The Law On Limited Liability Companies allows for situations where a shareholder’s share may be transferred to the company for one reason or another, and the shareholder ceases to hold a share in the company. In such a case, the company must pay the shareholder the actual value of the shareholder’s share. For example, this situation arises in the following cases[1]:

• if a shareholder is permitted to withdraw from the company (as is expressly provided for in the company’s charter), and the shareholder has applied for withdraw;
• if a shareholder requires the company to acquire the shareholder’s share, provided that the company’s charter prohibits a shareholder from withdrawing from the company and from selling his share to a third party, and the other shareholders have refused to purchase the shareholder’s share;
• if the company’s charter provides that the heirs of a shareholder may not become shareholders of the company, or other shareholders’ consent is required to do so, and such consent has not been given; or
• if, at the request of creditors, the share, or a portion thereof, owned by a shareholder of the company becomes the subject of execution proceedings.

The actual value of the share corresponds to a portion of the value of the company’s net assets that is proportional to the size of the shareholder’s share. The value of the company’s net assets is calculated on the basis of the company’s financial statements. For this reason, the actual value of a share may differ from its market value. Often it may be lower.

There have been previously court disputes  in which the plaintiffs have attempted to bring the actual value of a share closer to its market value. The courts in a number of cases have argued that the market value of real estate, rather than its accounting residual value[2], should be used to calculate the value of the company’s net assets and the actual value of a share.

At the end of March 2025, a draft law was submitted to the Russian State Duma, according to which the actual value of a share is to be determined and paid at its market value, if the person, to whom the actual value of a share, or a portion thereof[3] is to be paid, so declares. An appraiser will be engaged to determine the market value of a share. At the same time, the draft law states that if the person, to whom the actual value is to be paid, requests that the market value of a share be paid, it will not be permitted to use any value, except the market value.

These changes could result in significant risks to joint ventures if a shareholder withdraws, as the market value of a share may be much higher than its actual value, which could create significant risks to the very existence of the company.

We recommend reviewing your company’s charter to determine whether it prohibits a shareholder from withdrawing from the company and making other changes to the charter that will protect your company’s activities if a shareholder decides to withdraw.

We will be happy to draft amendments to your company’s charter for you that will meet your needs and minimize the risks associated with the withdrawal of shareholders.

Do you have any questions or would like to discuss something? Please send an email to Anton Kabakov or Alexandra Yudina.

[1] Article 23 of Federal Law No. 14-FZ dated February 8, 1998 On Limited Liability Companies.

[2]Resolution No. 15787/04 of the Presidium of the Russian Supreme State Commercial Court dated June 7, 2005 in Case No. А53-15243/02-С4-11, Resolution No. 5261/05 of the Presidium of the Russian Supreme State Commercial Court dated September 6, 2005 in Case No. А50-10328/2004-Г25, Resolution No. 16191/11 of the Presidium of the Russian Supreme State Commercial Court dated April 17, 2012 in Case No. А40-18600/05-134-138, and Ruling No. ВАС-5228/13 of the Russian Supreme State Commercial Court dated May 6, 2013 in Case No. А54-329/2010.

[3] Draft Federal Law No. 876952-8 On the Introduction of Amendments to the Federal Law ‘On Limited Liability Companies’.

When a company is liquidated, the employer is obligated to pay the dismissed employees their average monthly earnings for the period during which they are looking for a new job. However, in practice, it is often the case that the right to such payment does not arise until after the completion of the liquidation process.

Several years ago, the Russian Constitutional Court highlighted this issue, and amendments were even introduced to the Russian Labor Code. Yet the core problem remains: by the time the right to payment arises, the legal entity will have ceased to exist. As a result, the employee—or, in some cases, the prosecutor’s office—will file a lawsuit to recover the unpaid amounts, and courts will typically rule in their favor.

This creates potential liabilities for the company, the liquidator, and the founders. To avoid such situations, it would be advisable to make provisions for possible payments already in the liquidation phase.

To read the full article, click here (in Russian).

On March 19, 2025, the SPIBA Legal Committee held a webinar on “Instruments of saving and investing capital: Personal Funds and Closed-End Investment Funds (CEIFs)”. It was organized and moderated by Julia Talagaeva, Senior Associate at Forte Tax & Law.

The lawyers at Forte Tax & Law who specialize in dispute resolution have successfully represented a Russian IT group of companies in a lawsuit concerning the recovery of remuneration under an agency agreement.

Forte Tax & Law would like to remind you of the importance of holding an annual meeting of shareholders (members) of your company and of drawing up minutes of the meeting. This year, meetings are to be held in accordance with the updated rules, which requires more attention to avoid mistakes.

LLCs must hold an annual meeting by April 30, 2025, and JSCs must do so by June 30, 2025. Failure to hold a meeting or to meet the deadline could potentially result in substantial fines.

The mandatory matters to be decided at the annual meeting are:

• the approval of the balance sheet and the statement of financial performance;
• the approval of a company annual report.

Depending on the structure of your company’s management bodies and the provisions of the charter, the annual meeting must also adopt resolutions, in particular, on the formation of the board of directors and on any other matters, for example, on the distribution of dividends, approval of transactions, conduct of an audit, etc. The notice of the meeting must contain all matters proposed for discussion at the general meeting of shareholders (members), along with the relevant documents.

