• Corporate structure protecting owners from personal liability.
• Minimum capital investment of RUB 10,000 required.

An LLC is a corporate structure that protects its owners from being personally responsible for any liabilities incurred by the company. The minimum capital investment required to establish an LLC is RUB 10,000.

Ideal for businesses seeking liability protection with minimal capital investment.

• Liability divided between partners.
• Liability redistributed if a partner faces bankruptcy.

In a Double Liability Company, one or more persons can form the company, with the liability divided among the partners. If a shareholder becomes bankrupt, their liability is distributed among the remaining partners according to their contributions.

Suited for businesses where partners are willing to share liability.

• Owned by investors holding shares.
• Minimum capital requirement of RUB 100,000.

This company structure is owned by its investors, with each investor holding a share proportional to their investment. The company requires a minimum capital of RUB 100,000, which is divided into shares.

Best suited for large-scale operations with multiple investors.

• Shared responsibilities and liabilities among partners.
• Unlimited liability for partners.

A General Partnership is a business arrangement where two or more individuals share responsibilities, assets, profits, and legal liabilities. All partners have unlimited liability, meaning they are personally liable for the business's debts.

Suitable for small businesses where partners are deeply involved in operations.

• Mix of limited and general partners.
• Limited partners provide capital but do not manage the business.

In a Limited Partnership, some partners contribute capital and have limited liability, while others, the general partners, manage the business and have unlimited liability. Limited partners cannot participate in the management of the company.

Ideal for businesses with passive investors and active management.

• Available from the Federal Tax Service.

Corporate information can be obtained from the Federal Tax Service at www.nalog.ru. This resource is essential for verifying company details and understanding their legal and financial standing.

Use the Federal Tax Service for official company information.

• Available from the Federal Tax Service and private reporting agencies.

You can obtain information on the financial state of affairs for companies and industries through the Federal Tax Service. Additionally, various private reporting agencies offer credit checks to assess financial health and creditworthiness. For a list of private reporting agencies in Russia, refer to Interfax or SKRIN.

Consider both public and private sources for comprehensive credit checks.

• Information typically found in credit reports.

Judgment searches are generally included in credit reports provided by private agencies. These reports can reveal whether a business has any existing judgments against it, providing critical risk management information. For more details, visit Fedresurs.

Use credit reports to uncover judgments against a business.

• Contracts signed by the parties with all appendices (if any)
• All unpaid invoices
• A statement of account indicating the payments and credit notes related to the outstanding invoices
• Transportation documents with the debtor's acknowledgment of receipt and customs declarations
• Correspondence and other documents related to the debt
• An extract from the trade register of your company
• A Power of Attorney

To pursue legal action, the following documents are essential: contracts signed by the parties with all appendices (if any), all unpaid invoices, a statement of account indicating the payments and credit notes related to the outstanding invoices, transportation documents with the debtor's acknowledgment of receipt and customs declarations, correspondence and other documents related to the debt, an extract from the trade register of your company, and a Power of Attorney.

Ensure all contractual and supporting documents are prepared and validated before initiating legal proceedings.

• Not commonly used in Russia.
• Low risk of recharacterization as a security interest.

Retention of title provisions are not widely practiced in Russia, and there is minimal risk that such a provision would be recharacterized as a security interest under current legal frameworks.

Consider the limited enforceability of retention of title in Russia when drafting contracts.

• A mandatory 30-day warning notice before enforcement claims.

A warning notice to the debtor is mandatory 30 days before filing any enforcement claims. The warning notice should include:

• Creditor name and overview of the claim
• The total amount of the claim, including penalties (interest)
• Payment method required
• A warning that the claim will be enforced through the enforcement authority if not settled by the required date
• Information on how to dispute the claim

If this measure has been taken and the payment still has not been made, then the creditor may file for enforcement.

Always send a comprehensive warning notice before proceeding with court enforcement.

• Late payment interest is not standard but can be agreed upon.
• Debt collection costs depend on contractual agreements.

It is not standard to pay late payment interest fees in Russia. If, however, an agreement is reached, and the debtor is ready to pay the interest fine, as per currency control and regulations, it's necessary to:

• Sign an additional agreement on the matter of payment of the interest
• Confirm the changes in the currency deal passport
• Issue an invoice from you totaling the amount of the interest
• Reconcile the payments with the debtor's bank

Debt collection costs are not chargeable to debtors in Russia, as there is no such law currently present. Payment of debt collection costs depends solely on the contractual agreements between you and your debtor.

Negotiate and document interest and collection costs within the contract to ensure enforceability.

• General limitation period: 3 years.
• Some actions have a 10-year limitation period.

Once a debtor is aware, or should be aware, of overdue settlements, the limitation period of three years (as per the Civil Code of the Russian Federation) begins. Claims may also be considered for a limitation of ten years from the date of violation. Additionally, certain actions are not subject to limitation periods, such as negatory actions (that is, actions available to owners to prohibit violations of their right to use and dispose of property in their possession).

Act within the 3-year limitation period to protect your claim rights.

• Main methods: Non-state commercial arbitration and mediation.
• Not widely used or enforced prior to court proceedings.

Although largely unpopular and not enforced by courts prior to legal proceedings, the two main methods of ADR are non-state commercial arbitration and mediation. Commercial arbitration can be either institutional or ad hoc arbitration and is governed by the selected rules stated within the parties' signed contracts. Mediation is not a popular form of ADR due to the fact that proceedings in state commercial courts are generally cheaper for the parties involved.

Consider ADR for dispute resolution, but be aware of its limited use in Russia.

