Withdrawal of a limited liability company participant from the company

The right of an LLC participant to withdraw from the company

The exit of an LLC participant from the company is understood as the termination of his activities as one of the members of the company.

In accordance with current legislative norms, any participant in the company has the right to leave it by alienating the property that belongs to him by right of ownership.

Until 2009, all issues that regulated the withdrawal of participants from the LLC were considered in Article 26 of Federal Law No. 14. However, after some adjustments were made to the standard, this article examines exclusively the basic requirements that determine the legal basis for the withdrawal of a participant from the LLC :

• A participant in the company has the right to leave its ranks by alienating the property that belongs to him, regardless of the consent of the other founders, but provided that this circumstance is provided for by the current charter of the organization;
• The right of an LLC participant to withdraw may be agreed upon in accordance with the company's statutory documentation, unless otherwise provided by the current legal framework;
• The withdrawal of a participant from the company does not relieve him of responsibility for performing all actions provided for by the charter until he leaves the organization.

As for the reasons for making such a decision, they can be very diverse:

• Acquisition of a participant’s share by the company or one of its founders;
• The presence of serious reasons for leaving the LLC (serious illness, moving to another city or country, limitation of legal capacity, etc.);
• The death of a company participant and the founders’ lack of consent regarding the inclusion of his heir in the LLC’s membership;
• Reluctance to engage in entrepreneurial activities carried out by society;
• Disagreement with company policy. In this case, the founders who voted for the adoption of any fateful decision must buy out the share of capital from the member of the company who voted against the innovations.

How to remove a founder from an LLC step by step

First step: Submitting a resignation letter

An application for withdrawal of a participant in 2021 is prepared by a notary and only a notary can submit it to the tax office. A company participant leaving the founders must contact a notary office and fill out an application addressed to the general director to withdraw from the LLC founders. This application must reflect the size of the share of the authorized capital that will be transferred to the company and have it notarized. After completing the application, the notary personally prepares an application in form P13014 for the transfer of the share of the withdrawing participant to the company. It is impossible to simultaneously transfer a share to a new participant or the remaining participant in the company.

The minutes of the extraordinary general meeting of participants or the decision of the only participant when a participant leaves is not drawn up; only the leaving participant applies to a notary to formalize the withdrawal and, without the consent of other participants, draws up an application for withdrawal; accordingly, the company’s charter should not contain a ban on the withdrawal of a participant by filing an application and absence requiring the consent of other participants. The average cost of notary services is 5,000 rubles; for registration you will need to provide a charter and a passport, plus some notaries require the notarial consent of the spouse.

After 5 working days from the moment the notary submits the application to the tax office, the exit will be registered, and updated information will appear in the Unified State Register of Legal Entities extract that the share of the withdrawn participant has transferred to the company. During the year, it is necessary to distribute the company's share to a new participant or to those remaining in the company.

Second step: Share distribution

During the year, the share that was transferred to the company after registration of the exit must be distributed, usually it is distributed to the remaining participant in the company, but it can also be left at the company until called for, and then transferred to a new participant.

To distribute the share, the remaining participant in the company will need to prepare a decision on the distribution of the share. If there are several participants left in the company, then a protocol and a purchase and sale agreement are drawn up, but this agreement is not certified by a notary and is signed by the participants and the general director.

You will also need to fill out an application in form No. P13014 for the distribution of shares. There is no state fee for registering this change.

Third step: Certification of documents by a notary

Before submitting documents to the tax office, a notarization of the registration application will be required. The applicant will be the current general director of the company.

Before visiting a notary, you will need to obtain a current extract from the Unified State Register of Legal Entities, no older than 10-15 days, check with the notary about its need, in Moscow and large cities notaries do not require it, but in distant regions it may be necessary. Prepare all the documents described above, as well as take a complete set of constituent documents (certificates of state registration, registration, current charter, protocol or decision on the appointment of the general director, etc.)

The average cost of notary services is 1,700 rubles. for certification of the form, if an authorized person will submit and receive, then a notarized power of attorney and a copy of the right to submit and receive documents will be required + 2,600 rubles. for a power of attorney.

Fourth step: Submitting documents to the tax office

It is necessary to go to the registering tax authority (in Moscow this is Federal Tax Service No. 46, which is located at the address: Moscow, Pokhodny Proezd, building 3, building 2. Tushino District), receive a coupon in the electronic queue and submit the prepared documents for registration of changes .

To register changes to the tax office you must submit:

• The decision on the distribution of the company's share or the Minutes of the extraordinary general meeting of participants and the purchase and sale agreement;
• Application in form No. P13014, certified by a notary.