If your company’s charter (relevant for LLCs and non-public JSCs) has not been amended to allow annual meetings to be held fully in absentia, these meetings must be held in person—i.e., in the joint presence of shareholders (members) or in person/absentia (when some participants are present in person while others are in absentia). Where shareholders (members) are to be represented by proxies in a meeting, it is essential that these proxies must be issued with powers of attorney that can prove their authority. Powers of attorney issued in foreign countries must be apostilled or legalized and accompanied by a Russian translation.

In addition to the in-person format, an annual meeting can also be held remotely.

All the results of the meeting must be recorded in minutes signed as required by the charter. Please note that if the meeting elects an executive body, such a resolution must be notarized, irrespective of the provisions of the charter.

We would be pleased to assist you with holding meetings and drawing up all necessary documents as prescribed by the new rules.

If you have any questions or you would like to discuss something, please send an email to Julia Talagaeva or Alexandra Yudina.

Pravo-300 has published the results of the individual ranking of lawyers for 2024.

Anton Kabakov and Natalia Vorobyeva are recognized as recommended lawyers!

Congratulations to our colleagues!

On March 11, 2025, the BEPS Academy hosted a round table discussion ‘MNO Belarus-Russia’, at which Anton Kabakov, Partner at Forte Tax & Law, spoke about the approaches that the Russian Federal Tax Service takes to transfer pricing (TP) audits.

The participants discussed key regulatory trends and some practical issues facing companies, including the increased risks and responsibilities associated with related party transactions and the need for companies to self-adjust the tax base to avoid fines and secondary adjustments. The discussion also covered the fact that the Russian Federal Tax Service is shifting its control activities to the stage of a pre-audit analysis.

Anton Kabakov plans to conduct a 4-lecture course on the regulation of transfer pricing (TP) in the near future.

The BEPS Academy is a recognized platform for the exchange of experience and training of specialists in international taxation, and we will be pleased to see you among the audience to discuss TP issues. The course is to take place in April – early May.

If you would like to discuss your case and receive answers to your questions about topical issues, please send an email to Anton Kabakov.

Ekaterina Beliaeva, Associate at Forte Tax & Law, comments on this issue for the Vecherniy Peterburg newspaper:

• An employee can still substantiate his or her travel expenses even if the employee loses supporting documents;
• If the employer believes that submitted documents do not substantiate the expenses claimed, the employer may withhold the expenses from the employee’s pay;
• The employee, if the employee disagrees with such withholding, may apply to the labor inspectorate or the court.

To read the full article, click here (in Russian).

Letter No. 27-01-21/11349 of the Russian Ministry of Finance dated February 10, 2025 was recently published, which is another attempt to clarify the procedure for including dividends in the customs value of goods.

The Russian Ministry of Finance, like the Russian Supreme Court before it, points out that in a situation where goods are imported as part of transactions between members of the same group of companies, and the income (revenue) of a Russian buyer is primarily derived from the sale of imported goods, the decision to pay dividends is solely at the discretion of the foreign group of companies, which creates a risk of manipulation of the customs value.

If the customs authorities find that the payments described as dividends are such only in form, but in essence ensure that the seller, which is a member of the same group of companies with members of the company, receives part of the income (revenue) due to it from the sale of imported goods, such payments will be included in the customs value of the goods pursuant to Article 40(1)(3) of the EAEU Customs Code.

In this new letter, the Russian Ministry of Finance describes the circumstances that the declarant must confirm for the declared customs value of the imported goods to be recognized as valid. The Russian Ministry of Finance states that the declarant is required to confirm that the price actually paid or payable for the goods was formed in the ordinary course of trade—i.e., the goods were purchased under competitive market conditions. Simply put, the importer must show that any person can purchase the goods at the same price and under the same conditions as the importer that pays dividends, but without a shareholder relationship and without the payment of dividends. In practice, this can be quite difficult in a situation where the sale of goods is arranged through the importer’s own network of local subsidiary distributors.

What is interesting about the new clarifications is that in the letter the Russian Ministry of Finance takes the position that dividends should also be included in the customs value of goods:

• if the declarant fails to provide information on the exporter’s pricing methodology; or
• if there is no evidence of the market level of the price, including due to a limited number of buyers of such goods.

In practice, when the customs authorities check for the inclusion of dividends, they often (but not always) disregard the declarant’s arguments that the price of the imported goods corresponds to the market price level.

Therefore, the new clarifications of the Russian Ministry of Finance give hope that in the future, when conducting inspections, the customs authorities will take into account the fact that the price of the imported goods corresponds to the market level and, consequently, there is no manipulation of the price, no understatement of the customs value and no reasons for revising it.

Furthermore, it is the declarant that bears the burden of proving the market level of the price, the method of its formation, taking into account the usual market factors, the submission of transfer pricing documentation, and the calculation of such price elements as  the production cost, the markup that covers expenses and provides a market markup for a relevant product, etc. In this regard, it will be crucial to prepare a detailed response to the very first request from the customs authorities.

If you have any questions or you would like to discuss something, please send an email to Julia Talagaeva.