Alienation of a share in an LLC is in fact a transfer of the corresponding part of the capital in the authorized capital. This process can be carried out both by selling it or by another method that is not prohibited by law, for example, by donating it to a person. Moreover, it seems possible to sell or donate a share of the authorized capital both to the third party and to the LLC itself, in which the co-founder is a member, if you wish to leave it.
In this article, we will try to analyze in detail how the alienation of the share in the LLC occurs by the example of selling it to a third party, and also consider some of the nuances that arise when the alienation of part of the authorized capital in favor of the company itself.
General Provisions Regarding This Procedure
Often, uninitiated people can confuse among themselves such concepts as “alienation” and “concession”. The second term implies a certain agreement in accordance with which a procedure is carried out for transfer by one creditor in favor of another creditor of the right to demand fulfillment of obligations by a third party. Alienation of the share is a completely different process. It is understood as a transaction involving the sale, donation or other transfer of a share of the authorized capital to another owner.
The procedure in accordance with which there is a procedure for the alienation of the equity in LLC is regulated by two fundamental acts of a regulatory nature, such as:
1. Federal Law "On Limited Liability Companies".
2. The civil code of the Russian Federation.
Alienation of a share to a limited liability company implies a civil law transaction. In accordance with the second paragraph of Article 21 of the aforementioned Federal Law, the co-founder of the organization has the right to sell or otherwise transfer its share in the authorized capital to other founders of the organization and to itself. In addition, the alienation of part of the capital may be made in favor of a third party.
However, the law establishes that other founders have a pre-emptive right to acquire a share. This means that the owner in the process of disposal must first offer her or her part to other founders of the LLC. In the event that they refuse to purchase it, the right to receive is transferred to a third party.
It is important to note one nuance. Upon sale, a transaction on the alienation of shares may be challenged by those founders of the organization who have not received proposals for its acquisition.
According to the current rules, other LLC participants can acquire an alienated share only in the amount that is proportional to the part that they already have.
There is a situation in which the organization’s charter initially prohibits the sale of a share of the authorized capital to third parties. If the co-founders refuse to purchase the alienated part in the presence of such circumstances, then the company itself must purchase it directly. This requirement is mandatory and is aimed at protecting the rights and interests of the founder, leaving the LLC and not having other possible options for the alienation of the share.
Shares of authorized capital, among other things, may be transferred between persons by right of succession or succession. In such cases, when transferring from the founder to another person, the first is deprived of the right to participate in the LLC.
Some additional provisions on the process of alienation of a share by a participant may be initially provided for in the organization’s charter.This document may include, for example, such information:
1. The right of preemptive acquisition by other founders extends only to a part of the share, while the remaining may be alienated in favor of a third party.
2. The price at which the share should be alienated, as well as the procedure in accordance with which it can be changed, may be determined.
3. The preemptive right to acquire the alienated share by other founders of the organization is indicated.
4. The right of preemptive acquisition of a share is provided without respecting the proportionality of the part to the already existing one of the founder.
Preparation and procedure for drawing up an offer
As previously agreed, the founder must first send an offer to transfer the share to the other founders. The offer is essentially a proposal to acquire part of the authorized capital, contains the main provisions of the sale agreement, which may directly include the subject of the transaction, its price, as well as other conditions.
The addressees are other founders of the company or the founder, if he is the only one, or the company itself.
The form of the offer is not established by law, but, in accordance with it, must contain the following data:
1. Information about the seller, which includes his name, passport details, TIN and PSRN (if the seller is a legal entity), etc.
2. Information about the organization, about the share of property for alienation, including its face value and size.
3. Information about the potential buyer. This column should be filled in the same way as the column with information about the seller.
4. Subject and conditions of the proposed transaction.
5. The procedure in which the cost of the alienated share is calculated.
6. The period during which the transaction must be accepted. Often this period is one month, unless otherwise provided by the charter of the organization.
7. Date and signature of the seller.
Offer direction
An offer can be sent directly to the company itself. You can do this in the following ways:
• Present personally to the authorized representative of the organization, who must assure with the signature of the fact of its receipt.
• Direct through a notary public.
• Send by registered mail. In this case, you must have an inventory of the attachment, as well as a notice of delivery.
Despite the fact that the legislation does not oblige to send an offer to other co-founders, it is still necessary to give copies of the offer to them. The founders have the right to accept the offer within a month. In the event that the seller of the share wishes to transfer it to a third party, while the other founders do not object to this manipulation, they can send a statement of consent to the seller. In the event that the offer was not accepted within a month or another period stipulated by the charter of the LLC, other founders lose the right to preferentially receive a share in the charter capital.
The procedure for determining the value of the alienated share
What is the value of the share to be disposed of? This question is asked quite often. The procedure in accordance with which the determination of the value of the alienated share in the LLC takes place is enshrined in paragraph 6.1 of Article 23 of the Federal Law on LLC.
In accordance with this federal law, the cost is determined in accordance with the financial statements of the organization, taking into account the share of a person who leaves the composition of a limited liability company.
At the same time, the data reflected in the reports for the period preceding the date of the preparation of the application for alienation is taken into account. That is, if you take a quarter for the reporting period, and the application was drawn up in the second quarter, then the reporting period accepted for calculation will be the first quarter of the year. The time period within which the required amount must be paid is 3 months.
It is important to note that the value of the share cannot be paid if the assets of the enterprise had a negative value in the reporting period.
Drawing up an agreement on the sale of an alienated share
Drawing up a contract is the next step in the alienation of a share in an LLC in the event that the transfer is on a reimbursable basis. In this case, the document must be compiled in writing, and then certified by a notary. The procedure for notarization is the same when selling both to other founders and to third parties. We will talk about the certification procedure later.
