Dmitry Uryakin told Mashnews what can be grounds for excluding a foreign co-owner from the company

Many foreign co-owners of Russian businesses are forced to withdraw due to the risk of sanctions from the authorities of their home countries. Due to the fact that the procedure for withdrawal of partners from so-called “unfriendly” countries is complicated, they cease to participate in management and relevant decision-making, which often harms the activities of companies. Russian law provides for a special procedure for the exclusion from LLCs of “hostile participants” who, through their actions or even passive behaviour, hinder the normal operation of companies.

“Yes, participants from “unfriendly” countries are in a certain sense “affected” in their rights: they cannot freely alienate their share, receive full dividends and so on. But a foreign partner cannot be excluded just because he is from an “unfriendly” country. However, a foreign co-owner has no right to avoid participation in the activities of the business, even if he fears the application of sanctions against him. Such inaction, which significantly hampers the company’s work, can be considered as grounds for excluding a participant,” Dmitry Uryakin, Senior Associate at Maxima Legal, explained to Mashnews.

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