On 27 March 2025, a draft law was submitted to the State Duma which introduces significant changes to the rules for the payment of the value of a participation interest in the authorised capital of an LLC to a former participant in the company. Acsour experts reviewed the proposed innovations and explained how they would affect former LLC participants.
The Ministry of Economic Development of the Russian Federation has drafted and introduced Bill No. 876 952−8 ‘On Amending the Federal Law "On Limited Liability Companies"'.
The new draft law amends Federal Law No. 14-FZ ‘On Limited Liability Companies' dated 8 February 1998. Currently, according to this law, if a participant leaves a company or his share is bought out, he receives its actual value, which is
Acsour experts note that the book value of a participating interest calculated in this way is much lower than its market value. This leads to numerous court disputes: former participants challenge the amount of the actual value of the share paid on the grounds that it does not correspond to the market value of the participation interest. When considering such disputes, the courts determine the market value of the participation interest based on the market value of the property recorded on the company’s balance sheet.
The proposed draft law is aimed at simplifying the obtaining of the market value of the participatory interest owned by former participants. Thus, the innovations envisage the following:
a. If the amount paid exceeds the market value of the participating interest, such difference shall be returned to the company;
b. If the market value of the participating interest exceeds the amount paid, such difference is subject to additional payment to the Former Participant.
According to the authors of the draft law, the new rules will affect about 80% of Russian companies.
The draft law establishes a more convenient procedure for former participants and the company itself for the payment of the actual value of a share.
Acsour experts recommend:
1. Have the value of the share assessed by a professional valuer.
2. Keep track of the timing of the payment and document the milestones.
3. Take into account the possibility of unfair valuation of the share value and further litigation.
Acsour specialists will ensure correct support of transactions and minimise the risk of negative consequences.
The Ministry of Economic Development of the Russian Federation has drafted and introduced Bill No. 876 952−8 ‘On Amending the Federal Law "On Limited Liability Companies"'.
The new draft law amends Federal Law No. 14-FZ ‘On Limited Liability Companies' dated 8 February 1998. Currently, according to this law, if a participant leaves a company or his share is bought out, he receives its actual value, which is
- corresponds to the part of the company’s net asset value proportional to the size of the former participant’s participation share;
- determined on the basis of the LLC’s financial statements for the last applicable reporting period.
Acsour experts note that the book value of a participating interest calculated in this way is much lower than its market value. This leads to numerous court disputes: former participants challenge the amount of the actual value of the share paid on the grounds that it does not correspond to the market value of the participation interest. When considering such disputes, the courts determine the market value of the participation interest based on the market value of the property recorded on the company’s balance sheet.
The proposed draft law is aimed at simplifying the obtaining of the market value of the participatory interest owned by former participants. Thus, the innovations envisage the following:
- the former participant has the right to send an application to the company to establish the actual value of the share in the amount of the market value;
- the former participant or the company engages an appraiser to assess the market value of the participating interest. The appraisal results obtained shall be attached to the respective application of the former participant;
- if before the expiry of the term for payment of the actual value of the share the market value of the participation interest has not been established or the Former Participant or the Company has objections to the amount of the market value of the participation interest determined by the appraiser, the Company shall pay the actual value of the share in accordance with the general procedure with subsequent determination of the difference between the amount paid and the market value of the participation interest, in this case:
a. If the amount paid exceeds the market value of the participating interest, such difference shall be returned to the company;
b. If the market value of the participating interest exceeds the amount paid, such difference is subject to additional payment to the Former Participant.
- in case the Former Participant does not agree with the evaluation results, he/she has the right to challenge them in court.
According to the authors of the draft law, the new rules will affect about 80% of Russian companies.
The draft law establishes a more convenient procedure for former participants and the company itself for the payment of the actual value of a share.
Acsour experts recommend:
1. Have the value of the share assessed by a professional valuer.
2. Keep track of the timing of the payment and document the milestones.
3. Take into account the possibility of unfair valuation of the share value and further litigation.
Acsour specialists will ensure correct support of transactions and minimise the risk of negative consequences.
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