Lawyers did not support the regulation of the exclusion of shareholders from the company proposed by the Ministry of Economy

The draft law of the Ministry of Economy, which regulates the procedure for exclusion through the court of a shareholder who harms a non-public company (or significantly impedes its work), did not find support from the Council under the President of the Russian Federation for the Codification of Civil Legislation. Lawyers note that the draft limits the ability of the court to assess the circumstances of a particular corporate conflict, and also does not resolve some fundamental issues of monetary settlement with a shareholder expelled from the company.

The Council under the President of the Russian Federation for the Codification of Civil Legislation prepared an opinion on a large-scale draft law of the Ministry of Economy aimed at improving corporate legislation. This, in particular, is proposed to be done by clarifying the regulation of the activities of the management bodies of joint-stock companies, as well as expanding the types of property that can be used to pay for a share in the authorized capital.

As follows from the conclusion, the lawyers did not support the bill. The block of proposals on the procedure for excluding a shareholder from a non-public company caused the greatest criticism.

Let us clarify that now, if one of the shareholders, by his actions or inaction, has caused significant harm to the company or significantly impedes its activities, other shareholders may, in court, demand his exclusion with payment of the cost of the share.

The Ministry of Economy proposed to detail the regulation of such situations. The conditions under which a shareholder cannot be excluded if a shareholder who himself meets the criteria of “harmfulness” to society are filed with a claim; if the shares of an unscrupulous shareholder are seized; if the company is on the verge of bankruptcy or may become so if it pays the excluded shareholder the market value of his share. This list of grounds for refusal by the court to exclude a shareholder caused criticism of the council. Lawyers considered that such provisions “predetermine the outcome of the litigation, without even giving the court the opportunity to assess in the aggregate all the circumstances of a particular dispute arising from a corporate conflict.” In addition, it is not clear why the arrest of shares prevents consideration of the merits of the issue of exclusion of the shareholder, the conclusion says.

The Board’s remarks also concern the procedure for paying the value of his share to the excluded shareholder. As follows from the conclusion, the project of the Ministry of Economy does not resolve the issue of whether the restrictions that are currently in effect when buying shares are applied in such cases: the amount of funds allocated by the company for buyback cannot exceed 10% of the value of net assets. The absence of exceptions excluding the application of such restrictions may lead to their use in the interests of unscrupulous shareholders.

For example, as it is said, to the “absurd position”, when the decision to expel a shareholder is made, but the company will not be able to fulfill it, although the shareholder really significantly complicates its activities.

In addition, the council draws attention to the fact that the situation has not been resolved when the company did not pay off the excluded shareholder on time: after the court decision on “withdrawal” from the company, the right to dispose of its shares is limited until the rights to them are transferred to the joint-stock company. And if, the conclusion says, the company fails to fulfill its obligation to pay the market value of these securities on time (30 days are allotted for this), then the ex-shareholder will not be able to dispose of them, for example, sell them to other persons. “Such a state of affairs is unacceptable,” the council said.

The Ministry of Economy explained to Kommersant that the comprehensive bill is aimed at bringing the provisions of the legislation on business entities in line with the Civil Code and has been prepared taking into account established practice – the document has been worked out and agreed with the Ministry of Finance, the Federal Tax Service, the Ministry of Justice and the Central Bank. The conclusion of the council, they add in the department, has been received by the ministry and is being analyzed “with a view to taking into account the comments and subsequent refinement of the project.”

Evgenia Kryuchkova