The exclusion of a participant from LLC: recommendations

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2018-03-23 09:44:16

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Creating their own businesses – is something to aspire to very many people, however, not always they understand what it is subscribe. Many individual entrepreneurs are unable to adequately assess their capabilities, therefore their business or barely afloat or sinking in the conditions of tough competition. Some people build more ambitious plans and open your own limited liability company in which the share of shares in the company. But there is not always everything goes smoothly, as evidenced by the fact that the exclusion of a participant from LLC – this is a fairly common theme. People ask about how to get rid of the partner who only pulls firm on the bottom.

the exclusion of a participant from LLC

How to exclude a Board member?

Many believe that to do so is extremely difficult or even impossible, but it isn't. All you need – this is a strong case, as well as knowledge of article ten of the Federal law “On limited liability companies”, that is, on LLC. It just a question about an exception of party of the company, stating the grounds on which it can be produced you need to do and so on. To learn more about this issue, you should read this article which details will be painted all of the recommendations regarding what you need to do to exclude one of the members of your limited liability company.

an exception of structure of participants of LLC

Prerequisites

Before considering directly the exclusion of the member from the LLC, you need to look at some background. The fact that the majority of people, gathering together their forces to organise a company, almost never think about the fact that in the future something can go wrong. Often it is best friends or reliable business partners. What could possibly happen? However, you will quickly realize that doing business together can greatly change people. And if your company also will be successful, there can always be that person who wants to attribute the maximum share of success (and with it income) it yourself. This leads to conflicts within enterprises that is not always possible to settle things peacefully and amicably. The result is a need to exclude some members, but how exactly can it be done? The exclusion of a participant from the LLC largely depends on what form of activities you have chosen.

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 the exclusion of a participant from LLC companies

Activities

The question in this case is about, OOO, i.e. the limited liability company. But there is AO, that is, Joint-stock company, and to mention him is to draw Parallels with. So, if you open the AO, there is the majority shareholder and the minority holders, which are significantly (or slightly) smaller percentage of shares. And if a majority holder in any way violates the Charter, not going to meetings, does not participate in the activities of the enterprise, that the minority holders can't do. Similarly, they can't do anything with each other without the consent of the majority holder. Output in this case, you don't need to start his first business immediately with AO.

claim the exception participant

Differences from OOO AO

What is the difference? The fact that such a society is specifically the issue of exclusion of participants has one big advantage. If the participant has ten or more percent of the shares, it can directly influence what is happening in the business firm. That is, even a single party holding a 10 percent stake, may seek the exclusion of another participant which holds more than fifty percent of the shares. Naturally, you must have sufficient grounds, as an exception from the participants of OOO – this is not a simple process. That is why you need to read this article. Here you will find all you need: examples, advice, useful information and so on. After reading this material you will much better to understand how and on what conditions the exception to the composition of the company.

petition about exclusion of a participant from LLC

Simplest example

So, first you need to give a simple example how the exclusion of a participant from the LLC. Companies with limited liability, as you already know, you do not have a specific member who takes all the important decisions, so each member can do it. In this example, the expired Director General, and under the terms of the agreement, the new General Director is elected by 2/3 of votes. But this is not happening. Why? Several participants of the LLC, which together owned 60 percent of shares (less than 2/3) are not able to choose a new CEO without the participation of the latter party, which has 40 percent of the shares. And he, in turn, blackmails them, appearing at meetings of the company. In this case, prepared a lawsuit that is headingto the court. In most cases, the “bully” quite quickly appears at the meeting and does his part, however, this does not always happen. And then you need to be ready a hundred percent, because the jurisprudence does not speak in favor of the plaintiffs. In most cases, the lawsuit refuses, but it happens just due to the fact that the plaintiffs are, so to speak, with drawn swords, unprepared and not having studied in detail the necessary materials. That you do not repeat their journey, this article will help you carefully study the exclusion of a participant from the LLC. The limited liability company – is an interesting topic which will help you better understand today's business world.

sample decision on the exclusion of a participant from composition OOO

What you need to know when filing a claim?

It's time to learn what you need to prepare when you are going to sue. The exception participant – this is a very serious step, so do not think that the court would decide in favor of the plaintiffs right and left. To achieve the exclusion of one of the participants, you will need a large amount of evidence, and they must be very strong. If you are going to file a lawsuit, you should know a few things. First, it is your share in the enterprise. As mentioned above, the plaintiff must have at least ten percent of the shares in the company, to be able to apply to the exclusion of other members of the organization.

an exception from among participants of OOO

What makes the operation of the company impossible?

Second, you need to remember that, in accordance with the law, to petition the exception of one of the participants is possible only in the case that it makes it impossible for the company or it substantially obstructs its action or inaction. For example, as described in the example above, such actions may include the absence of a party at the mandatory meetings of the members of society, which makes impossible the adoption of certain decisions that require vote of all members.

