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Elimination of minority shareholders in LLC: how to do and how to prevent

LLC is the most common form of legal entities in Russia. This is a kind of intermediate type of participation in entrepreneurial activity between the association of only capital (joint-stock companies) and the association of personal, primarily labor, participation (for example, a production cooperative). It is this feature that determines the rules for exclusion of a person from the membership of LLC, the presence of a number of special rules aimed at protecting his interests.

For example, without the consent of all participants, a company cannot be reorganized (for comparison, in joint-stock companies, in order to make such a decision, 75% of the votes of those participating in the meeting of shareholders must be collected). This protects the interests of all participants, primarily personal participation, taking into account personal opinions, regardless of their share in the authorized capital.

For this reason, getting rid of company members who do not take any part in the activities of the company and do not even claim to make a profit is quite difficult.

As an example of the elimination of minority participants (not particularly involved in business, remaining a kind of “ballast” of society), we consider the following case.

Initial data:

LLC “A”, 4 active participants with a 24% stake in each of the authorized capital. A minority participant with a share of 4% takes part in general meetings, claims to make a profit. There are no significant assets at the Company, but in the foreseeable future it is planned to acquire industrial real estate. The registered capital of 10,000 rubles. The director is one of the majorities. Standard charter (copied provisions of the law on LLC). Objective: to exclude the minority from the membership of the Company, since reliable information has appeared about his intention to transfer his share to a third party that is absolutely undesirable for majority participants (we recall that the charter is standard, and therefore there is the possibility of unhindered donation of the share to a third party, the decision is to change the charter adopted unanimously).

Possible variant:

Step 1

Under the pretext of creating the company “Asset Keeper” in the business (for more details here, the Keeper of Assets is the property basis of the business), on which real estate will be acquired in the future, a new LLC is created by all participants. This decision is quite logical: to secure property from operational activities, and will not meet any resistance from the minority shareholder. The authorized capital of Asset Keeper LLC is 20,000 rubles (one part is 10,000 rubles. They must be paid in cash. Clause 2 of Article 66.2 of the Civil Code of the Russian Federation and clause 1 of Article 14 of the Federal Law “On LLC”, and the second part – 10,000 rubles . entitled to pay property rights. 15 Federal Law “On LLC”). At the same time, payment by the participants of the second part of the shares of the authorized capital in the new company takes place in their own shares in company “A” 1.

Consequently, Asset Keeper LLC, in which the current proportion of shares of 24% -24% -24% -24% -4%, will remain a 100% participant in Company “A”. For the minority shareholders, there are apparently no obvious risks.

Step 2

Asset Keeper LLC must acquire (or receive free of charge from its participants – individuals, for example, through a contribution to property) any property worth more than 30 thousand rubles. Thus, the cost of a share in LLC A will be less than 25% of the value of all assets of Asset Keeper LLC.

Step 3

The charter of Asset Keeper is as standard as that of Company A. This, again, should not arouse any suspicion of the minority participant.

Given that the ownership of Asset Keeper LLC as a member of LLC A is decided by the director of the first company, Asset Keeper LLC represented by the majority director decides to sell a 100% stake to a non-public joint-stock company established in advance. The shareholder (s) of the joint-stock company is initially the title holder (several such persons) from majority shareholders, and after the transaction is completed, the majority shareholders themselves, which are not visible in the register (only the founder of the joint-stock company is reflected in the register, the subsequent transfer of rights to the shares is recorded by the registrar of the joint-stock company).

The share in LLC A is 10 thousand rubles, which is 20% of the book value of the property of Asset Keeper LLC. Such a transaction is not large for the Company. Therefore, approval by the general meeting of participants of this company of a transaction on the alienation (sale) of a share made by the director is not required.

A major transaction is a transaction (several interrelated transactions) that goes beyond the ordinary course of business and at the same time:

the price or book value of which is 25 or more% of the book value of the company’s assets, determined according to its accounting (financial ) reporting at the latest reporting date.

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