Compensation for Losses of Founders and Shareholders

Representing the interests of the founders and shareholders of a legal entity in cases of damages

As a general rule, persons representing the interests of a legal entity, such as the sole executive body, the board of directors, are obliged to act solely in the interests of the company based on the principles of reasonableness and good faith. However, in practice, there are often cases of dishonest actions on the part of the person in charge of the organization. In such cases, the legal entity itself and, accordingly, its participants (founders) suffer losses.

Losses in civil law are understood as expenses that a person whose right has been violated has made or will have to make to restore the violated right, loss or damage to his property, as well as lost income that this person would have received under normal conditions of civil circulation if his the right has not been violated.

As a rule, taking into account the fact that entrepreneurial activity is a risk-based activity, the fact of the occurrence of losses due to the fault of the head of a legal entity can be very difficult to prove. Many factors can affect the losses of the company as a whole. Such as the economic situation, the wrong decisions of the founders of the company, as well as the dishonesty and unprofessionalism of the executive bodies, and sometimes deliberate actions against the interests of a legal entity that are committed for the sake of personal economic interests.

The main actions that cause losses to a legal entity may be: illegal alienation of property by the head of the company in the absence of his authority to such alienation without the consent of the founders; alienation of the organization's assets at a reduced cost; violation of the requirements of the law, resulting in the imposition of penalties on the legal entity and other actions.

In cases of this category, it is important to study not only the facts of violations by the executive bodies of the company that caused losses, but also a detailed acquaintance with the conditions under which the founders vested powers on the head of the legal entity. Also, the establishment of a causal relationship between the actions (inaction) of the executive body and the onset of negative consequences for the organization.

This type of disputes refers to corporate disputes and is subject to consideration in the arbitration court. A claim or other pre-trial procedure for this category of disputes is not mandatory.

The case is considered in accordance with Chapter 28.1 of the Arbitration Procedure Code of the Russian Federation. The founders and participants of a legal entity may act as plaintiffs. The plaintiff must prove the existence of circumstances that testify to the bad faith and (or) unreasonableness of the actions (inaction) of the head of the company, which entailed adverse consequences for the legal entity.