After submitting documents for registration, we will receive a receipt confirming the acceptance of documents; after five days, according to the receipt, you must receive the finished documents.

Fifth step: Receiving ready documents

On the sixth working day, you must go to the tax authority and receive the completed documents by receipt. You will receive a new entry sheet in the Unified State Register of Legal Entities with all registered changes.

The procedure for the withdrawal of an LLC participant from the company

Despite the fact that each participant in a business company has the right to leave the organization, the state establishes certain requirements that must be met. In particular, a free exit from the company can be in those situations where this procedure is prescribed in the statutory documentation.

If this circumstance is not in the charter, then in this case, exit from the company can be carried out in agreement with all the founders of the company, or by decision of the courts.

As for the procedure for the exit of participants from the LLC, it is prescribed in Article 26 of Federal Law No. 14. In accordance with the legislative recommendations provided for by these standards, the exit procedure should be carried out in stages:

• Checking a company participant for the possibility of leaving the LLC. First, it is necessary to determine which procedure will be applicable for the withdrawal of a participant from the LLC in a given case. If the charter provides for the free withdrawal of founders from the organization, then the process will be quick, but if the statutory documentation does not establish any requirements, then in this case it will be necessary to reach a consensus with the remaining founders or go to court.
• At the second stage, the applicant for leaving the organization must submit an official written notice to the executive management structures of the company (often this is the general director of the association). The application has a prescribed form, so it must be filled out in compliance with all legal regulations;
• After the application is submitted for consideration to the management structures of the LLC, and is accepted in accordance with the rules of law, the applicant for exit is required to receive a written protocol stating that within three months from the date of submission of the document, the company undertakes to pay it off in full by returning his share of capital in cash specified in the protocol;
• After all issues of interaction between the company and its former participant have been resolved, their joint work is officially terminated, and the founder finally leaves the company’s membership.

When following the procedure for leaving the organization, special attention must be paid to the form and content of the written application.

The law stipulates that it must be submitted exclusively in writing and bear the personal signature of the applicant.

At the same time, the application has a certain form, and therefore it must be filled out with an eye to all the legislative features of this process.

Essentially, this need arose because, in most cases, a written statement is the only factual evidence that a participant voluntarily decides to leave the society.

Withdrawal of a participant from the founders of a limited liability company

In this article, we will analyze one of the options for changing the composition of the participants of an LLC - the withdrawal of a participant from the company, we will analyze in detail the procedure for registering the withdrawal of a participant (we will answer the questions: how to remove the founder from the list of participants of the company, what is required of the participant himself, what actions must be taken by the company), nuances of a participant’s withdrawal from the company, consequences, taxation features. Let's start with the fact that it is possible to unilaterally withdraw from the founders of an LLC only in cases where this right is provided for by the charter. This provision can be established during the establishment of the LLC or introduced by decision of the general meeting of participants, adopted by all participants unanimously, then this change is made to the charter, an application for registration is submitted in form P13001 (read more in the article “Amendments to the charter of the LLC”). In addition, the withdrawal of company participants from the company, as a result of which not a single participant remains in the company, as well as the withdrawal of the only participant of the company from the company is not allowed (and this is logical, there cannot be a company without founders, in this case it is necessary to proceed through the liquidation procedure or in an alternative way to “close a business”, get out of it). That is, it is impossible to formalize the simultaneous withdrawal of all three participants from the LLC, however, it is possible to formalize the withdrawal of two participants out of three. If you want to formalize the exit of the sole founder from the LLC, you must first accept a new participant in the LLC, and then formalize the exit (read about alternative ways to re-register an LLC to another person and the procedure for their implementation in a separate article). Also, the charter of the LLC may provide for obtaining the preliminary consent of other participants to withdraw from the LLC; in this case, leaving the LLC without consent may be considered invalid, therefore, before filing an application to withdraw from the LLC, we recommend that you carefully read the charter of the organization. LLC participants also need to take into account that it is impossible to remove a founder from the LLC without his consent; the withdrawal of a participant from the LLC founders can only be voluntary; to exclude an LLC participant from the founders, the legislator provides for a different procedure and grounds for exclusion.

Step-by-step instructions “How to formalize the withdrawal of a participant from the founders of an LLC? Procedure for a participant to leave an LLC”

To formalize the withdrawal of a participant from an LLC, we recommend following the following instructions:

Step 1. We fill out a participant’s application for withdrawal from the society

If the charter requires the consent of other participants to leave the LLC, then their written consent must be obtained.

