Mandatory insurance of a majority shareholder in a limited liability company – Supreme Court resolution

The Court confirmed that a shareholder who holds 99% of shares in a two-member limited liability company is not liable to social insurance on the same terms as the sole shareholder in a single-member limited liability company. A limited liability company cannot be treated as a single-member company if there is another shareholder, even if his share is only marginal. 

The resolution is important because the Social Insurance Institution and courts have so far often issued unfavourable rulings to majority shareholders in a limited liability company, referring to a concept of a "fake shareholder" or an "almost-sole shareholder". Thus, they have stated that the majority shareholder in a limited liability company is subject to social insurance as a sole proprietor on the same terms as a shareholder in a single-member limited liability company.

 

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