The main condition is to draw up a contract that will meet legal standards, including all significant circumstances and conditions of the transaction.
The circumstances that are considered legally significant and should be reflected in the contract for the alienation of shares are:
• Actual place and date of conclusion of the contract.
• Complete and genuine information about the seller of the share.
• Complete and genuine information about the buyers (buyer) of the share.
• Information about the alienated share, including its characteristics, as well as face value.
• The order in which the settlement between the parties.
• Details of the parties, as well as their signatures with transcripts.
When drawing up a transaction on the disposal of shares, it is worth paying attention to the following nuances:
• Information that characterizes the parties to the transaction must be indicated in full. They must necessarily contain passport data if the parties are represented by individuals, as well as the PSRN, the place where the registration was made, and complete data if the parties are represented by legal entities.
• The alienated share, its size, as well as the nominal and actual value must be clearly indicated.
• The term and procedure for settlement for the alienated share must be strictly defined.
• The contract may contain information on the consequences that may arise in case of non-compliance with the terms of the contract.
• It seems appropriate to indicate in the contract the person responsible for the costs of processing the transaction.
The more complete the data will be presented, the easier it will be to complete the transaction certification procedure.
Notary certification process
A transaction will be declared invalid if it is not certified by a notary.
An appeal to a notary is not required if there has been a transfer of the share of the authorized capital from the participant to the community as a result of the exclusion of the former. Since in fact there was no deal.
That is, a notarized transaction is not certified in the following cases:
- When a share is transferred to a company in the manner provided for in Section 23 of the LLC Law.
- In case of distribution of a share that belongs to the company between the participants of the company and sale of a share that belongs to the company, participant or a third party. This is regulated by article 24 of the LLC Law.
- When the pre-emptive right is used. In this case, an offer is sent to sell part or all of the share in accordance with Section 21 of the LLC Law.
- If a participant leaves the company, then the share is alienated, regardless of the consent of the members of the company, according to the rules of article 26 of the LLC Law.
A notarized transaction on the alienation of an LLC share has undeniable advantages:
- The notary guarantees legality, since all documents are checked for compliance with the law, the identities of the parties to the transaction are established, legal capacity and authority are also determined. Existing arrests and encumbrances in respect of the disposable share are also identified. If something is violated, the notary can not assure the transaction.
- Change of ownership occurs quickly - immediately after the certification of the transaction by a notary.
- Changes to the Unified State Register of Legal Entities are recorded within 5 business days.
In the event that the transfer of the share was made, and the buyer evades the obligation to pay it or notarize, the seller of the share of the authorized capital has the full right to go to court in order to recognize the transaction on the transfer of the share notarized. If the court satisfies the claim, then subsequent steps to certify the transaction will not be required.
Documents to be provided to a notary for certification of a transaction on the alienation of an interest
The package of documents that is subject to transfer to a notary to certify the transaction is strictly regulated by law.
The list of these securities includes:
- The agreement by which the share of the authorized capital was alienated. Must be provided in the amount of three pieces.
- Documents that can confirm the right to dispose of shares by the seller. Such documents are: an agreement on the acquisition of a share, a memorandum of association, a certificate of inheritance.
- Extract from the unified state register of registration of legal entities.
- Documents confirming payment of the sold share.
- Charter LLC.
- Memorandum of association.
- Documents that confirm the consent of other founders to the alienation of the share of the authorized capital.
- Other documents that may be required depending on the circumstances. An example is the consent to the alienation of the spouse of the seller.
Entry into the register
After the actual alienation of a share in the authorized capital of the organization, data on this should be entered into the Unified State Register of Legal Entities. Documents evidencing alienation must be submitted to the relevant authorities by a notary. He must submit an application with the aim of amending the Unified State Register of Legal Entities no later than two days after the transaction on the alienation has been certified. A copy of this application should be subsequently transferred to the LLC. This transfer must be made within three days after the transfer of rights to the alienated share.
That is, neither the buyer nor the seller are required to take any action to transfer data to the registrar. Such an obligation is wholly and entirely vested in the notary public, who assured the transaction of alienation. He sends the documents on his own, and then reports on their transfer to the public.
Features of the alienation of the share of authorized capital in favor of the company
This procedure is similar to the alienation procedure in favor of a third party. Despite this, the alienation of the share of ownership in favor of society has some nuances. Let's consider them in more detail.
• In accordance with federal law, a company receives a pre-emptive right to acquire an alienated share within a week after the founders of the organization decided not to use such a right, or within the same period after the founders refused to acquire the alienated share. In this case, the company should direct the acceptance to the buyer's offer. The charter may fix a different period during which the pre-emptive right of the company is valid.
• In accordance with federal law, a share acquired by a company during the year must be proportionately distributed between its founders or may be put up for sale.
Alienation of the share of the sole founder
As follows from the regulations, the secession of the sole founder LLC is not possible. The only option in which the termination of the participation of the founder in the activities of the LLC is allowed is the liquidation of the legal entity. The decision on this can be taken by the founder himself.
Alienation of a share in the ownership right by the sole founder, however, is possible. And can be made in favor of a third party. However, before making an alienation, this person must be included in the founders with the obligatory entry of data on a change in composition in the register.
Based on the foregoing, it can be concluded that, in general terms, the procedure for the alienation of a share to a limited liability company is the same, regardless of who it is for. In each case, the execution of the transaction requires the preparation of the contract, its notarization, and then - the submission of an application in order to amend the USRLE. Differences exist only at the preparation stage.