The LLC Law does not establish requirements for the content of an application for withdrawal from the company. It is recommended to include the following information in your application for leaving the LLC:

• data of the organization from which the LLC participant plans to leave (name, INN, OGRN, location address)
• Full name (name) of the LLC participant submitting an application for withdrawal, passport details, residence address of the participant (for an individual participant), OGRN, INN, location address (for a legal entity participant)
• share size
• references to the constituent documents that establish the right of a participant to withdraw from the LLC, and the law
• references to the constituent documents that establish the procedure for paying the actual value of the share (if the charter establishes a different procedure that differs from the law)
• the requirement to pay the actual value of the share, the form of payment and the period during which the actual value of the share must be paid (3 months from the date of receipt of the application for withdrawal, unless another period is established by the charter). If the provisions of the charter on the deadline for payment of the actual value of the share are changed after the participant has submitted an application to withdraw, the company is obliged to pay the actual value of the share in accordance with the provision of the charter on the new deadline. In addition, the procedure and timing of payment of the actual value of the share can be regulated by agreement of the parties, but the courts differ in their assessment of the legality of such actions. The actual value of the share is paid in cash. However, with the consent of the participant, he may be given in kind property of the same value. If a participant paid for his share with property, when leaving the LLC he does not have the right to demand the return of this particular property. Therefore, if you wish to receive property as payment for the actual cost of a share in an LLC, we recommend that you indicate this in the application, but the company has the right to refuse payment in kind.
• Bank details for payment of the actual value of the share
• date of signing the application
• signature of the participant (representative of the participant, details of the document certifying the authority to sign this application).

Currently, the signature of a participant on an application to withdraw from an LLC must be notarized.
Therefore, the application is signed in the presence of a notary, who certifies the signature with the presentation of a passport and other documents confirming the authority to sign (for example, a protocol on the election of the sole executive body of a participant - a legal entity, a notarized power of attorney for a representative of a participant - an individual). Please note that the consent of the spouse is not required to submit an application for the withdrawal of a participant from the founders of the company.

An application for the exit of a foreign citizen can also be completed by a foreign notary, certified with an apostille and translated into Russian with a notarized translation. If a foreign citizen signs an application with a notary in Russia, it is necessary to provide the notary with a notarized translation of the identity document into Russian.

The application for the withdrawal of a legal entity participant from the founders of the LLC is signed by the head of the legal entity or an authorized representative.

In accordance with judicial practice, if a participant changes his decision to leave the society, he can withdraw such a statement. If the company refuses to satisfy his request to withdraw his application to leave the company, the participant has the right to challenge such a statement in court according to the rules on the invalidity of transactions (Resolution of the Plenum of the Supreme Court of the Russian Federation No. 90, Plenum of the Supreme Arbitration Court of the Russian Federation No. 14 of December 9, 1999 “On some issues application of the Federal Law “On Limited Liability Companies”).

Step 2. Submit an application for the participant’s withdrawal from the society

The participant submits (sends) an application to withdraw from the LLC to the LLC. The methods for submitting (directing) an application to withdraw from an LLC are not established by law. Therefore, we recommend sending your application to the company in one of the following ways:

• delivery against signature.
  Based on the explanations of the courts, we can conclude that the application can be served on the person performing the functions of the sole executive body, the chairman of the board of directors (supervisory board), if such a body is formed in the LLC and, in accordance with the charter, the receipt of such documents is within its competence , the chairman of the collegial executive body, if such a body is formed in an LLC and, in accordance with the charter, the receipt of such documents is within its competence, an employee of the LLC, whose duties include transmitting correspondence to the appropriate person.
• sending by Russian Post to the address of the LLC indicated in the Unified State Register of Legal Entities
  , with a list of attachments, in which indicate the name and details of the documents being sent

The share passes to the company from the moment it receives the participant’s application to withdraw from the company. The application will be considered delivered even in cases where it was not delivered to the addressee due to circumstances beyond his control or the addressee did not familiarize himself with it.

Step 3. The company must carry out state registration of changes related to the exit of an LLC participant

Registration of changes in the Unified State Register of Legal Entities based on the application of an LLC participant must be carried out within 1 month from the date of change in the composition of participants. When determining the LLC's course of action after receiving a participant's application, the following must be considered. The share (part of the share) of the participant passes to the company from the date of receipt of the application for the participant’s withdrawal from the LLC. Therefore, when a participant leaves the LLC founders, a protocol confirming the founders’ decision to register changes in the Unified State Register of Legal Entities may not be drawn up. However, if you plan to distribute the share of the withdrawn participants among the remaining founders or otherwise dispose of it, it is necessary to hold a meeting and draw up minutes.

