ARTICLE BY JULIA KARPOVA IN WEALTH NAVIGATOR MAGAZINE
Infralex partner Yulia Karpova in the article for Wealth Navigator magazine focused on the legal nuances of protecting business owners from unfair management actions.
According to Yulia, improper structuring of a business, considering the provisions of legislation and legal practice, can overcomplicate the process of owners' rights protection, even if there are clear signs of unfair management actions.
As judicial practice shows, civil law methods of protection, such as:
- obtaining documents on the companies' activities in court or in extrajudicial procedure;
- identifying transactions and actions committed not in the interests of the company;
- filing claims in court to challenge transactions or to recover damages from management,
in conjunction with incorrect structuring of business ownership, do not provide the full implementation of the rights of owners in the situation of corporate conflict.
"When structuring business ownership, these features should be mentioned and appropriate mechanisms for ensuring interests should be used:
- acquisition of a share in the authorized capital of both holding company and subsidiaries;
- fixing in the charter of the holding company the obligation of the director to receive documents on the activities of subsidiaries and provide them upon request of a shareholder (participant). It is also advisable to fix in the charters of the holding and subsidiary companies the obligation of subsidiaries to make significant transactions only with the consent of the general meeting of shareholders (participants) of the holding company <…>;
- conclusion of a corporate agreement between shareholders (participants) of holding and subsidiary companies, establishing both the rights and obligations of each of the parties, as well as liability for failure to fulfill obligations,” notes Yulia Karpova.