Sale of a share or an entire LLC in Belarus

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  1. We make sure that the share is paid
  2. We study the charter of the LLC
  3. We obtain the consent of the spouse
  4. We inform the participants of the LLC
  5. Conclusion of a share purchase and sale agreement
  6. We inform the LLC about the conclusion of the purchase and sale agreement
  7. Registration of changes and additions to the charter of LLC
  8. Government and bank notification

The change in the membership of a Limited Liability Company (hereinafter referred to as LLC) can be carried out in several ways. So, there are the following ways to change the composition: an LLC participant can submit withdrawal statementa new participant can be accepted by making an additional contribution to the authorized capital with the consent of the existing participants, an unscrupulous participant can be expelled from the LLC in court, a share in the authorized capital can be foreclosed, instead of a deceased participant in the ownership of shares in the authorized capital of the LLC join the heir. However, all of the above methods provide only limited variability, so by increasing the authorized capital of the LLC, you can enter a new participant, but by reducing the authorized capital of the LLC, you cannot withdraw the current participant. The most universal mechanism for changing the composition of participants is the mechanism for buying and selling a share in the authorized capital of an LLC. Using this mechanism, you can either increase the number of participants to the maximum number provided by law, or reduce to one participant.

Step 1. We make sure that the share has been paid.

Only the paid share in the authorized capital of the LLC is subject to alienation. What does it mean? The contribution corresponding to the share sold must be fully contributed to the statutory fund. In Belarusian LLCs, as a rule, money is used as a deposit. This means that it is necessary to study statement from the settlement account of LLC, which would confirm the payment of the corresponding amount by the founder, whose share is alienated. Why is it important? The sale of the unpaid share may be invalidated.

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Step 2. We study the charter of the LLC(ODO).

Belarusian corporate legislation contains a high degree of discretion on many issues related to the sale of an LLC. So, the charter may contain a requirement for mandatory notarization of the transaction. In this case, the transaction for the alienation of a share, made in a simple written form (as a general rule), will be considered invalid. Therefore, it is necessary to carefully study the charter of an LLC, even if you are sure that the charter of an LLC is the most standard.

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Step 3. We obtain the consent of the spouse.

You need to get spouse consent for the sale of a share acquired in marriage. You can often come across the opinion that such consent is not necessary, since a share is not property, but is a property right. Nevertheless, if such a condition is provided for by the charter of the LLC, then its implementation is necessary. Consent, unless otherwise provided by the charter of the LLC, can be given in simple writing.

Step 4. We inform the participants of the LLC(ODO) on the alienation of a share to a third party.

The members of the LLC and the LLC itself have the preemptive right to acquire the share of the participant on the terms proposed by them. Therefore, initially it is necessary notify other participants and the LLC itself about the intention to sell its share to a third party. Such notification must be delivered by courier against the signature of an authorized person or sent by registered mail with a receipt acknowledgment. The notification must contain the terms of the proposed transaction: price, terms, payment terms. The deadline for responding to the proposal to exercise the preemptive right is set in the charter, but cannot exceed 30 days. Waiver of preemptive right must be in writing.

What if one of the participants wants to take advantage of the pre-emptive right to purchase my share? If the participant decides to use the preemptive right in compliance with all the norms of the law, then it is illegal to interfere with such a transaction. However, it should be remembered that the terms of the transaction are in any case dictated by the seller and he has the right to refuse it before the conclusion of the contract.

The decision to buy out a share by the LLC itself or to refuse such a buyout is made by the general meeting of the LLC participants. In this case, the cost of the share (part of the share) is paid at the expense of the LLC itself, the sale and purchase agreement is signed on behalf of the LLC by its manager. Subsequently, the share redeemed by the LLC must be either distributed among other members of the LLC in proportion to their shares in the authorized capital within a year, or it must be realized in compliance with the rights of pre-emptive redemption. It should be understood that if there is one participant in the LLC, then the LLC will not have the right to acquire a share.

For a single-member LLC, this step can be skipped.

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Step 5. Conclusion of a sale and purchase agreement for a share in the authorized capital of an LLC(ODO).

If all the above formalities are met, the parties may proceed to sign sale and purchase agreement for a share of LLCThe necessary conditions of such an agreement will be: subject, price, terms of payment, responsibility of the parties. The price and terms of payment must match the terms offered to the “old” members in the notice (see Step 4).

As already mentioned, the contract for the sale and purchase of a share in the authorized capital of an LLC can be concluded in a simple written form, unless otherwise provided by the charter. When signing a deal, it is necessary to check the credentials of the persons signing the agreement. A power of attorney, a contract with a director can act as documents confirming authority. The identity of the seller (buyer) is confirmed by an identity document.

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Step 6. Notify LLC(ODO) on the conclusion of a sales contract.

For LLC, a new participant becomes a participant from the moment the corresponding notification is provided with a copy of the contract attached. Sometimes this step is neglected, however, if the director of the LLC (ODO) evades the steps to register a change in the composition of the founders, then the fact of providing the notification and documents is essential.

For an LLC with a single participant, it is sufficient to issue the appropriate decisions of the sole participant to sell a share.

Step 7. Registration of changes and additions to the charter of the LLC(ODO).

After holding extraordinary meetings with the same и new participants and having received a notification about the change in the composition of the founders (for an LLC with a single participant, an appropriate decisions of the sole participant on actions after the purchase of all shares of the LLC). The director of the LLC within 2 months is obliged to make changes and additions to the charter of the LLC by registering them.

To do this, he or a trustee of the LLC, in the presence of the new founder, shall submit to the registering authority:

- an application for state registration of changes and additions with the necessary annexes;

- the charter of an LLC signed by the founders in duplicate and on disk (we have specially developed two different articles of association: one for LLC with a single memberwho acquired the shares of the remaining participants; other for LLC with several members, one of which acquired a share in the authorized capital);

- a payment document confirming the payment of the state fee;

- a document confirming the powers of the applicant.

 

Step 8. Notification of state authorities and the bank about the change in the composition of the founders.

The tax authorities, the Federal Tax Service and the bank must be sent information mail with the attachment of a copy of the charter registered in connection with the change of founders. Thus, we update the information on the composition of LLC members used by these organizations in their activities.

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