A director can sign most things on a Russian company's behalf — but not everything. Major transactions and interested-party transactions need corporate approval first, and for a foreign group the trap is that ordinary intragroup dealings often qualify as both.
A major transaction — property worth 25% or more of the company's assets, outside ordinary business — needs participant approval. An interested-party transaction — where a director or owner has a personal interest — needs disclosure and, if demanded, approval.
A transaction that should have been approved and wasn't can be challenged and invalidated by a participant holding as little as 1%, or a board member — and the missing consent alone is enough, with no need to prove any loss.
The general director of a Russian company can enter into most transactions on its behalf without asking anyone. But Russian law carves out two categories where that authority is not enough on its own, and the transaction needs corporate approval — a decision of the participants, or in some cases the board — before or after it is concluded. Those categories are major transactions and interested-party transactions.
Getting this wrong is not a paperwork technicality. A transaction concluded without the approval it required can be challenged and set aside, which for a foreign group usually surfaces at the worst moment — during due diligence on a sale, in a dispute, or when a bank or notary examines the underlying authority.
A major transaction (крупная сделка) is one — or a series of connected ones — involving the acquisition, disposal or possible disposal of property whose value is 25% or more of the book value of the company's assets, and which falls outside the company's ordinary business activity. The 25% is measured against the assets as shown in the last set of accounts.
The approval required depends on size and the charter. As a general rule, a transaction in the 25–50% band can be approved by the board of directors where the company has one, while a transaction above 50% of assets requires a decision of the general meeting of participants. The company's charter can also extend the approval requirement to other transaction types the owners consider significant.
A leasing-out or transfer of property into someone else's temporary use can also be a major transaction where the property is worth more than 25% of assets, the company used it in its main activity, and it loses the ability to use it — a point that catches companies that assume only outright sales count.
Major transaction: 25% or more of the company's asset value (board can approve 25–50%; over 50% needs the participants). Interested-party deal: 15 days' notice to disinterested participants. Challenge: a participant with just 1%, or a board member.
An interested-party transaction (сделка с заинтересованностью) is one where a director, a participant with real influence, or a controlling person has a personal interest — because they, or a close relative, are a party to it, a beneficiary, an intermediary or a representative. The classic case is a deal between the company and its own owner or an affiliate.
Since a 2017 reform, these transactions do not require mandatory prior approval by default. Instead, the company must notify its disinterested participants (and board, where there is one) at least 15 days before concluding the transaction, and a disinterested participant or director can then demand that it be approved. If approval is demanded, it is given by the participants who have no interest in the deal.
Value is not a safe harbour. Thresholds set by the Bank of Russia mean that even a transaction worth a fraction of a percent of the company's assets can be an interested-party transaction requiring attention if it exceeds those thresholds — so a small related-party payment is not automatically outside the rules.
This is where foreign parents are most exposed, because the very transactions a group does routinely are the ones most likely to need approval — and often to be both major and interested-party at once. Consider what an ordinary foreign-owned subsidiary does with its group:
A loan from the parent to the subsidiary, or the other way round.
A guarantee or pledge given by the subsidiary to support a group facility.
A sale or transfer of assets between group companies.
A management or services agreement with an affiliate.
Each of these is a transaction with a related party, so each is potentially an interested-party transaction. If it is also large enough — a significant intragroup loan or asset transfer can easily exceed 25% of a subsidiary's assets — it is a major transaction too. A parent that simply instructs its subsidiary to sign, without the disclosure and approval steps, can be creating a string of challengeable transactions without realising it.
A parent-subsidiary loan, a guarantee, an asset transfer or an affiliate services agreement is a related-party transaction — potentially interested-party, and if large enough, major too. Instructing the subsidiary to just sign can create a string of challengeable transactions.
There is important relief for the common case of a wholly-owned subsidiary with one participant. The interested-party transaction rules generally do not apply where the company has a single participant who is also its sole executive body — there is no disinterested participant to protect. That removes much of the interested-party exposure for a straightforward 100%-owned subsidiary.
But two things remain. Major-transaction approval is still required and is taken as a written decision of the sole participant, which — like other corporate decisions — may need notarisation unless the charter provides otherwise. And the relief disappears the moment there is more than one participant, or a joint venture, or a separate director structure — exactly the situations where intragroup dealings are most sensitive. So the nuance helps the simplest structures and not the ones where the risk is highest.
A transaction that needed approval and didn't get it is not automatically void, but it is challengeable — and the rules for challenging it are worth understanding. A claim to invalidate a major transaction can be brought by the company, by a participant holding at least 1% of the charter capital, or by a member of the board of directors.
Crucially, the challenger does not have to prove that the transaction caused a loss. Following the Russian Supreme Court's position, the violation of rights lies in the absence of the required consent itself — no unfavourable consequences need to be shown. That makes an unapproved transaction genuinely fragile, because it can be unwound years later without the claimant having to demonstrate harm.
The practical answer is to build the approval step into how the company contracts, rather than papering it afterwards — identifying, before signing, whether a transaction is major or interested-party, and obtaining and documenting the right consent. For a foreign group, that means treating intragroup loans, guarantees and transfers as approval events by default, not as internal formalities.
A challenger doesn't have to prove any loss — under the Supreme Court's position, the absence of required consent is itself the violation. An unapproved transaction stays fragile for years. Building approval in before signing is the fix.
One — or a series of connected ones — involving property worth 25% or more of the book value of the company's assets, outside its ordinary business. Above that line, approval is needed: the board can approve a 25–50% transaction where one exists, while a transaction over 50% of assets needs a decision of the participants. The charter can extend the requirement to other transactions too.
Often, yes — and this is where foreign parents get caught. A loan, guarantee, asset transfer or services agreement between the company and its group is a related-party transaction, so it's potentially an interested-party transaction; if it's also large enough to cross 25% of assets, it's a major transaction as well. Instructing the subsidiary to sign without the disclosure and approval steps can create challengeable transactions.
The interested-party rules generally don't apply where there's a single participant who is also the sole director — there's no disinterested participant to protect. But major-transaction approval is still required, taken as a written sole-participant decision (which may need notarising). And the relief disappears as soon as there's more than one participant or a joint venture — exactly where intragroup dealings are most sensitive.
The transaction isn't automatically void, but it can be challenged and set aside — by the company, a participant holding at least 1%, or a board member. And the challenger doesn't have to prove any loss: under the Supreme Court's position, the missing consent alone is the violation. That makes an unapproved transaction fragile for years, which is why the approval step is worth building in before signing, not reconstructing later.
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