Is non-payment of a share in the authorized capital grounds for exclusion?

Non-payment of a share in the authorized capital. Arbitrage practice.

Article 16 of the Law "On LLC" establishes the obligation for the participant to pay for his share in the authorized capital of the company within the period determined by the agreement (decision) on the establishment of the company and cannot exceed one year from the date of state registration of the company. Is the non-payment of a share in the authorized capital of the company a basis for expelling a participant from its membership?

Case plot:

Kyarova D.K. (participant with a share in the authorized capital - 50%) filed a lawsuit against LLC "Mercury" with a request to invalidate the decision to exclude the plaintiff from the list of participants in the LLC.

According to the applicant, regardless of the fact of payment of a share in the authorized capital, the current legislation and the charter of the LLC do not give the participant of the company the authority to exclude another participant. The exclusion of a participant from the society is possible only in a judicial proceeding.

The court of first instance satisfied the requirements. However, the appeal suspended the proceedings until the entry into force of another judicial act considering the presence or absence of Kyarova D.K. the status of a member of the society.

In this regard, the applicant in the cassation appeal notes that there was no need to suspend the proceedings, since the court did not substantiate the legal connection of the dispute under consideration with another case, did not reveal the prejudice of the judicial act. The contested ruling only led to a delay in the process and a violation of the time limits for the consideration of the appeal.

Judicial act: Resolution of the Arbitration Court of the North Caucasus District dated February 15, 2022 in case No. A25-2120/2020

Court's findings:

1. The arbitration court is obliged to suspend the proceedings in the case if it is impossible to consider this case until the resolution of another case being considered by the Constitutional Court of the Russian Federation, the constitutional court of a constituent entity of the Russian Federation, a court of general jurisdiction, an arbitration court.

2. The consideration of one case before the resolution of another should be recognized as impossible if the circumstances investigated in another case, or the result of its consideration are essential for this case, that is, they can affect the result of its consideration on the merits.

3. This impossibility means that, if the proceedings on the case are not suspended, the resolution of another case may lead to the illegality of the court decision, incorrect conclusions of the court or the issuance of conflicting judicial acts.

4. Meanwhile, in the framework of another case, the company asks to recognize Kyarova D.K. as having lost the status of a participant in the company. due to non-payment by the participant of the company of a share in the authorized capital.

5. Since the contested decision of the company affects the rights and legitimate interests of Kyarova D.K., the plaintiff has the right to appeal against the said decision, regardless of the circumstances established in another case regarding the presence / absence of her status as a member of the company.

Comment:

1. The court found that since the plaintiff was a participant in an LLC, therefore, he can appeal against the decisions of the company, regardless of the existence of a dispute in another case.

2. It is necessary to distinguish the situation under consideration from the situation if the participant disputing the decision was not such at the time of the adoption of the decision of the general meeting: in this case, he cannot be considered a person authorized to present the relevant requirements.

3. Actions that the company can take in connection with the non-payment by the participant of his share in the authorized capital:

a) Making a decision on the distribution of the transferred share between the participants of the company or on its sale to a third party;

b) Recovery of a penalty (fine, penalty fee) for failure to fulfill the obligation to pay shares in the authorized capital of the company;

c) Restriction of the participant's voting rights within the limits of the paid share.

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