Draft Law No. 797057-8, Status: Passed 1st reading (March 2025) in the State Duma
Russia is lifting its long-standing ban on single-shareholder “matryoshka” corporate structures (where a wholly owned subsidiary is itself the sole shareholder of another company). The reform will:
Permit such structures provided the subsidiary's sole executive body is not the parent company and is not the same person as the parent company's general director.
Eliminate current workarounds requiring artificial minority shareholders.
Particularly benefit M&A deals and holding company restructuring.
Practical Tip: Review existing Russian corporate structures for optimization opportunities.
Board Member Resignation Rules Clarified
Draft Law No. 724347-8, Status: Passed 1st reading (February 2025) in the State Duma
The draft law codifies specific circumstances triggering automatic resignation from boards of directors, including:
Death or legal incapacity,
Bankruptcy of an individual,
Written resignation notices,
Court-ordered disqualifications.
Key Change: Creates more predictable corporate governance but may require updates to internal policies.
Major Reform of Pre-emptive Rights in Russian LLCs
Draft Laws No. 788656-8 and No. 788669-8, Status: Passed 1st reading (January 2025) in the State Duma
Key Provisions of the Reform
Russia is moving to modernize its rules on pre-emptive rights in LLCs — a long-awaited reform that could bring greater flexibility to corporate transactions:
Optional Pre-emptive Rights
LLCs could fully waive pre-emptive rights for some or all shareholders via charter amendments (requiring unanimous and notarized approval). Alternatively, rights could be made conditional (e.g., time-limited or triggered by specific events).
Asymmetric Application
Waivers would not automatically apply to a new shareholder acquiring a share from a person in respect of whom the pre-emptive right did not apply or was conditional.
Simplified Procedures
The shareholder who decides to sell his share is entitled not to wait for the minimum period of 30 days statutory given to the other shareholders for their pre-emptive right.
Why Uncertainty Remains
Despite legislative progress, a landmark Moscow Commercial Court ruling (Case No. № А40- 252360/24) of 20.02.2025 declared complete waivers of pre-emptive rights invalid, thereby contradicting:
The Supreme Court’s 2020 “Yana Tormysh” decision which upheld charter modifications (Case No. А65-3053/2019),
Russia’s model charters (which explicitly allow such waivers).
The case involved a 50% shareholder who successfully challenged waiver provisions they had originally voted for — highlighting risks of relying on proposed “flexible” interpretations at least until the draft law is passed.
Fair Value Payouts for LLC Shares
Draft Law No. 876952-8, Status: Preliminary review by the State Duma
The proposed amendments would fundamentally alter how share valuations are calculated in Russian LLCs, addressing a long-standing gap between statutory book value and market realities.
Key Provisions:
Market-value payouts: Shareholders could demand payouts based on market valuation of the share (replacing the current book-value approach).
Triggering events: Applies to voluntary withdrawals and compulsory redemptions under Article 23 of Russia’s LLC Law.
Documentation requirements: Formal written request + independent appraiser’s report
Rationale: The reform responds to systemic undervaluation issues where book value of the share — often distorted by various manipulations with the accounting statements — fails to reflect true market worth. Under current rules, dissenting shareholders frequently face protracted litigation to secure fair compensation, particularly when withdrawing under oppressive conditions or during squeeze-out scenarios.
As these corporate law reforms progress through adoption, businesses should prepare for their practical implications — from restructuring opportunities to updated governance requirements. Our team stands ready to assist with seamless implementation, ensuring your Russian entities remain compliant while maximizing operational flexibility under the new rules.