Notarial Control over the Withdrawal of a Participant from a Limited Liability Company: Problems of Legal Regulation and Implementation

Introduction: the article explores problems in the implementation and legal regulation of notarial control over the withdrawal of a participant from a limited liability company. Such external control, introduced from January 1, 2016, was necessitated by numerous ‘seizures’ of corporate governance, including highly-publicized cases. Thus, the introduction of notarial control in this area of social relations was dictated by the need to combat abuse in situations where a participant leaves the company, on the one hand, and the need to protect the interests of third parties, primarily the company’s counterparties and creditors, on the other hand. The purpose of the article is to identify the main legal problems of notarial control over the withdrawal of a participant from an LLC on the basis of the participant’s membership cancellation letter and his claim for compelling the company to buy his share (in cases where the general meeting of participants has decided to make a large deal or to raise the authorized capital while the participant voted against such a decision or did not participate in the voting) as well as to propose ways to solve the identified problems. Methods: the study employed a set of general scientific and special legal methods, the latter primarily included legal-dogmatic and hermeneutic methods. Results and conclusions: it is necessary to standardize the procedure of notarial control over a participant’s filing an LLC membership cancellation letter and over his claim for compelling the company to buy his share, by means of imposing on the notary the obligation to submit to the registration authority, in both cases, an application for making appropriate changes to the unified state register of legal entities as well as to send the company the notarized letter (claim) of the participant, together with a copy of the application submitted to the registration authority. The importance of introducing notarial control over the claim for compelling to buy the participant’s share is substantiated in the paper for cases where the company’s charter prohibits the alienation of a share or part of a share possessed by a company participant to third parties and when other company participants refused to buy them, or where a consent has not been obtained to sell a share or part of a share to a company participant or a third party while obtaining such a consent is stipulated in the company’s charter