How Can I Receive the Value of My Shares When Leaving a Limited Liability Company?

Withdrawal and Expulsion of Shareholders

Prepared by: Constantinople

When you wish to leave a limited liability company, the withdrawal provisions in the articles of association and the possibility of agreement are examined first. Where just cause exists, a court order permitting withdrawal may be sought. Merely telling the other shareholder that you have left does not automatically end shareholder status and all obligations. A share transfer and a withdrawal action are also different legal procedures.

The actual value of the shares matters for the exit payment; the capital amount stated at formation does not always show the amount recoverable. The company's immovable property, debts, operating position and financial records may affect valuation. Prepare recent balance sheets, shareholder current accounts, significant asset documents and earlier transfer offers. Loans made by a shareholder to the company or money used from the company may be accounting items separate from share value.

The existence of a right to withdraw does not itself resolve when and from which resources the amount will be paid. Statutory payment conditions, available resources and the company's continuation are assessed together. The validity of a contractually specified exit price must also be examined against the particular clause. It cannot be assumed that one valuation report will end the dispute or that immediate payment will be made at the start of proceedings; the parties' allegations and records are compared.

Prepare the articles of association, financial statements and past share purchase offers. The reason for leaving, actual share value and payment conditions are assessed separately.

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