Adopted in the first reading is a draft law according to which it will be possible to register as a participant in an LLC or a shareholder in a JSC another single-person economic society.

According to the second paragraph of Article 66, paragraph 2 of the Civil Code of the Russian Federation, as a general rule, a business entity may not have as its sole participant another business entity consisting of one person. Similar provisions are contained in paragraph three of article 7, paragraph 2, paragraph 2 of the Federal Law “On Limited Liability Companies” and paragraph two of article 10, paragraph 2, of the Federal Law “On Joint-Stock Companies”.

These norms limit the possibilities of entrepreneurs for organizational structuring of their business. At the same time, in certain cases such structuring is a convenient way of separating types of activities, clear distribution of management responsibilities, clearer and more expedient business organization, etc.

This draft law, in order to protect the rights of third parties from abuses by founders, contains an indication that a company may have as its sole founder (participant) another business company consisting of one person, provided that the functions of the sole executive body in the company are not performed by a person performing such functions in its sole founder (participant) or its sole founder (participant).

Link: https://sozd.duma.gov.ru/bill/797057-8

Bill No. 797057-8