part 3.1 of Article 3 of the Law on LLCs [9] establishes that the exclusion of a company from the Unified State Register of Legal Entities entails the consequences provided by the Civil Code for the refusal of the primary debtor to fulfill an obligation. In this case, if the non-fulfillment of the company's obligations (including as a result of causing harm) is due to the fact that the person acting on behalf of the company without a power of attorney, the collegiate management bodies, or persons having the actual ability to influence the company's activities acted in bad faith or unreasonably, subsidiary liability for the obligations of this company may be imposed on such persons upon the application of a creditor.

In accordance with Clause 2 of Article 64.2 of the Civil Code, the exclusion of an inactive legal entity from the Unified State Register of Legal Entities entails the legal consequences provided by the Civil Code and other laws applicable to liquidated legal entities. Thus, such persons may be held subsidiarily liable when a legal entity is excluded from the USRLE in an administrative procedure.

Clause 3.1 of Article 3 of the Law on LLCs regarding the possibility of holding management bodies subsidiarily liable for the company's non-fulfillment of obligations to creditors was introduced by Federal Law No. 488-FZ dated December 28, 2016, On Amendments to Certain Legislative Acts of the Russian Federation (the "Law No. 488-FZ"). According to Clause 1 of Article 4 of Federal Law No. 488-FZ, the amendments enter into force one hundred and eighty days after the day of its official publication. Law No. 488-FZ was officially published on the internet portal of legal information on December 29, 2016, in the Collection of Legislation of the Russian Federation on January 02, 2017, and in Rossiyskaya Gazeta on January 09, 2017. Thus, Clause 3.1 of Article 3 of Law No. 14-FZ has been effective since June 28, 2017.

Acts of civil legislation do not have retroactive force and apply to relations that arose after they were put into effect. The operation of a law extends to relations that arose before it was put into effect only in cases where this is expressly provided by law. Law No. 488-FZ contains no indication that it applies to legal relations that arose before it was put into effect. Consequently, the provisions of the law on holding responsible persons subsidiarily liable are possible only for legal relations (circumstances of the emergence of liability) that arose after the specified date.

In a specific case, it was established that the indebtedness of the company excluded from the USRLE arose before the plaintiff (the company's creditor) in 2014–2015. The actions imputed by the plaintiff took place before the entry into legal force of the provisions of Clause 3.1 of Article 3 of the Law on LLCs; therefore, the court had no grounds to apply the provisions of the rules of law to the disputed legal relations [10].

In what cases are persons held subsidiarily liable when a legal entity is excluded from the USRLE?

The exclusion of a legal entity from the USRLE by a decision of the tax authority is not in itself a sufficient ground for holding the head, members of collegiate management bodies, and persons who can exert actual influence on the company's activities subsidiarily liable, given that, according to said rule, one of the conditions for satisfying creditor claims is establishing the fact that the debt arose as a result of the unreasonableness and bad faith of the persons. Thus, a necessary criterion for holding said persons liable is the establishment of such unreasonableness and bad faith.

The burden of proving the bad faith or unreasonableness of the actions of the controlling bodies of the legal entity lies with the person demanding that the participants be held liable concerning the disputed legal relations.

Clauses 2 and 3 of Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 62 dated July 30, 2013, On Certain Questions of Compensation for Losses by Persons Belonging to the Bodies of a Legal Entity (the "Resolution No. 62") disclose the conditions under which the bad faith of actions (inaction) or unreasonableness of the behavior of a director/founder is considered proven.

The explanations indicated in Resolution No. 62 regarding the actions (inaction) of a director should be applied by analogy to the concepts of bad faith or unreasonable behavior of company participants. Actions (inaction) of a person controlling the company that led to the impossibility of satisfying creditors' claims should be understood as such actions (inaction) that were the necessary cause of such non-fulfillment, i.e., those without which the objective non-fulfillment would not have occurred. The court assesses the materiality of the influence of the actions (inaction) of the controlling person on the company's position, verifying the existence of a causal link between the named actions (inaction) and the actually occurred objective non-fulfillment.