Causes of guilt

Third, the court will always consider the degree of culpability of the defendant, the reasons for which the enterprise cannot function. This means that you will have to collect an impressive amount of evidence which directly would be linked that your enterprise began to function much worse or even stopped their activities, with a negative action or omission of the party to whom the claim is filed. The exception participant – it's a difficult decision, so before you file a lawsuit, here are a few examples of how events can develop.

Attention to details

Before you make a claim on expulsion of a member from the LLC, you need to determine the degree of guilt. Many people rush to court without trying to understand what their real chances. In the example described above, the meetings were not attended by the member holding a 40% stake. Of course, it is impossible to hold a vote on the appointment of a new Director General, as 40 percent – more than one third, which you can ignore, if two-thirds vote unanimously. But if its share was 30 percent? Participants go to court and report that one of the Board members interferes with the activities of the company, as not appearing at General meetings. However, 70 per cent – is more than 2/3, so no point in even wasting time on visits to the courtroom. Naturally, the situation is quite different if the decision, which strictly prescribed the participation of all members – in this case, you have a reason to sue, but do not forget that the blame can be you. There are plenty of details that you need to comply with in the preparation and conduct of assemblies, otherwise the defendant may be found not guilty, as, for example, incorrectly or not timely notified him of the meeting. Do not rush to make a claim on expulsion of a member from the LLC, unless you have solid evidence. To better understand the issue, this article gives an example of situations which you may encounter if not prepared properly.

Example

Even if you have a specific pattern of decisions on excluding of a participant from the LLC, you need to consider everything to the smallest detail. In this example, one of the LLC members have sued the other for its exclusion from the composition of the Board of the organization. But the court rejected his claim, although the second party do not appeared at General meetings that actually interfered with the activities of the company. Why? You should know that the notification of the members about General meetings shall be sent in accordance with the law, that is, a registered letter specifying the date and time of the meeting and a rough agenda. In this example, in one case the letter was not registered, and in the other it did not contain the agenda. As you can see, even little things can cause an exception among members of one of your partners will be over for you to defeat.

What is not a reason?

Well, now that you understand that this process is much more complex than you might think initially, you can explore the groundsto exclude the member from the LLC. But first and foremost, of course, is to highlight those moments that, on the contrary, are not grounds, so you don't have to be in unpleasant situation. For example, many LLC members try to exclude others for violation of labor laws. However, the courts in all cases occupy the position of the defendant, even if he in fact had seriously violated the Labor code. Why? The fact that you need to distinguish between labor and corporate activities and, accordingly, labor and corporate law. On the basis of violations of TC is not possible the exclusion of a participant from the LLC. Judicial practice in this case shows that the situation there is two solutions, the court and the defendant always wins. Also in the filing of a lawsuit is not a breach of his duties of member LLC as a sole Executive body. This means that the Executive body responsible for the losses incurred by the company, however this fact does not imply the possibility of its exclusion from the LLC.

What is the reason?

Considering all the above, what is a basis for filing a lawsuit about the exclusion of one of the members. How can you ensure that was a positive decision about exclusion of a participant from LLC? Sample litigation practice with a positive outcome is not the only, cases happen a lot, and based on them it is possible to draw some conclusions regarding what cannot be the real basis for excluding one of the members. First, is the creation of certain obstacles through action or inaction to bring the company's documents in proper form in accordance with the law. Second, this illegal conduct by the participant of the General meeting. Thirdly, it is the seizure of the property of OOO. Finally, the initiating party to the transaction, which actually resulted in serious negative consequences for the company.

Insights

Now that you know all about the exception of one of the LLC members, you need to understand a few things. For example, you shouldn't have to, OOO people, which you are not sure a hundred percent. You need to conduct the meeting according to the rules, observing all the fine details. Of course, you should contact the court only when there is tangible evidence and arguments.


Article in other languages:

AR: https://tostpost.com/ar/business/11412-the-exclusion-of-a-participant-from-llc-recommendations.html

BE: https://tostpost.com/be/b-znes/20441-vyklyuchenne-udzel-n-ka-z-taa-rekamendacy.html

DE: https://tostpost.com/de/business/20446-austritt-ausschluss-eines-gesellschafters-aus-der-gmbh-empfehlungen.html

ES: https://tostpost.com/es/negocio/20460-la-exclusi-n-de-un-participante-de-sa-recomendaciones.html

HI: https://tostpost.com/hi/business/11423-llc.html

JA: https://tostpost.com/ja/business/11423-llc.html

KK: https://tostpost.com/kk/biznes/20432-alyp-tastau-atysushy-zhsh-synymdar.html

PL: https://tostpost.com/pl/biznes/20402-wykluczenie-uczestnika-z-o-o-wskaz-wki.html

PT: https://tostpost.com/pt/neg-cios/20400-a-exce-o-de-um-participante-de-uma-llc-recomenda-es.html

TR: https://tostpost.com/tr/business/20444-stisna-yenin-ltd-neriler.html

UK: https://tostpost.com/uk/b-znes/20423-viklyuchennya-uchasnika-z-tov-rekomendac.html

ZH: https://tostpost.com/zh/business/12205-llc.html






Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

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