Registration of the change of the LLC participant

Contents:

• Reasons for re-registration of the share
• Ways to change the owner
• Purchase and sale of shares in LLC
• Inheritance of a share in an LLC
• Entering a new member into LLC
• Exit of the participant at his own request
• Forced exclusion of a participant

A limited liability company (LLC) is a form of organization and conduct of business, which involves the division of the authorized capital into shares. These shares belong to the founders of the enterprise – persons who benefit from the work of the organization.  

Within the framework of the company’s work, situations often arise when it is necessary to re-register a share in a legal entity to another person or company. This procedure requires certain knowledge, which we will discuss in detail in this article.

Reasons for re-registration of the share

The reasons for alienating a share from one participant and transferring rights to it to another may be different. As a rule, this is:

• Withdrawal of one of the founders from the board of founders for personal reasons.
• Compulsory procedure for re-registration of a share due to violation of the company’s charter.
• Transfer of the right to a share to third parties due to circumstances.
• Share sale.
• Death of one of the founders and inheritance of the share.

It is important to know that registration of a change in a member of a limited liability company (LLC) is a mandatory procedure that must be performed within a certain period after the change in the membership.

Ways to change the owner

The legislation of the Russian Federation does not prohibit legal entities from having several founders – as many as necessary for the normal operation of the business. In the event of a change in the composition of the owners, the transfer of the share can occur in various ways, including:

• On the basis of a transaction (purchase and sale agreements, donations, barter, settlement agreements).
• On the basis of succession (transfer of the share to heirs or legal successors).
• Based on the application of a new participant.
• For other reasons (withdrawal or exclusion of the participant).

In general, you need to know that the state registration of the transfer of a share in an LLC includes the following stages:

1. Collecting the necessary documents. To register the change of a participant, it is necessary to collect a number of business papers, including documents confirming the fact of the change of a participant (for example, a contract for the purchase and sale of a share in the authorized capital of an LLC), as well as papers related to the new participant (for example, a copy of the passport and TIN).

2. Preparation of the application. The application for registration of the change of the LLC participant must be prepared in accordance with the requirements of the legislation and contain the necessary information about the new participant, as well as information about the change in the authorized capital of the LLC.

3. Signing of documents. The application for registration of the change of the LLC participant, as well as other necessary documents must be signed by all LLC participants.

4. It is necessary to draw up the minutes of the general meeting of the LLC participants, at which a decision will be made to amend the company’s constituent documents. It should indicate who is the new participant of the LLC, as well as how many shares in the authorized capital of the LLC he acquires. If a legal entity becomes a new participant, it is necessary to specify its full name, location and TIN.

5. It is necessary to conclude an additional agreement to the constituent documents of the LLC. It should reflect all the changes that were adopted at the general meeting of the LLC participants, including changes concerning the new participant. The Supplementary agreement must be signed by all participants of the LLC, including the new participant.

6. Submission of documents to the tax inspectorate. An application for registration of a change in the membership of an LLC and other necessary documents must be submitted to the tax inspectorate within 30 days from the date of the change in the membership.

7. Registration of changes in the Unified State Register of Legal Entities. After receiving the application for registration of the change of the LLC participant, the tax inspectorate registers the changes in the Unified State Register of Legal Entities (Unified State Register of Legal Entities).

8. Obtaining a certificate of registration. After checking the documents by the tax inspectorate and making sure they are correct and complete, a certificate of registration of the change of the LLC participant will be issued.

When the founder changes, there is an exit of one (several) owners of the company and / or the entry of one (several) new partners. Each method of changing the founder of an LLC has its own characteristics, so it is necessary to consider them in more detail.

Purchase and sale of shares in LLC

The conclusion of a purchase/sale agreement depends on who the asset is being sold to and what is written in the charter of the LLC in this regard. It is important to check the document for restrictions on the size of the share being sold and the priority right of redemption. If there are prohibitions, they should be observed, since in this case a judicial response from the other founders may follow. Also, if the members of the company have an agreement on the exercise of the rights of participants, then its provisions also need to be taken into account.