The unreasonableness of a director's actions (inaction) is considered proven, in particular, when the director: adopted a decision without taking into account information known to them that was significant in the given situation; before adopting a decision, did not take actions aimed at obtaining information necessary and sufficient for its adoption, which are customary for business practice in similar circumstances (in particular, if it is proven that under the existing circumstances a reasonable director would have postponed the adoption of the decision until additional information was obtained); entered into a transaction without observing the internal procedures usually required or adopted in the given legal entity for entering into similar transactions (e.g., approval with the legal department, accounting department, etc.).

In a specific case, the court noted that, despite the company having profit, the director did not direct it to repay the debt to the creditor, although they had the opportunity to do so. The court also indicated that the director, despite the presence of signs of the company's insolvency, did not file an application with the Arbitration Court to declare the latter insolvent (bankrupt). These circumstances proved sufficient to hold the director subsidiarily liable in the form of recovering losses [11].

The exclusion of a legal entity from the USRLE as a result of actions (inaction) that led to such exclusion, as well as the non-fulfillment of obligations, is not in itself a sufficient ground for holding persons subsidiarily liable in accordance with the aforementioned rule. It is required that the unreasonable and/or bad faith actions (inaction) of the persons led to the company becoming incapable of fulfilling obligations to creditors, i.e., effectively led to bankruptcy.

Clause 3 of Article 64.2 of the Civil Code provides that the exclusion of an inactive legal entity from the USRLE does not prevent holding persons specified in Article 53.1 of the Civil Code liable. Resolution of the Constitutional Court of the Russian Federation No. 20-P dated May 21, 2021, indicates that subsidiary liability of persons controlling a company is a measure of civil liability, the function of which is to protect the violated rights of the company's creditors and restore their property status.

The losses of its creditors formed in connection with the exclusion of a limited liability company from the USRLE, the bad faith and (or) unreasonableness of actions (inaction) of persons controlling the company in exercising their rights and fulfilling duties in relation to the company, the causal link between the specified circumstances, as well as the guilt of such persons form the necessary set of conditions for holding them liable.

At the same time, the debt arising from subsidiary liability is subject to the same legal regime as other debts related to compensation for harm to the property of participants in circulation (Article 1064 of the Civil Code of the Russian Federation) [12]. When implementing this liability, the operation of the general grounds for civil liability is not canceled—to hold a person liable, the presence of all elements of the composition of a civil offense is necessary: unlawful behavior, harm, a causal link between them, and the guilt of the offender.

Furthermore, a significant element for holding a person subsidiarily liable is the bad faith of the management body. The Constitutional Court of the Russian Federation has repeatedly drawn attention to the bad faith of the behavior preceding the exclusion of a legal entity from the USRLE of those citizens who evaded performing the necessary actions to terminate the legal entity in liquidation or bankruptcy procedures provided by law, and indicated that such behavior may also imply evasion of obligations to the legal entity's creditors [13] (Definitions No. 580-O dated March 13, 2018, No. 2128-O dated September 29, 2020, and others).

Moreover, it follows from the principles of limited liability and protection of a business decision that this kind of liability cannot be presumed, even in the case of exclusion of an organization from the USRLE by a decision of the registration authority based on Article 21.1 of the Law on State Registration. When resolving such disputes, the plaintiff must prove that the impossibility of repaying the debt to them arose through the fault of the defendant as a result of their unreasonable or bad faith actions [14].

In a specific case, the court refused to hold the defendant subsidiarily liable because, in the case under consideration, the specific circumstances testifying to the presence or absence of a causal link between the actions of the defendant as the head and founder of the debtor and the fact that the debt to the creditor was not repaid were not established by all courts. The question of the presence or absence of signs of unreasonableness or bad faith in the defendant's actions was also not investigated by the courts [15].

