| Article | On Property Liability of Legal Entities for Obligations of the State |
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| Authors |
INNA SPASYBO-FATYEYEVA
Doctor in law, Professor, Corresponding member of the Legal science Academy, Honored member of science and technology, Professor of civil law Department № 1 National law University named after Yaroslav Mydriy (Kharkiv, Ukrainе) ORCID ID: http://orcid.org/ 0000-0002-3447-1252 isfateeva@gmail.com
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| Name of magazine | Legal journal «Law of Ukraine» (Ukrainian version) |
| Issue | 1 / 2019 |
| Pages | 204 - 216 |
| Annotation | Issues pertaining to liability of legal entities at the expense of their assets and recovery of debts of their founders against assets of legal entities are in the focus of attention of researchers and experts, since along with having a direct reference to the property status of a legal entity, its members and creditors, they also affect civil commerce as a whole. One of the most important aspects of this scope of issues is liability of legal entities in which the State owns an interest in the authorized capital, or shares, or even some assets. In particular, this is a question whether it is admissible to seek recovery for obligations of a legal entity’s owner at the expense of assets of the legal entity if its assets are in the State’s or municipal ownership, that is, where the owner is the State or a territorial community. This question becomes particularly pressing if the owner of assets of a legal entity or an interest in its authorized capital or shares (particularly, if they constitute 100 % of the authorized capital) is a foreign State. These issues arose with respect to liability of Ukrainian legal entities to foreign investors at the expense of the former’s assets, as well as liability of a foreign State at the expense of its assets for obligations of legal entities registered in Ukraine. At the same time, one of the stumbling points is independent liability at the expense of assets as one of the features of legal liability. The purpose of the article is to clarify whether it is possible or inadmissible to seek recovery at the expense of assets of the members (founders, shareholders) of a legal entity, given its rights to its assets and the rights of its members (founders, shareholders) to such assets, the grounds for civil liability and also given the inconsistency of legislative regulation of this issue in Ukraine. This is important in theoretical as well as in practical terms. As a result of the study, the author revealed obvious shortcomings in the legislative regulation of property rights of the State as the founder of a legal entity and the rights of a legal entity to its assets, especially if such rights are that of economic management and operational control, as well as the rights to assets of business companies with 100% of their authorized capital or shares owned by the State (state-owned or national companies or corporations). Accordingly, this predetermines the answer to the above question whether it is possible to make legal entities liable for obligations of their founders, and vice versa. The following conclusions are made: a) there is a need to amend the legislation of Ukraine not only with regard to the rights to assets of state-owned and municipal enterprises and institutions, but to their organizational and legal form in general; b) consistency of compliance with the principle of non-liability of legal entity members for debts of respective legal entities, and vice versa – non-liability of legal entities for debts of their members, except where these persons are made liable by a court decision when the unfairness of their actions is established.
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| Keywords | property liability; member (founder, shareholder) of a legal entity; right to property; ownership right |
| References | List of legal documents |
| Electronic version | Download |