The procedure for transferring a share under a purchase/sale agreement looks like this:

• Checking the charter for preferential purchase.
• If another LLC participant has to buy out the share, then you need to send a report and wait for a response. According to the law, participants can buy out a share within 30 days from the date of receipt of the offer by the company, and the company itself – within 7 days from the date of expiration of the pre-emptive right of participants. In case of refusal or expiration of the deadline, the right passes to third parties.
• Drafting a purchase/sale agreement.
• Collection of documents, including the document on the basis of which the seller bought the share and payment orders.
• In case of joint ownership, obtain the notarized consent of the spouse for sale. Consent is not required when making a transaction for the alienation of a share acquired earlier through a gratuitous transaction, before the registration of marriage or in the order of inheritance.
• Collect other documents that the notary will request.
• Notarize the purchase/sale agreement.
• Submission of an application by a notary to the Federal Tax Service for making changes to the Unified State Register of Legal Entities.
• Sending a copy of the application to the LLC.
• Obtaining a certificate of registration.

Inheritance of a share in an LLC

In the case of opening an inheritance case, it is important to take into account two points: the absence of prohibitions on inheritance of shares in the charter and obtaining consent for the transfer of shares from other participants.

If the first condition is met, the share will belong to the heir from the date of the opening of the case. To do this, a person must obtain a certificate of inheritance and notify the founders in writing about joining the members of the LLC. Next, the Federal Tax Service submits form P13014 and a certificate of inheritance.

In the case of obtaining permission from other participants, the order changes. So, the heir applies in writing to the LLC with a request to give the consent of all participants to transfer the share to him. The founders send a response with their decision within 30 days. Ignoring is equivalent to consent. But in order to avoid litigation, it is better to get a written document.

After receiving the consent, the heir submits an application within three days. The data in the Unified State Register of Legal Entities will be entered within a week. After that, the heir will become a full-fledged member of the LLC.

It is important to take into account that if the founders refuse or the inheritance is prohibited, the heir receives monetary compensation equal to the value of the share.

Entering a new member into LLC

Such an order is feasible on the basis of a person’s application, provided that there are no restrictions in the charter. In the application, you need to specify the desired size of the share, the procedure and the deadline for making a contribution.

On this occasion, a meeting is convened in the company, where a protocol is drawn up. The questions put forward at it should be accepted by all participants. This concerns:

• Increase of the authorized capital.
• Acceptance of a new participant.
• Changes in the size of the participants’ shares.

If there is only one owner in the company, then the decision of the sole founder is drawn up instead of the protocol.

The new participant contributes to the authorized capital within six months after the meeting. After that, there is a month to submit documents to the Federal Tax Service:

• A certified application in the form P13014 and the minutes of the general meeting.  
• Confirmation of payment of the fee (800 rubles).
• Documents on making a contribution to the Criminal Code.
• The new version of the Charter.

Exit of the participant at his own request

Going out of business can be voluntary. This possibility is prescribed in the company’s charter. In this case, the procedure does not require the consent of other persons. However, it is important to know that:

• The sole founder cannot leave the company in this way.
• So all members cannot leave the society.

Exit on a voluntary basis can occur both with the change of the founder, and without it. In the second case, the share will be redistributed among the remaining participants.

It is important to know that it is important to inform the notary about your intention to leave the business. He himself will certify the exit and himself will hand over the application to the LLC. In addition, the notary sends form P13014 to the Federal Tax Service.

Forced exclusion of a participant

Here it is necessary to have good reasons and a court decision. The reasons for exclusion may be as follows:

• Actions that have harmed the company.
• Inaction that has harmed the company.
• Avoidance of participation in meetings.
• Forgery of documents.
• Collusion with competitors.
• Providing false information.
• Illegal withdrawal of money from accounts.

Partners who have a share of more than 10% in the authorized capital can file a claim for exclusion. If the court sides with the plaintiffs, then it is necessary to submit to the IFNS an application in the form P13014 and a court decision on exclusion that has entered into force. The share of the retired stalls may go to third parties or be redistributed between partners.

When registering changes of LLC members, it is important to observe the procedure and requirements of the law. Otherwise, violations can lead to fines and problems with the tax authorities. It is important to note that incorrectly executed registration of a change in an LLC participant can lead to undesirable consequences, such as additional time and resources spent on correcting errors. Therefore, it is important to seek the help of professional lawyers in order to complete the registration procedure correctly and in a timely manner. VALEN specialists will help solve many problems with the re-registration of a share in the authorized capital of LLC. We provide detailed consultations, as well as assistance in collecting and processing documents.

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