Issue: № 5, 2025
Doi: https://doi.org/10.37634/efp.2025.5.10
This paper explores the exit of a shareholder from a limited liability company as one of the effective mechanisms for resolving deadlock situations. The relevance of the topic stems from the rapid development of contractual business models, particularly the formation of joint ventures with equal shareholdings (50/50), where the absence of adequate mechanisms for resolving corporate conflicts may lead to a complete operational standstill. In such cases, the parties often find themselves unable to make key decisions, posing a direct threat to business continuity and the overall functioning of the company. Ukrainian legislation regulates exit from a limited liability company through provisions in the Civil Code of Ukraine and the Law of Ukraine “On Limited and Additional Liability Companies”, which grant shareholders the right to exit the company. However, this right is subject to limitations – particularly where a shareholderholds 50% or more of the share capital. Under the current legislative framework, such an exit is only permitted with the consent of the other shareholders, unless otherwise stipulated by the company’s charter. Drawing on academic research, the paper offers an analysis and systematisation of foreign approaches to shareholder’s exit. Jurisdictions such as Switzerland, Turkey, the Czech Republic, the Netherlands, the United Kingdom, and Poland permit extrajudicial exits from companies where certain conditions are met, as defined by founding documents or legislation. These may include cases where a shareholder voted against a decision or where their rights were infringed. The author supports the idea of supplementing legislation with a clear list of such conditions but exclusively as an additional means of resolving deadlocks. Particular attention is given to the issue of determining the fair value of the exiting shareholder’s share, as this frequently becomes a point of dispute. The paper recommends that company charters and shareholders agreements include provisions on appointing valuation professionals, valuation standards, and timeframes for settlement. These measures would enhance legal certainty and help prevent conflict. In conclusion, the paper underlines the necessity of improving the legal regulation of shareholder exit from LLCs as a means of resolving deadlock situations.
Keywords : limited liability company, exit of a shareholder, deadlock, corporate conflict, shareholders agreement, share valuation, joint venture
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