The Supreme Court of the Russian Federation approved a review of practice on holding parties liable for the debts of inactive legal entities
On November 19, the Presidium of the Supreme Court of the Russian Federation summarized the practice of arbitration courts in cases involving the attraction of controlling persons to subsidiary liability for the debts of inactive legal entities.
One of the most important innovations is that the Supreme Court of the Russian Federation uses the term “controlling person,” thereby applying to non-bankruptcy proceedings the logic established by the legislator for attracting to subsidiary liability on the basis of the Federal Law No. 127-FZ on Insolvency (Bankruptcy). This means that a participant, director, actual beneficiary is at risk if the company has been forcibly excluded from the Unified State Register of Legal Entities by a decision of the tax authority.
However, at the same time, the Review affirmed that creditors may apply to the court with a petition to attract to subsidiary liability without waiting for the formal exclusion of the legal entity from the Unified State Register of Legal Entities – a legal dispute may be initiated at the moment when the debtor has actually, but not legally, ceased its activities.
Thus, the Supreme Court of the Russian Federation has significantly simplified the process for creditors to recover debts from culpable owners and managers of inactive companies.
