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Selling an LLC: a step-by-step algorithm

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The sale of a share in an LLC involves a complete or partial change in the composition of participants. A partial change in the composition of participants can be made using other mechanisms of corporate law. However, a complete simultaneous change in the composition of participants is possible only by concluding a contract of sale of a share (s). In addition to the sale of shares, there are the following mechanisms for changing the composition of participants:

  • participant exit,
  • increase in the authorized capital,
  • inheritance transfer.
The cost of the service sale LLC
Sale of LLC From 200 USD ($)

 

1 step. Preparatory stage.

At this stage, the presence of obstacles to the alienation of a share (part of a share) is studied in accordance with the legislation and the charter of the LLC. What can be the obstacles? First of all, it is necessary to verify the fact of the formation of the authorized capital. Unpaid share is not subject to alienation. Failure to comply with this rule entails the nullity of the transaction.

The problem of alienation of unpaid shares has become especially acute recently. After the legislator has eliminated the obligation to form the authorized capital in full before registration.

Statutory fund indicated upon registration of LLCmust be formed within 12 months from the date of registration. When increasing the authorized capital, it must be formed within the time specified in the decision of the general meeting, but no later than the date of registration of the charter reflecting the increase.

Sometimes restrictions on the disposal of shares are imposed in the charter. If such restrictions are imposed within the framework of the dispositivity prescribed by law, they will be valid.

2 step. We check buyers.

Further, it is important to remember that the Belarusian legislation establishes a number of restrictions for persons who decide to become founders. So, they cannot be founders in other legal entities that are in the process of liquidation. They cannot have a criminal record for economic crimes. Moreover, there are other obstacles. Therefore, such persons cannot be acquirers of a share.

3 step. Respect of the preemptive right.

The circle of entities entitled to acquire a share in the authorized capital of LLC is strictly regulated. First of all, these are the existing participants of the LLC, who have the pre-emptive right to acquire an alienable share. The procedure for the implementation of this pre-emptive right is determined in the charter. However, the charter cannot contain a waiver of preemptive rights.

It is important to remember that preemptive right is exercised on the terms proposed by the seller. The buyer when exercising the preemptive right cannot "bargain". The corporation itself also has a preemptive right to acquire a share. The pre-emptive right does not apply to cases when a share is disposed of as a gift. However, many editions of the charters of Belarusian corporations extend the pre-emptive right to acquisition and gift.

In case of refusal of persons having the preemptive right, the buyer may sell the share to third parties. These persons express their refusal in writing. It is believed that the general meeting of participants accepts the refusal on behalf of the business company whose share is alienated.

4 step. Getting the consent of the spouses.

The issue of the need for the written consent of the spouse to alienate the share is debatable. On the one hand, if the share was acquired during the marriage, it is assumed that it should also be included in the array of jointly acquired property. On the other hand, by its legal nature, a share in the authorized capital cannot be real estate. That is, Belarusian legislation does not require a mandatory written form.

It seems that it is necessary to obtain the consent of a spouse to alienate a share in the authorized capital. Firstly, judicial practice often stands in this position. Secondly, it is possible to draw an analogy with the certification of a similar transaction by a notary, which in any case will require such consent. Thirdly, the truth is known that it is better to obey the observance of higher legal standards.

If there is a marriage contract that provides for the free disposal of personal property, then the spouse should not give consent to the sale of the share.

5 step. Conclusion of the contract of sale.

The sale of an LLC takes place on the basis of a share purchase and sale agreement concluded in a simple written form. Meanwhile, the founders may provide for the obligation to notarize the transaction in the charter. However, such a rule of the charter is now rare.

The share purchase and sale agreement usually contains the following conditions:

  • subject of agreement
  • contract price
  • settlement conditions
  • responsibility of the parties.

Make sure the buyer signs the purchase agreement in front of you. You should first check his passport data. If the buyer is a legal entity, then its legal capacity can be checked on the Internet through the USR portal.

The legal capacity of a foreign legal entity cannot always be verified on the Internet. In this case, it is necessary to request an extract from the commercial register of the state of incorporation.

For the buyer, the contract may be signed by a person authorized on the basis of a power of attorney. It is generally accepted that individuals issue a power of attorney in writing. Powers of attorney for the commission of legally significant actions by foreign persons can also be certified by foreign notaries, subject to legalization.

6 step. Notice Ltd.

The buyer must notify the company of the fact of the transaction. Often, at the same time as the sale of the LLC, the leader becomes one of the new participants and this rule is neglected. However, this should not be done, since this obligation is imperative, and not optional.

7 step. Registration of changes and additions to the charter.

Within 2 months from the notification of the LLC about the transaction, the new members of the LLC are required to develop and approve a new charter of the LLC. This charter of the LLC is subject to registration by the head of the LLC with the registration authority. New participants or their representatives by notarized power of attorney sign the founder's questionnaire in the presence of employees of the registration authority.

A copy of the registered charter of the LLC is provided to the bank, the tax inspectorate, the FSZN and other competent authorities at the discretion of the head.

You can read more about the issue of amendments and additions to the charter in the material on our website.

You can find up-to-date information on the amount of the state fee for making changes and additions to the constituent documents of a commercial organization on the website of the Minsk City Executive Committee.

Sale of LLC in Belarus: drawing conclusions.

The sale of an LLC in Minsk involves compliance with many formalities:

  • checking the limits of shares and buyers,
  • obtaining the consent of the spouses,
  • observance of preemptive rights.

The share purchase and sale agreement must contain all the essential conditions stipulated for this type of agreement. The key stage is the registration of changes and amendments to the constituent documents of the company. From the moment of such registration, the transaction for the sale of LLC can be considered virtually completed.

What can we offer our clients on the topic “Sale of a share in an LLC”?

We can offer the following legal services:
- pre-sale check in the form of a legal audit (due diligence) of the business company you are acquiring;
- support in the sale and purchase of a share in the authorized capital, guarantees of legal purity;
- support for the introduction of amendments and additions to the constituent documents of a business entity in connection with a change in the composition of participants.
E-mail info@legaltime.by or call + 375291102388, we will be happy to assist you.

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