Holding persons controlling a debtor subsidiarily liable is an exceptional mechanism for restoring the violated rights of creditors, and when applying it, courts must take into account both the essence of the legal entity construct, which implies the property separateness of this subject (Clause 1 of Article 48 of the Civil Code), its independent liability (Article 56 of the Civil Code), and the presence of broad discretion for participants of corporations, founders of unitary organizations, and other persons belonging to the bodies of a legal entity when adopting (approving) business decisions.

Persons will also not be subject to liability if such actions were committed before the entry into force of the provisions of Clause 3.1 of Article 3 of the Law on LLCs [16]. The liability is subsidiary (additional).

According to the legal position of the Constitutional Court of the Russian Federation, reflected in Resolution No. 20-P dated May 21, 2021, the failure of controlling persons to liquidate a limited liability company when the company has debts to creditors at the time of exclusion from the USRLE, especially in cases where the creditor's claims against the company have already been satisfied by a court, may testify to intentional neglect by persons controlling the company of their duties, an attempt to avoid the risks of being held subsidiarily liable within the framework of the company's bankruptcy case, leads to undermining the trust of participants in civil circulation in each other, destabilization of circulation, and if the company's debt arose to consumers — also to a violation of their rights protected by special legislation on consumer rights protection.

According to Clause 1 of Article 399 of the Civil Code, before presenting claims to a person who, in accordance with the law, other legal acts, or the terms of an obligation, bears liability in addition to the liability of another person who is the primary debtor (subsidiary liability), the creditor must present a claim to the primary debtor. If the primary debtor has refused to satisfy the creditor's claim or the creditor has not received a response to the presented claim from the debtor within a reasonable time, this claim may be presented to the person bearing subsidiary liability.

Within the meaning of the cited norms, the named persons may be held subsidiarily liable if the non-fulfillment of the obligation was the consequence of their bad faith or unreasonable actions, and not the exclusion of the legal entity from the register as such. Liability for the non-fulfillment of an obligation by such a legal entity may be imposed on the head or participant of a legal entity excluded from the register by a decision of the registration authority if the obligation to the creditor was not fulfilled due to a situation artificially created by the person forming and expressing the will of the legal entity, and not in connection with market and other objective factors, as a consequence of actions of the head (participant) guilty in the form of intent or gross negligence directed at evading the fulfillment of obligations to the counterparty.

It is necessary to take into account that civil legislation enshrines the presumption of good faith of participants in civil legal relations, and this rule also extends to heads of business companies, i.e., it is assumed that when adopting business decisions, including risky ones, they act in the interests of the company and its shareholders (participants).

Thus, the head is subject not only to the risk of recovery of corporate losses but also to the risk of being held liable to the counterparties of the legal entity managed by them (external liability to the company's creditors).

However, due to the extraordinary nature of said liability mechanisms, legislation and judicial practice have developed both material conditions (grounds) for imposing such liability (the presence of the entire set of which must be established by the court) and procedural rules for considering such claims.

For subsidiary (in actual bankruptcy) and tort liability (in the absence of a bankruptcy case, but in a situation of legal termination of the company's activity), the presence of losses for the injured person, the unlawfulness of the inflictor's actions with presumed guilt, and a causal link between these facts are necessary, and the liability of the head to external creditors arises not for the mere fact of non-fulfillment (impossibility of fulfillment) of an obligation by the company managed by them, but in a situation where the inability to satisfy the creditor's requirements occurred not in connection with market and other objective factors, specifically, was artificially provoked as a result of following instructions (implementing the will) of controlling persons.

