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Conflict rarely begins with a row. It usually starts with quiet disregard: meetings are not convened on time, the decision-making procedure is changed de facto, requests go unanswered. By the time the dispute is open, both sides have accumulated breaches.
The main mistake is acting on the logic of “we are partners, after all”. While the conflict rests on personal understandings, no evidence is recorded. By the time it is clear that litigation is unavoidable, the key facts are either undocumented or the time limit for challenging them is about to expire.
What to protect first. Three things at once: control over operational decisions, access to the company’s documents and finances, and the stake itself, against dilution through an additional share issue or asset stripping into affiliated structures.
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Where conflict most often begins
Blocked decisions. A partner with an equal or blocking stake systematically skips meetings or votes against every initiative. The company effectively loses the ability to be managed, even though formally nothing has been breached.
Denied access to documents and finances. A director or partner with operational control restricts the other co-owner’s access to the accounts and bank statements, citing “commercial secrecy” or an “overloaded accounts department”.
Asset stripping into affiliated structures. Key contracts, a trademark or real estate are moved to a new legal entity controlled by one of the partners, often before the conflict becomes visible.
Dilution of the stake. An additional share issue or increase in charter capital is carried out without the real participation of the dissenting partner, formally reducing their stake and voting weight.
What to do first
Record the current position. Request documents formally: in writing, with an inventory and proof of delivery, not verbally. A written refusal, or silence in reply, becomes the evidence base for any later claim.
Do not leave the company in haste. Leaving often deprives the former participant of the right to challenge transactions made before exit. It makes life easier for the opponent rather than strengthening your negotiating position.
Assess the grounds for a claim to compel disclosure of documents. A participant has a statutory right to information about the company’s business, and a refusal of access can almost always be challenged in court separately from the main conflict.
Check the USRLE. Sometimes changes (a new director, amended articles, a different list of participants) have already been entered in the register without the other partner’s knowledge. That changes the whole defence strategy and often calls for urgent interim measures.
Tools to protect a stake and the business
A claim to compel production of documents and information. The fastest way to regain sight of the company’s finances without waiting for the outcome of the main dispute.
Challenging asset-stripping transactions. If a transaction was made to the company’s detriment, or in breach of the approval procedure for major transactions and interested-party transactions, it can be challenged and the asset recovered.
A claim to expel a participant. Available where a partner systematically obstructs the company’s business or causes it substantial harm. The mechanism is not automatic: each fact must be proved separately.
Interim measures. Attachment of the stake and a ban on registration actions in the USRLE until the dispute is resolved prevent the opponent from registering changes while the case is pending. Without them, a judgment can be won only to find an empty company.
When the structure has a foreign element
A partner or asset abroad. The toolkit extends beyond the Russian courts. If the shareholders’ agreement contains an arbitration clause, the dispute may go to international arbitration even where the operating company is registered in Russia.
Assets in a foreign jurisdiction. A Russian court judgment is not enforced abroad automatically. For an asset located overseas, a separate recognition and enforcement procedure is generally required where the asset is situated.
A corporate agreement under foreign law. A typical construction for holdings with a foreign element, but one that needs separate analysis of the applicable law before a dispute begins, not after. What works under the Russian Federal Law on Limited Liability Companies does not always work the same way under Cypriot or English law.
Key figures
Experience in corporate conflicts between partners specifically, not in corporate law in general.
Common mistakes by owners
Delaying the formal request for documents. Hoping for negotiation without recording breaches in parallel works against whoever does not document events. In this kind of conflict, time almost always favours whoever already controls the company.
Leaving the company under pressure. A decision made in haste deprives a participant of the right to challenge past transactions as a participant. It is one of the costliest mistakes in corporate conflicts.
Not rereading the articles before a conflict. The articles may contain unfavourable mechanisms built in advance, for example a pre-emption right to buy out a stake at an understated rather than market price.
Acting without recording communications. Correspondence, meeting minutes and formal requests count for more in court than verbal understandings and “we agreed everything verbally”.
Frequently asked questions
Can a partner be forcibly expelled from an LLC?+
Yes, through the courts, if they systematically obstruct the company’s business or cause it substantial harm. The mechanism is not automatic: each fact must be proved.
Should you leave the company if your partner blocks every decision?+
Not always. Leaving removes the right to challenge past actions as a participant. It is often better to keep your status and seek protection through the courts.
Has the conflict with your partner already begun?
Leave a request, and the partner in the corporate practice will contact you within one working day.