Exclusion of a person from the membership of an LLC: analysis of legal grounds

Exclusion of a person from the membership of an LLC: analysis of legal grounds. Arbitrage practice.

According to Art. 67 of the Civil Code of the Russian Federation, a participant in a company has the right to demand the exclusion of another participant in a judicial proceeding with the payment of the actual value of his share of participation to him, if such a participant by his actions (inaction) caused significant harm to the company or otherwise significantly impedes its activities and the achievement of the goals for which it was created.

In the framework of the present case, the court examined the legitimacy of such a requirement from one of the LLC participants and analyzed the grounds underlying the claim for the exclusion of another person from the LLC participants.

Case plot:

Kukhta A.A. appealed to the court to Savchenko Oh.E. about her exclusion from the list of participants of Nadezhdinskoye PH LLC, since by her actions she makes the company's activities difficult and impossible in the future: systematically, without a good reason, she does not appear at the general meeting of LLC participants, votes "against" on the most important issues.

According to the applicant, the defendant does not want to develop the company and has no interest in making a profit from its development: it was at the initiative of the defendant that the issue of selling all the lands of the LLC was put on the agenda, i.e. of its assets for a nominal value, by its actions to change directors and address, brought the LLC to the adoption by the tax authority of measures to liquidate the LLC.

Judicial act: Resolution of the Arbitration Court of the Far Eastern District of February 18, 2022 in case No. Ф03-7365/2021

Court's findings:

1. The court must assess the degree of violation by the participant of his obligations, the degree of his guilt, and also establish the fact of such a violation.

2. The exclusion of a participant is a special corporate way of protecting rights, the purpose of which is to eliminate the obstacles to the normal activities of the company caused by the behavior of one of the participants.

3. The reference to the unwillingness of the participant to develop the LLC and the lack of interest in making a profit from its development is subjective and, in the absence of relevant evidence, cannot be accepted by the court.

4. A member of an LLC cannot be charged with failure to take actions (in particular, to convene a meeting) that are not its responsibility (the Law does not oblige a member of a company to convene a meeting at the request of another member).

5. The systematic non-attendance of an LLC participant at general meetings can be recognized as evasion from participation in them only if it is proved that the procedure for holding a general meeting has been followed, including proper notification of the participant about the date, time and place of the meeting.

6. The argument that, at the initiative of the defendant, the issue of selling his assets for a nominal value was put on the agenda does not indicate any violation of the obligation of a member of the company, since, by virtue of the Law "On LLC", this is the right of a member of the company.

Comment:

It is the court that determines the significance of the violation, the degree of guilt of the participant and the degree of harm caused to society by his actions. In the framework of the present case, the court did not establish the existence of criteria for the materiality of harm and the impossibility of carrying out further activities, the applicant's claims were left without satisfaction.

Judicial practice among the cases that may lead to the exclusion of a participant from an LLC, highlights the following:

a) Systematic evasion without good reason from participation in the general meeting of participants in the company. A prerequisite: depriving the company of making significant business decisions on the agenda of the general meeting, as well as causing significant harm and the impossibility of carrying out further activities.

b) Commitment by a participant of actions that are contrary to the interests of the company: for example, causing significant damage to the property of the company, negotiating a transaction in bad faith to the detriment of the interests of the company, economically unjustified dismissal of all employees, carrying out competitive activities, voting for the approval of a knowingly unprofitable transaction. 2 conditions are also obligatory: causing significant harm to society and the impossibility of carrying out further activities.

Please note that in 2020 the law firm Vetrov & Partners was marked by the industry rating of law firms Pravo.ru-300 in the nominations Arbitration Proceedings, Dispute Resolution in Courts of General Jurisdiction and is one of the regional companies throughout Russia in these nominations.

In the event that your litigation or other dispute, contractual work or any other form of activity concerns the issues discussed in this or our other material, we recommend that you check and make sure that your legal position complies with the latest changes in practice and legislation.

We will be happy to provide you with legal assistance regarding the minimization of legal risks and available opportunities. We will try to find a solution that is right for you.

Call +7 (383) 310-38-76 or write to info@vitvet.com.

Our law firm provides various legal services in different cities of Russia (including Novosibirsk, Tomsk, Omsk, Barnaul, Krasnoyarsk, Kemerovo, Novokuznetsk, Irkutsk, Chita, Vladivostok, Moscow, St. Petersburg, Yekaterinburg, Nizhny Novgorod, Kazan, Samara, Chelyabinsk, Rostov-on-Don, Ufa, Volgograd, Perm, Voronezh, Saratov, Krasnodar, Tolyatti, Sochi).

David Glikshtein, manager. I write articles, look for interesting information and suggest ways to use it in practice. I believe that thanks to high-quality legal analytics, clients come to a law firm, and not vice versa. Do you agree? Then let's be friends on Facebook.