Exclusion of a member from LLC: recommendations

Creation of one's own enterprise is something that so many people are striving for, but they do not always understand what they are subscribing to. Many individual entrepreneurs can not adequately assess their capabilities, so their business is either barely kept afloat, or quickly goes to the bottom in a highly competitive environment. Some people build more serious plans and open their own Limited Liability Company, in which they distribute shares in the enterprise. But even here everything does not always go smoothly, as evidenced by the fact that excluding a participant from an LLC is a fairly common topic. People ask about how to get rid of a partner who just pulls the firm to the bottom.

How to exclude a member of the board of LLC?

Many believe that it is incredibly difficult or even impossible to do, but this is not so. All you need are serious grounds, as well as knowledge of Article 10 of the Federal Law "On Limited Liability Companies," that is, LLC. It is just talking about the exclusion of a participant from the LLC, on what grounds it can be produced, what you need to do for this, and so on. In order to study this issue in more detail, you should familiarize yourself with this article, which will detail all recommendations regarding what exactly you need to do to exclude one of the participants of your limited liability company.

Prerequisites

Before considering directly excluding a participant from an LLC, you need to look at some of the prerequisites. The fact is that most people who are putting together their forces to organize a company, almost never think about what in the future something can go wrong. Often these are best friends or reliable business partners. What in general can happen? However, you quickly enough understand that joint business management can greatly change people. And if your enterprise is also successful, then there can always be a person who wants to ascribe a maximum share of success (and with it income) to himself. This leads to conflicts within the enterprise, which far from always can not be settled peacefully and in a friendly manner. As a result, there is a need to exclude some members, but how can this be done? The exclusion of a participant from an LLC largely depends on what form of activity you have chosen.

Form of activity

Speech in this case is about LLC, that is, about the Limited Liability Company. But there is also an AO, that is, a joint-stock company, and it is worth mentioning to draw parallels with LLC. So, if you open an AO, then there is a majority shareholder and minority shareholders who have a significantly (or slightly) smaller percentage of the shareholding. And if the majority holder in any way violates the charter, does not attend meetings, does not participate in the activities of the enterprise, then minority shareholders can not do anything about it. Similarly, they can not do anything with each other without the consent of the majority holder. There is no exit in this case, so you do not have to start your first business right away with AS.

Differences between LLC and JSC

What is different about LLC? The fact is that such a society specifically in the matter of excluding participants has one big advantage. If a participant has ten or more percent of shares, he can directly influence the business in the firm. That is, even one single participant holding 10 percent of the shares can apply for exclusion from the LLC of another participant who holds more than fifty percent of the shares. Naturally, at the same time you should have sufficient grounds, since the exclusion from the members of the LLC is far from the simplest process. That's why you need to read this article. Here you will find everything you need: examples, recommendations, useful information and so on. After reading this material, you will be much better guided in how and under what conditions there is an exception to the membership of the LLC.

The Simplest Example

So, to begin with, you need to give a simple example of how the participant is excluded from the LLC. Limited liability companies, as you already know, do not have a specific member who takes all the most important decisions, so each member can do it. In this example, LLC has expired CEO, and under the terms of the contract, the new CEO is selected 2/3 of the vote. But this does not happen. Why? Several LLC members who in total own 60 percent of the shares (less than 2/3) can not elect a new CEO without the participation of the last participant, who owns 40 percent of the shares. And he, in turn, blackmails them, not appearing at company meetings. In this case, a lawsuit is prepared, which is sent directly to the court. In most cases, the "blackmailer" appears fairly quickly at the meeting and performs his role, but this does not always happen. And then you need to be prepared for one hundred percent, because the judicial practice does not speak in favor of the plaintiffs. In most cases, the lawsuit refuses, but this is due to the fact that the plaintiffs go, so to speak, with their sabers unshaved, without having prepared themselves and without studying the necessary materials in detail. So that you do not repeat their path, this article will help you to carefully study the exclusion of a participant from LLC. Limited Liability Companies - this is an interesting topic that will help you better understand the world of modern business.

What do you need to know when filing a lawsuit?

It's time to find out exactly what you need to cook when you are about to file a lawsuit. Exclusion of the LLC participant is a very serious step, so do not think that the court will make decisions in favor of the plaintiffs to the right and to the left. To achieve the exclusion of one of the participants, you will need a large amount of evidence, and they must be very weighty. If you are going to file a lawsuit, then you should know a few points. First, it is your share in the enterprise. As already mentioned above, the plaintiff must have at least ten percent of shares in the enterprise in order to be able to apply for exclusion of other members of the organization.

