Challenging major transactions by participants in business companies in Russian law: theory and practice

the article analyzes the issues concerning the contestation of major transactions by participants of business companies with the application of theory and practice of the Russian legislation. In accordance with paragraph 4 of Article 78 of the Law «On Joint-Stock Companies» and paragraph 8 of Article 46 of the Law «On LLC» the transaction beyond the normal business activities of the company as a condition for its contestation on the grounds of large-scale nature assumes that such a transaction does not meet the criterion of transaction typicality (the transaction is not accepted in the activities of this company or other business entities engaged in similar types of activities) or the criterion of economic consequences of the transaction (the transaction leads to the termination of the company's activities, change of its type or a significant change in the economic consequences of the transaction). The article explores the theoretical and legal foundations as well as the practical aspects of disputing major transactions conducted by business entities. It analyzes the grounds for declaring such transactions invalid and examines the procedural mechanism by which shareholders or participants may challenge them in court. Special attention is given to the legal classification of major transactions as contestable, the calculation of limitation periods, the allocation of the burden of proof, and the role of shareholders’ agreements. Current judicial practice is reviewed, and suggestions for improving legislation are proposed. The findings are based on the analysis of regulatory acts, judicial clarifications, and academic literature.

Civil Code of the Russian Federation, transaction, challenging major transactions, abuse of rights, business companies, court practice