Provision on a new method of ensuring assets and property security has been introduced into the Civil Code of the Russian Federation
New organizational and legal form: personal fund
On March 1, 2022, a new organizational and legal form appeared as a tool for asset preservation and property management: a personal fund.
In accordance with the Federal Law No. 287-FZ dated 01.07.2021 and amendments to the Civil Code of the Russian Federation, a personal fund can be founded by any citizen. Unlike hereditary, a personal fund guarantees that the business will continue to operate in the form conceived by the owner after the transfer of management to others.
A founder of a personal fund becomes an owner but cannot be its head. It is impossible to replace the founder or take a co-founder, except for a spouse with whom a common property is shared. The order of personal fund operation is determined by the charter. A founder has the right to create an urgent or indefinite personal fund. When creating a fund, the founder transfers his property to the organization free of charge in the amount of at least 100 million RUB. After that, the founder loses his rights to the transferred property.
In the future, the personal fund uses the property for conducting business activities by creating business companies and participating in them. Individuals and legal entities, except commercial enterprises, may be appointed as beneficiaries. The founder of a personal fund cannot be a beneficiary, unless it is provided for by the charter. Rights of beneficiaries of a personal fund cannot be transferred to creditors, heirs, or other persons. A fund may not have any beneficiaries at all, in which case all the income will go to its own development.
The founder of a personal fund bears subsidiary responsibility for its obligations, and the personal fund - for the obligations of its founder for 3 years from the date of creation, but no longer than 5 years in case of extension of the period by a court decision. The court is the only instance authorized to make decisions on amendments to the constituent documents of a personal fund after the death of its founder in cases where the operation of the organization becomes impossible under the existing conditions. The founder has the right to amend the charter and the terms of management. A decision to create a personal fund, a charter and terms of management must be notarized.