July 27 Out of court cases

The Chamber of Commerce and Industry of the Russian Federation hosted a round table on the formation of legislation on family entrepreneurship. The event was attended by Nikita Filippov, Head the Bureau of Lawyers “De jure”, and Marina Nikolaenko, Head of the Family Dispute Resolution Practice. Nikita Filippov made proposals for legislative regulation of the institute of family entrepreneurship in terms of inheritance issues. The relevance of this issue is increasing due to the growing number of entrepreneurs and “family enterprises”. Currently, the concept of “family enterprise” is basically absent in the legislation, which is why the mechanism of inheritance of such an asset does not function properly. Often entrepreneurs, businessmen want their “business” to be continued by children or other relatives. In this regard, the question arises of what legal norms should be followed in order to transfer an asset in such a way that this transfer meets a specific purpose and does not carry the risk of dividing such an asset and ending the existence of a family business. Risks also arise in the case of using the simplest method – drawing up a will, since the heirs may have the right to an obligatory share, the question of the right of joint property of the spouses to the family business is often raised. The ban on partial renunciation of the inheritance also in some cases makes it impossible to maintain family businesses. These restrictions do not contribute to the preservation of the family business as a whole. At the same time, the current norm on inheritance of an enterprise has a controversial construction for application to the concept of “family enterprise”. The instruction contained in the law on the preferential right to inherit an enterprise of individual entrepreneurs and commercial organizations is not a guarantee of leaving a family enterprise “in the family”.  Taking into account the emerging problems, along with the possibility of supplementing the legislation with the concept of “family enterprise”, it is necessary to regulate the rules on inheritance of such an enterprise. Such amendments should correspond as much as possible to the main goal – the transfer and proper functioning of the asset from generation to generation, and have a minimum amount of risks.