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In practice, shareholders in a limited liability company (LLC) often face situations where they are unable to reach a mutual agreement on company management. As a result, the risk is high of getting into the so-called deadlock, where a deep divergence in the views on further business development between the owner scan block the operations of the company.

What are the ways to get out of a prolonged conflict in a limited liability company and what risks should one anticipate? See the “Mosgo & Partners” newsletter below.

The complete text of the newsletter You can find in the below attached file.

The Russian legislation provides that parties should negotiate bona fide. Should they fail to conduct negotiations in good faith, the breaching party is to pay damages. This was in the case Auchan LLC v. Decort LLC, when the latter claimed over RUB 15,6 million (approximately EUR 226 000) of damages resulting from bad faith of the contracting party. Held, Auchan LLC was liable for wrecked negotiations and obligated to pay the whole sum of lost profit.

Reputable Russian rating Pravo.ru-300 has listed Mosgo and Partners law firm among the best law firms for the second consecutive year.

Associate of Mosgo & Partners Elena Cherkasova made a report on the meeting of the Work group on Start-ups of the Committee for digital technologies of the Russian-German Chamber of Commerce (AHK), which was held in Moscow on 2^nd of November 2017.

Russian legal entities are obliged to determine and store information about their beneficial owners (individuals who control more than 25% of the charter capital). At least once a year they shall update this information and fix it in documents. State authorities are allowed to request such information from the company. Failure to provide it may result in administrative fine of up to RUB 500 000.

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The second edition of the monograph edited by Dr. Gerhard Schlitt and Dr. Gabriel Mueller "A statutory share in inheritance: practical guide" (Schlitt/Müller, Handbuch Pflichtteilsrecht, 2^nd edition, C.H. Beck-Verlag, 2017), has been recently published in a leading German publishing house for legal literature C.H. Beck. The book is devoted to German and international inheritance law, in particular, to legal regulation of statutory share of successor in inheritance. 

From November 1, 2017, the arbitral tribunals (treteyskiye sudy) that failed to obtain the permission from the Government of the Russian Federation will no longer be allowed to hear disputes. Introduction of the authorization-based order of granting the right to establish institutional arbitral tribunalsis aimed at achievingone of the main objectives of the non-government arbitration reform in Russia, namely, combatting "puppet" arbitral tribunals, enhancing trust to arbitration and improving its quality.

In 2016, the rules for determining cadastral value changed. The changes consisted, on the one hand, in the suspension of provisions of the Federal Law “On Appraisal Activities” that previously regulated the procedure for state cadastral appraisal (hereinafter, SCA), and, on the other, of the adoption of the Federal Law “On State Cadastral Appraisal”.

By his Order No. 202 dated May 9, 2017, the President of Russia introduced enhanced security measures for the period of the FIFA Confederation Cup Russia 2017 and FIFA World Cup Russia 2018. These measures include, among others, rigorous migration registration rules for foreign nationals visiting the Host Cities during these periods.