Abstract
The purpose of the study is to highlight the most significant legal gaps in the mechanism under study, find doctrinally relevant ways to overcome them casually in law enforcement, and propose options for generally filling the gaps in rulemaking. It is equally important to test the effectiveness of the analogy as a means to combat legal gaps. The methodological framework was formed by general (analysis, synthesis, abstraction, and concretization) and specific (comparative, formal, and technical legal) scientific research methods. The positive role of analogy as a method of combating legal uncertainty and the formation of legislative innovations was confirmed. The conclusion was made about the absence of a formal need for additional legislative authorization for Limited Liability Companies’ members to create a conditional or individualized withdrawal procedure. Backed by the legal analogy, the necessity to extend the freedom-of-contract doctrine in determining the fair value of a withdrawing shareholder’s share was argued. The achievements provided the basis for specific practical proposals to enhance existing Russian legislation and harmonize corporate relationships, which should improve Russia’s business climate.
Highlights
Consummated on 11 August 2020, Law No 252-FL indicated the possibility, at the will of shareholders, to give the right to withdraw from the company to specific shareholders listed in the Articles of Association, or shareholders who have a share of any size in the company’s authorized capital, or shareholders who meet the criteria listed in the Articles of Association
Due to the discretionary nature of the current rule on permission to formalize the right to withdraw from an LLC in the Articles of Association, the new rule
The essential legal and economic consequence of an application to withdraw from an LLC is that according to par. 2 art. 94 of CCRF, and par. 2 art. 14, par. 6.1 art. 23 of the LLC Law, the company is obliged to pay fair value of the withdrawing shareholder’s share, which corresponds to the part of the LLC net assets value in proportion to the share size, and is determined based on the LLC’s financial statements for the past accounting period
Summary
One of the most relevant development and functioning aspects of corporate legislation is the balanced (taking into account the interests of a Limited Liability Company (hereinafter—LLC) as a type of closed corporations, its shareholders, and creditors) enhancement of the mechanism for a shareholder’s withdrawal from the company. Such a fundamental problem for closed corporations is imposed on natural procedural difficulties in determining the form and procedure of withdrawal. It is essential to deal with the issue of legal and economic consequences of a shareholder’s withdrawal from an LLC harmoniously but with an emphasis on the protection of minority shareholders (Bikulov 2017), including complete regulation of the procedure for determining the value of the withdrawing shareholder’s share
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