It follows from the above that the exclusion of a legal entity from the register as a result of actions (inaction) of the head (company participants) that led to such exclusion, as well as the non-fulfillment of obligations, is not in itself a sufficient ground for holding them subsidiarily liable in accordance with the named rule. At the same time, not every doubt regarding the good faith of the actions of persons managing the company confirmed by indirect evidence should be interpreted against the defendants; such doubts must be sufficiently serious, i.e., clearly and convincingly confirm the absence of intentions to repay specific accounts receivable with the help of mutually consistent indirect evidence.

The burden of refuting the substantiated arguments of the applicant lies with the person being held liable. Holding a person liable can only be based on indisputable evidence. Upon the presentation of evidence that will unconditionally not testify to the presence of grounds for holding a person subsidiarily liable, the management body cannot be held to such liability [17].

In conclusion, it should be noted that when deciding on filing a lawsuit to hold the management bodies of a company excluded from the USRLE subsidiarily liable, a large number of circumstances should be analyzed, and at a minimum, evidence collected of the unreasonableness, bad faith behavior of management bodies, as well as the guilt of such persons, in the absence of the influence of external factors on the occurrence of losses.

In addition, the exclusion of a company from the USRLE entails the risk of restrictions on the registration of legal entities in the future, and a risk arises of the possible loss of assets belonging to the company, since participants do not automatically acquire rights to such assets.

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References

[1] Para. 1 Clause 3 Art. 49 of the Civil Code, Clause 1 Art. 21.1 of the Law on State Registration.

[2] Clause 41 of the Resolution of the Plenum of the Supreme Court of the Russian Federation No. 6 dated June 11, 2020, On Certain Questions of Application of the Provisions of the Civil Code of the Russian Federation on the Termination of Obligations.

[3] Letter of the Ministry of Finance of Russia No. 03-03-06/1/45454 dated May 18, 2022.

[4] Definition of the Judicial Chamber for Economic Disputes of the Supreme Court of the Russian Federation dated December 10, 2019, in case No. 307-ES19-13673.

[5] Resolutions of the Constitutional Court of the Russian Federation No. 1-P dated January 25, 2001, No. 13-P dated July 17, 2002, No. 12-P dated May 18, 2012, No. 2-P dated February 10, 2017, No. 25-P dated October 26, 2017.

[6] Resolution of the Arbitration Court of the Northwestern District No. A66-15906/2018 dated November 27, 2020.

[7] Letter of the Ministry of Finance of Russia No. 03-12-13/31033 dated April 17, 2020.

[8] Resolution of the Arbitration Court of the Volgo-Vyatsky District No. A29-17115/2019 dated December 21, 2020.

[9] Federal Law No. 14-FZ dated February 08, 1998, On Limited Liability Companies (the "Law on LLCs"). [10] Definition of the Judicial Chamber for Civil Cases of the Supreme Court of the Russian Federation No. 20-KG21-6-K5 dated September 14, 2021.

[11] Resolution of the Arbitration Court of the Northwestern District No. F07-7639/2022 dated July 04, 2022, in case No. A56-64205/2021.

[12] Clause 22 of the Review of Judicial Practice of the Supreme Court of the Russian Federation No. 1 (2020), approved by the Presidium of the Supreme Court of the Russian Federation on June 10, 2020; Definition of the Judicial Chamber for Economic Disputes of the Supreme Court of the Russian Federation No. 305-ES19-17007(2) dated July 03, 2020.

[13] Definitions No. 580-O dated March 13, 2018, No. 2128-O dated September 29, 2020, and others.

[14] Clause 1 of the Resolution of the Plenum of the Supreme Court of the Russian Federation No. 53 dated December 21, 2017, On Certain Questions Related to Holding Persons Controlling the Debtor Liable in Bankruptcy.

[15] Definition of the Supreme Court of the Russian Federation No. 307-ES20-180 dated August 25, 2020.

[16] Definition of the Supreme Court of the Russian Federation No. 306-ES19-18285 dated January 30, 2020.

[17] Resolution of the Arbitration Court of the Urals District No. F09-279/22 dated March 10, 2022, in case No. A60-38674/2020.