Charters of commercial organizations may contain provisions prohibiting the disposal of shares to third parties without the consent of the other shareholders.

General rule

In case of divorce, common property is as a rule to be divided in equal shares (provided there are no children, prenuptial agreements, and other serious grounds). Article 34 of the Family Code of the Russian Federation defines the common property of spouses as follows: “The common property of spouses is also movable and immovable things acquired with the spouses’ common income, securities, shares, deposits, shares in capital contributed to credit institutions or other commercial organizations, and any other property acquired by the spouses during the marriage regardless of in whose name it was acquired or by whom it was paid.”

Charters of commercial organizations may also prohibit the disposal of shares to third parties without the consent of the other shareholders. When a share in an organization with such charter is divided, a contradictory situation may arise whereby a share in the company’s capital is transferred to one of the spouses under the court decision for property division, but if the other shareholders do not approve the spouse who received such share, the former spouse will not be able to join the company even with the court order granting the share to the former spouse. So, the former spouse will acquire the share under the court decision but without corporate rights as the company charter provides for certain conditions that protect the interests and rights of the other company shareholders.

A similar situation arose in 2020. Ruling N 305-ЭС20-22249 of the Supreme Court Judicial Collegium for Economic Disputes dated April 06, 2021 Case N А40-324092/2019

Supreme Court standpoint

Property was divided in court between former spouses. As a result, the ex-wife of a shareholder with a 50% stake in a company received after the divorce half this stake, i.e. 25% in the company’s share capital. The ex-husband went to court arguing that the share had been acquired in violation of the procedure prescribed in the company charter, i.e. the ex-wife did not obtain the consent of the company shareholders to join the company.

The courts of three instances rejected the claim, pointing out that the rights of the company shareholders had not been violated as the share had been transferred to the ex-wife under a court decision when the company charter restricts only the disposal of share under a transaction. There is no procedure for transferring a share in case of division of the spouses’ common property, and in such case, the consent of the other shareholders is not required.

The Supreme Court did not agree, stating that the company shareholder’s ex-wife that acquiring the right to a share in the company’s share capital after the divorce had to comply with the corporate procedure prescribed in the company charter since it is assumed that when her ex-husband made a contribution to the company’s share capital and became a shareholder of the company, she agreed to such disposal of their common property thereby giving her consent to the company charter and its provisions requiring to obtain the consent of shareholders for her to become a company shareholder.

The Supreme Court clarified that when a spouse receives the right to a share in a company’s share capital after a divorce, such acquisition does not result in the receipt of corporate rights. If the company charter prohibits the disposal of share to a third party without the consent of the other shareholders, then the former spouse will be entitled to apply to the company with a request for becoming one of its shareholders. And if the application is rejected, the former spouse will be entitled to receive the value of the share.

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