Change of LLC founders

1. Forced exclusion of a person from the membership
2. Voluntary exit (participant’s desire to exit the LLC
3. Inheritance of share and transfer to legal successors
4. Transfer of shares to third parties by selling such share
5. Procedure for changing participants

When carrying out its activity in an LLC, there may be a need to change the founder. Regardless of the number of members of the LLC, the decision to change the founder/s is made at the general meeting, and the results of the meeting are recorded in the minutes.

He must fasten the person who will carry out registration actions and include the reason for the change.

Here is a list of cases when the members of the LLC can be changed:

• Forced exclusion of a person from the membership

A participant can be forcibly excluded if he has not paid his share in the authorized capital within a year of state registration.

For example, if the property of the participant is not enough to repay the personal debt, then the creditors apply for repayment to the LLC in the amount of the share of such a participant.

• Voluntary exit (participant’s desire to exit the LLC)

If a member of the LLC has less than 50% of the authorized capital, he has the right to withdraw from the company at any time, while the consent of other members is not required.

If the share is 50% or more, it is possible to leave if other participants give their consent. Such a participant can leave the general meeting of founders on the basis of a notarized application submitted by him.

The application is written 30 days before the day of departure.

• Inheritance of share and transfer to legal successors

This case applies when one of the participants dies. Then the preferential right to his share passes to the successors, and such right is not limited by the charter. But at the general meeting, a decision may be made to refuse legal successors to become members of the company.

Accepting a successor is a right, not an obligation of the LLC. In this case, the legal successors have the right to receive a share in the deceased participant’s property in kind or in cash.

• Transfer of a share to third parties through the sale of such a share

The articles of association cannot prohibit the transfer of one’s share to third parties.

Other members of the company have a preferential right to purchase the share that is being sold, in an amount proportional to the capital investment. Such a right is valid for 30 days from the date of receipt of the notification of the intention of one of the participants to sell his share.

Other participants must declare in writing that they wish to use the preferential right.

If a new participant needs to be brought in to attract new investment, one or more existing participants sell their stake.

Accordingly, a sales contract is prepared, which specifies the terms of the agreement, the value of the share, and its percentage. And the minutes of the general meeting indicating the terms of sale of the part.

Procedure for changing participants

The very procedure of changing members of the company involves registration of changes in the state register. The day of state registration of a participant’s exit from the partnership means that the participant has left it.

The deadline for making changes to the statute of the LLC is 2-3 days from the date of signing the protocol at the state registrar.

The legislation clearly establishes the list of documents to be provided to the registrar, in particular is a statement signed by the director about the state registration of changes, confirmation of payment of the state fee, an act of acceptance and transfer with a notarized certificate.