Interest-free loans between “their”: to stand – to be afraid?

At first glance – not scary
Based on the provisions of paragraph 1 of Art. 50 and paragraph 1 of article 809 of the Civil Code of the Russian Federation in the general case, commercial organizations provide loans to other commercial organizations on a reimbursable basis. Moreover, according to paragraph 1 of Art. 421 of the Civil Code of the Russian Federation, citizens and legal entities are free to enter into an agreement. On this basis, the parties to the loan agreement are not limited in the right to establish in such an agreement any interest rate for the use of borrowed funds received in connection with the borrower’s business activities. Certain restrictions on the amount of interest under such an agreement can be caused only by compliance with other principles of civil law – reasonableness and fairness, the inadmissibility of abuse of law (clause 2 of article 6, article 10 of the Civil Code, paragraphs 9, 10 of the resolution of the Plenum of the Supreme Arbitration Court RF dated March 14, 2014 No. 16 “On the freedom of contract and its limits”). Continue reading →