What makes the company's activities impossible?

Secondly, you need to remember that, in accordance with the law, one can be asked to exclude one of the participants only if it makes the activity of the company impossible or substantially hampered by its action or inaction. For example, as described in the example above, such actions may include the absence of a participant in compulsory meetings of members of society, which makes it impossible to adopt certain decisions that require the votes of all participants.

Causes of guilt

Thirdly, the court will always consider the degree of the defendant's guilt, the reasons why the company can not function. And this means that you will have to collect an impressive amount of evidence that directly relates to the fact that your business has become much worse or even ceased to operate, with negative actions or inaction of the party to whom the claim is filed. Exclusion of the LLC member is a difficult decision, therefore, before filing a lawsuit, review several examples of how events can develop.

Attention to detail

Before making a statement of claim for the expulsion of a participant from LLC, you need to independently determine the degree of his guilt. Many people hurry to the court, not trying to understand what their real chances are. In the example described above, a member holding 40 percent of the shares did not participate in the meetings. Naturally, without it it is impossible to vote on the appointment of a new CEO, as 40 percent is more than one-third, which can be ignored if two-thirds vote unanimously. But if his share was 30 percent? Participants appeal to the court and report that one of the members of the board interferes with the company's activities, since it does not appear at general meetings. However, 70 percent is more than 2/3, so it makes no sense even to waste time visiting the courtroom. Naturally, the situation is completely different, if a decision is made, according to which all members are rigidly registered - then you have a sense to sue, but do not forget that you may be guilty. There are a lot of details that you need to follow when preparing and holding meetings, otherwise the defendant can be found not guilty, because you, for example, incorrectly or in time notified him about holding a meeting. Do not rush to draw up a statement of claim to exclude a participant from LLC, if you do not have any iron evidence. To better understand the issue, the article will give an example of situations that you may encounter if you do not prepare properly.

Example

Even if you have a specific sample of the decision to exclude a participant from the LLC, you need to think through everything to the smallest detail. In this example, one of the members of the LLC sued the other to exclude him from the board of the organization. However, the court denied him a lawsuit, although the second participant did not appear at the general meetings, which actually hampered the firm's activities. Why? You should know that notification of members about general meetings must be sent in accordance with the law, that is, by registered letter with the date and time of the meeting, and also with an approximate agenda. In this example, in one case, the letter was not custom-made, and in the other it did not contain an agenda. As you can see, even such trifles can lead to the fact that the exclusion of one of your partners from among the participants of the LLC will end for you defeat.

What is not the basis?

Well, now that you understand that this process is much more complicated than you might think initially, you can study the grounds for excluding a participant from LLC. But in the first place, naturally, it is worth highlighting those moments, which, on the contrary, are not the basis, so you do not have to be in an unpleasant situation. For example, many LLC members try to exclude others for violation of labor laws. However, the courts in all cases take the position of the defendant, even if he in fact seriously violated the Labor Code. Why? The fact is that you need to distinguish between labor and corporate activities and, accordingly, labor and corporate legislation. Based on violations of the TC, the participant is not excluded from the LLC. Judicial practice in this case shows that the situation does not have two solutions, and the court always wins the defendant. Also, the basis for filing a claim with a court is not a violation of its duties by a member of the LLC as a sole executive body. This means that the executive body is responsible for the losses incurred by the company, but this fact does not imply the possibility of its exclusion from the LLC.

What is the basis?

Given all of the above, what is the full basis for filing a suit to exclude one of the members of the LLC. How can you ensure that a positive decision is made to exclude a participant from the LLC? A sample practice with a positive outcome is not the only one, there are many cases, and on the basis of them it is possible to draw some conclusions as to what can be a valid basis for excluding one of the LLC participants. Firstly, it is the creation of certain obstacles by acting or not acting to bring the company's documents into the proper form in accordance with the law. Secondly, this is an illegal holding by a participant of the general meeting. Thirdly, this is a power takeover of the LLC's property. Finally, this is the initiation of a transaction by the participant, which actually entailed serious negative consequences for the LLC.

conclusions

Now that you know everything about the expulsion of one of the LLC members, you must understand a few things. For example, you should not invite people to a company in which you are not 100% sure. You need to hold meetings of participants according to all rules, observing all the smallest details. Naturally, you should apply to the court only if there is sufficient evidence and arguments.