Responsibility of Public Legal Entities for Debts of State and Municipal Institutions at the expense of Budget Funds

Abstract

The paper analyzes the causes and conditions of subsidiary liability of founders for debts of state and municipal institutions paid out of budget funds. The author concludes that it is necessary to take into account the purpose of accepting such obligations by the budget and the instruments that led to their occurrence, as well as the type of state or municipal institution. It is noted that debt collection of budgetary and autonomous institutions out of budgets can occur only in the case of the public nature of contracts from which obligations arise, which, in turn, imposes restrictions on the creditor and affects the balance of rights and legitimate interests of the parties to the contract. Before applying for debt collection of a budgetary or autonomous institution directly out of the budget, it is necessary to prove that there is no possibility of debt collection from the principal debtor. The author also provides a brief analysis of the approaches of the legislator and the courts to collecting debts of unitary enterprises from public legal entities out of budgetary funds. Based on this analysis, it is concluded that approaches to liability for debts of unitary enterprises and state and municipal institutions differ, but in general, there is some similarity, which is most likely caused by the decentralized nature common to their finances.