State commercial court proceedings are generally public, with rulings of the courts published online (www.kad.arbitr.ru/Kad) shortly after their issuance. Some cases may be kept confidential to preserve commercial or state confidentiality.

Prepare for public proceedings and ensure all documentation is complete and submitted correctly. For more information, visit the State Commercial Court Portal.

Claims may be submitted via the portal or via post to the chancellery of the court. The applicable state fee must be paid with confirmation of settlement enclosed with the set of documents. Documented evidence (copies) must also be attached to the statement of claim.

Any statement of claim which does not meet the requirements (e.g., there is no confirmation of payment of the state fee), the court will reject the statement of claim or offer the party up to one month to rectify the issues. If all requirements are met, the court will issue and publish a ruling accepting the claim and setting the date, time, and place of these hearings.

Courts are not bound by statutory time limits set for each procedure given the volume of cases. However, the appointment of the first session of hearings usually occurs within two to three weeks from the date of submission of the statement of claim.

Any claimant must notify the defendant and debtor of the claim with the statement and relevant appendices. The official documents confirming posting to the defendant must be attached to the set of documents submitted to the court with the claim. Without confirmation from the defendant of receipt of the claim, the court will not progress further with the case. There is no clear distinction between the disclosure stage and the trial. Although parties are expected to disclose evidence during the preliminary hearings, it is common in practice to provide additional evidence during the main court hearings. There is no cross-examination of witnesses during pre-trial proceedings.

• Judgment typically issued within 3-6 months.

Court procedures generally take between three and six months, depending on the complexity of the case and the availability of the judge.

Prepare for a court process that could take several months, especially if the case is complex.

• Determined by the Commercial Procedure Code.
• Costs are related to case value and other factors.

The court costs are determined by the Commercial Procedure Code and cannot be negotiated. Costs are relative to the case value, expert/witness involvement, and other extrajudicial costs. If the debtor is unsuccessful in their defense, they must bear the cost for court fees. Other expenses (e.g., experts' fees) can be requested from the debtor; however, the decision whether those are awarded from the debtor depends on the court.

Factor in all potential costs before initiating legal proceedings.

• Enforced through the Federal Bailiffs' Service or debtor's bank.

Enforcement procedures in Russia are regulated by the Law on Enforcement Procedure and the Commercial Procedure Code. After a judgment comes into force, the claimant or creditor receives a writ of execution from the court that issued the judgment. Based on the writ of execution, the judgment can be enforced through either the:

• Federal Bailiffs' Service
• Debtor's bank

The Federal Bailiffs' Service is a state authority responsible for the enforcement of judgments on all types of claims (both monetary and non-monetary).

Use the Federal Bailiffs' Service or debtor's bank to enforce domestic judgments.

• Requires recognition by Russian courts.
• Based on international treaties or principles of comity and reciprocity.

Russian courts can enforce foreign judgments based on either:

• An international treaty/convention (Article 241, Commercial Procedure Code).
• The principles of international comity and reciprocity (Ruling of the Supreme Court of the Russian Federation No. 5-ГО2-64 dated 7 June 2002; European Court of Human Rights, Petr Korolev v Russia (Application no. 38112/04)).

The process can be complex and may require additional legal support.

Prepare for a potentially complex process to enforce foreign judgments in Russia.

There are three main stages in insolvency proceedings: surveillance, rehabilitation (or bankruptcy), and receivership.

Understand the stages of insolvency proceedings, their purposes, and timelines to better navigate the process and protect your interests as a creditor.

The financial status of a debtor is verified to determine business viability. This period typically lasts around six months.

An administrator reviews the financial situation and proposes means for the business to continue operating. This process can last up to two years.

If rehabilitation fails, a court-appointed administrator sells debtor assets to recover debts. Funds are distributed to creditors as dividends based on claim priority.

After successful debt recovery or if recovery is impossible, the debtor company is removed from the trade register.

• 1st line: Health and life damages
• 2nd line: Employee salary claims
• 3rd line: Other creditors
• 4th line: Void deal creditors
• 5th line: Other claims

Dividends are paid to creditors in the following order:

1. Payments for damage to health and life
2. Salary claims of the debtor's employees
3. Other creditors
4. Payments to the creditors whose deals with the debtor are considered void
5. Other claims

Understand the order of priority to anticipate the likelihood of your claim being paid.

• 30-day deadline from insolvency announcement
• Late claims may be considered in rehabilitation
• Late accepted claims get last priority

All creditor claims must be filed at most 30 days from the insolvency announcement, otherwise the court would decide whether to accept the claim only in a rehabilitation process. If accepted, the claim will be considered as a last priority for dividend payout.

File claims promptly to ensure they are considered in the insolvency proceedings and maintain priority.

Secured creditors have collateral backing their claims and are paid first. Unsecured creditors are paid from the remaining assets.

Secured creditors are given priority over unsecured creditors due to the collateral backing their claims. Participation in a creditors' committee can strengthen your position during insolvency proceedings.

In complex insolvency cases, creditors may form committees to represent their interests, negotiate with the debtor, and oversee the restructuring or liquidation process.

Debtors must provide accurate and complete financial information to the insolvency practitioner and creditors.

Ensure transparency by fully disclosing financial information during insolvency proceedings. Full cooperation with the insolvency practitioner is essential for a smooth process. Comply with court orders to avoid further legal complications.

Debtors must cooperate with the appointed insolvency practitioner, providing access to records and assisting in the asset liquidation or restructuring process.

Debtors must comply with all court orders and legal requirements throughout the insolvency process.