Depending on whether or not the termination of the membership of a shareholder in a limited liability company occurs as a result of his/her choice, termination grounds divide into two groups: objective and such depending on the shareholder’s choice and free will. Objective grounds include death and full interdiction of a natural person, bankruptcy, expulsion¹, liquidation of the LLC, etc.

The membership of a shareholder might be terminated voluntarily by him/her in the following situations: upon transfer of his/her company shares or upon withdrawal from the company by notice. Only the second option will be subject to this article, since the transfer of shares has already been discussed in detail in another separate publication.

General Information

The unilateral withdrawal of a shareholder is governed by Art. 125, par. 2 of the Commerce Act. The shareholder can terminate his/her membership in the company by at least 3 months written notice prior to the date of termination. The said time period commences following the receipt of the notice by the director of the LLC. It might be longer or shorter if so provided for in the Articles of Association. Notwithstanding the applicable time period, the company and the shareholder may reach an agreement as to the effective date of the notice having been given.

According to legal theory the participation of a shareholder in an LLC is not terminated automatically upon expiration of the notice. However, such understanding does not prevail in the practice of the Supreme Court of Cassation – it has been recognized in a judgment from 2010² that: insofar as the written notice is a legal means for exercising the potestative right of the shareholder to unilaterally cause change in the shareholding of a limited liability company, termination should be deemed to have been effected ipso facto upon expiration of the notice; the law does not condition the occurrence of the legal consequences on the availability of any resolutions of the General Meeting for discharging the shareholder or settling the financial matters with him/her; expiration of the notice has an automatic termination effect on the membership and leads to loss of capacity as shareholder.

The settlement of financial matters is needed only as a consequence from the termination and not as a precondition to its effect. Pursuant to Art. 125, par. 3 of the Commerce act, any subsequent property arrangements are to be made based on a balance sheet for the last day of the month of the termination³.

Application and Necessary Documents

In order for a shareholder who has withdrawn from an LLC to be deleted from the Commercial Register as such the director would need to submit a special application – a standard form application A4. The application may be filed via the Internet as well – by being signed with an electronic signature. A lawyer may be authorized for such purposes as well – the power of attorney should be explicit but does not require any notarization of the signature.

The following documents need to be enclosed to the application:

Written notice and documents evidencing the receipt of the notice by the company;

Minutes with resolutions of the General Meeting;

Amended in accordance with the respective change Articles of Association;

Documents in connection with either the acquisition of the capital shares owned by the former shareholder or the reduction of the registered capital of the company;

Declaration on the truthfulness of the stated for registration circumstances and acceptance of the submitted for announcement acts;

Document for paid state fee.

The Supreme Court of Cassation confirmed in an interpretative decision⁴ the correctness of the practice of the registry officials with the Registry Agency of denying applications filed by shareholders having terminated their membership and thus requesting their own deletion as such from the Commercial Register. It is held in the decision that the leaving shareholder does not have the right to request the deletion of his/her own participation in a limited liability company where the company is unwilling to take active steps with regard to the received notice.

State Fees

Pursuant to the Tariff on the State Fees Collected by the Registry Agency, the state fee for entering changes into the Commercial Register is 30 Levs or 15 Levs when the application is filed electronically, including by an authorized lawyer. Additional fees and costs will be due in case of reducing the capital of the company.

Information about the due attorney fee may be found on page Fees.