New developments in the subsidiary liability of shareholders of Russian companies
The subsidiary liability of controlling entities for the debts of their subsidiaries is currently one of the most dynamic areas of Russian corporate and insolvency law. The recent review approved by the Presidium of the Supreme Court of the Russian Federation in November 2025 marks a further tightening of the jurisprudential approach, with a clear shift in favor of creditors.
1. The new scope of “inactive” companies
The Supreme Court’s review concerns cases of subsidiary liability of controlling entities for the obligations of so-called “inactive” companies (in Russian, “nedejstvyjushee juridicheskoe litso“).
The concept of “inactivity” is understood broadly, encompassing not only companies formally removed from the Russian Register of Legal Entities (EGRYUL) for failure to file financial statements or engage in transactions, but also those that have effectively ceased operations, prior to or regardless of the removal.
2. Conditions for Subsidiary Liability
The Supreme Court clarifies that controlling entities may be held subsidiary liable when, due to their conduct, it has become impossible to satisfy the creditors of the inactive company.
The causal link is therefore established by the parent company’s behavior that made it impossible to satisfy creditors: for example, through an unlawful depletion of the company’s assets.
If the parent company fails to provide sufficient information and documentation to support the reasons for the inability to satisfy creditors’ claims, it is presumed that such inability is due to the parent company’s actions.
A significant aspect is the functional retroactivity of the provisions in question: subsidiary liability can be declared even if the debt to the creditor arose before the entry into force of Article 3, paragraph 3.1 of the Law on Limited Liability Companies (OOO), which expressly provides for such liability. The Court emphasizes the substantive nature of the control and abuse, rather than the chronological nature of the new legislation.
3. Timing and Legitimacy of the Creditor
The review clarifies that the creditor retains a broad scope of action, including, in particular:
- Failure to file objections to the deletion of the debtor company from the EGRYUL does not preclude the subsequent filing of a subsidiary judgment against the controlling entities;
- The creditor may act even before the formal deletion from the EGRYUL, if the company has effectively ceased its business;
- The existence of a judicial order confirming the existence of a debt owed to a company delisted from the GRYUL is not an essential requirement for a creditor to seek a declaration of subsidiary liability from the parent company.
In other words, creditor protection is not conditional on “perfect” supervision during the administrative deletion phase, nor is it suspended until the formal termination of the deletion: what is relevant is the substantial impossibility of satisfying the debt due to the conduct of the parent companies.
4. Liable parties: actual parent companies and fiduciary directors
The review emphasizes the centrality of the figure of the “controlling party,” understood in the broad sense: not only the majority shareholder, but anyone who exercises a decisive influence over the company’s decisions.
From this, it follows that, on the one hand, the mere fact that a single shareholder of the company also simultaneously holds the office of director, in itself, is not a sufficient condition to hold him liable for the obligations of the inactive company; On the other hand, even a minority shareholder, with respect to whom it is possible to demonstrate the effective ability to determine the company’s actions, may be considered subject to subsidiary liability in the same way as a controlling shareholder.
A particularly significant development concerns trustees: the merely “nominal” performance of the functions of director or administrator does not exempt them from subsidiary liability for the debts of the inactive company. The Court thus confirms the possibility of calling in legal representatives in lieu of representation, in line with the doctrinal approach that sees this as a toughening of practice aimed at strengthening the position of creditors and imposing greater levels of diligence on beneficial owners and legal representatives.
The combination of liability of the actual controlling shareholder and the nominal administrator aims to prevent hidden structures or fictitious ownerships from being used to dissipate corporate assets without personal consequences.
5. Practical Implications
The Supreme Court’s ruling has significant systemic effects:
- For creditors, the range of protection tools is broadened, allowing targeted actions against those who effectively caused the company’s insolvency or inactivity, even in the absence of opposition to the cancellation and even before formal dissolution;
- For controlling shareholders and beneficial owners, the risk of personal exposure increases, especially in the presence of opaque conduct in management, recordkeeping, and during the “winding down” phase of the company;
- For trustees, any illusion of immunity is lost: accepting a merely formal assignment can translate into full financial liability, in the presence of conduct that has contributed to making it impossible to satisfy creditors.
Overall, subsidiary liability for inactive companies is gaining ground as a tool for penetrating the corporate veil, targeting de facto control structures and discouraging the opportunistic use of deregistration as a way to escape corporate obligations in Russia.
