Can the LLC members exclude the other parties through the court?


The possibility of excluding another participant from the legal entity via the court is one of the corporate ways of remedies because there is the aim to remove obstacles in carrying out the company's activities caused by abusive acts of the excluded participant.
However, the right to exclude a participant from a legal entity can be exercised only by those participants whose shares are not less than ten percent together in the charter capital.

In regard to the legislative changes under the Federal law of December 5, 2017 № 383-FZ "On amendments to the article 19 of the Federal law "on the introduction of part one of the Civil code of the Russian Federation", it is worthwhile noting that changes refer only to legal entities which are registered within the Republic of Crimea or within the city of Federal status of Sevastopol.
This change is in connection with presence of a transitional period in the legislation of the Crimea, caused by the integration of the Republic of Crimea into the legal system of Russia.

Due to the existence of the transition period, many companies in Crimea are faced with a completely new legal regulation caused by material inconsistency between the Russian and Ukrainian legislation.

Innovations will allow limited liability companies (registered within the Republic of Crimea) to get rid of irresponsible participants via the court who are legal entities that did not  provide their constituent documents under the Russian legislation within the time limits set, legal entities that have not brought their constituent documents in accordance with Russian legislation within the prescribed period, i.e. amid their unconscientious omission that may lead to the impossibility of normal commercial activity of limited liability companies, which they belong to.

The crutial component of these changes is opportunity of any participant of the legal entity of the Republic of Crimea to file a lawsuit in court. Legislative restrictions for participants applying to the court  shall not apply to limited liability companies of the Republic of Crimea.

Review prepared by Svetlana Sitdikovoy, the lawyer of Tenzor Consulting Group.

11 January 2018