In order to register the withdrawal of a participant from an LLC, it is necessary to prepare the following documents to the tax authority:

• application in form No. P13014 (the signature of the sole executive body, or another person who has the right to act without a power of attorney on behalf of the company, or an LLC participant (if the composition of the founders changes, such an application can be signed by an LLC participant) on the application must be notarized)
• application of a limited liability company participant to withdraw from the company
• a notarized power of attorney or a copy thereof, the fidelity of which is certified by a notary, if the documents are submitted by a representative

To certify the signature on the application in form P13014, the notary must submit constituent documents confirming the participant’s right to exit, a list of participants, registration certificates, documents confirming the applicant’s authority.

By order of the Federal Tax Service of Russia dated August 31, 2020 No. ED-7-14/ [email protected] the Federal Tax Service approved new application forms for registering companies, making changes to the Unified State Register of Legal Entities, constituent documents and other registration actions

. These forms are valid from November 25, 2020. From this moment on, the application forms P13001, P13002, P14001 and P14002 lost their validity. To make changes to the Unified State Register of Legal Entities and constituent documents, a single application form P13014 is used.

There is no state fee for state registration of changes related to the withdrawal of a participant from the LLC.

A company can register, by submitting a single set of documents, one application for making changes to the exit of several participants at once. It is also possible to formalize simultaneously the withdrawal of a participant from the LLC and the distribution of shares in the protocol of the company.

The procedure for submitting documents for state registration of exit from an LLC

Documents for registering an exit from an LLC are submitted to the registration authority (the tax authority at the place of registration and the registration authority may not coincide, for example, in Moscow the registration authority is MIFTS No. 46).

Documents are submitted to the registration authority:

• directly to the registration authority of applicants or a representative of the organization
• by post with a declared value upon delivery and a description of the contents
• in the form of electronic documents signed with an enhanced qualified electronic signature, using information and telecommunication networks, including the Internet, including a single portal of state and municipal services
• through MFC

The specialist responsible for receiving and registering documents registers them, assigning them an incoming number indicating the date of receipt, and issues a receipt for receipt. Information about the fact of submitting documents to the registration authority is posted on the official website of this authority no later than the business day following the day the documents were received. The applicant can track the results of document review on the Federal Tax Service website.

The period for registration by the tax authority of a participant’s exit from an LLC is general and is 5 working days.

The document confirming the fact of making an entry in the Unified State Register of Legal Entities is the entry sheet of the Unified State Register of Legal Entities. The period for sending such a document should not exceed one working day following the day of expiration of the period established for state registration.

Step 4. The company is obliged to calculate and pay within the established time frame the actual value of the share of the withdrawing participant

The actual value of a participant's share corresponds to a part of the value of the company's net assets, proportional to the size of this share. In this case, the value of net assets is determined as the difference between the amount of the organization’s assets accepted for calculation and the amount of the organization’s liabilities accepted for calculation.

Formula for calculating the value of net assets:
Net assets = Assets (Non-current assets + Current assets) - Liabilities (Long-term liabilities + Short-term liabilities)
The value of net assets is determined according to the accounting statements of the LLC for the last reporting period preceding the day of filing the application to leave the LLC. At the same time, the LLC Law does not specify what kind of reporting should be used for the purpose of determining the actual value of the share.

At the same time, parts 2 and 4 of Art. 13 of the Accounting Law establishes two types of accounting (financial) reporting: annual and interim. According to Part 4 of Art. 13 of the Accounting Law, interim accounting (financial) statements are prepared by an economic entity in cases where the legislation of the Russian Federation, regulatory legal acts of state accounting regulatory bodies, contracts, constituent documents of an economic entity, decisions of the owner of an economic entity establish the obligation to submit them. Thus, the LLC is obliged to prepare interim accounting (financial) statements in the cases provided for in Part 4 of Art. 13 of the Accounting Law.

For the preparation of financial statements, the reporting date is considered to be the last calendar day of the reporting period (clause 37 of the Regulations on Accounting and Reporting). Based on the above, to determine the actual value of the share, you should use the financial statements for the last period before the day of filing the application to leave the company: for the year, quarter or month - depending on the period for which the LLC is obliged to prepare it.

An example of calculating the actual value of the share of a withdrawn LLC participant:
The authorized capital of Business LLC is 10,000 rubles and is divided between two participants into shares, each with a nominal value of 5,000 rubles. The value of the LLC's net assets is 500,000 rubles. One of the participants decided to leave the society. The actual value of this participant's share is calculated as follows: Calculation option No. 1 (simple option, when there is information on the percentage of the participants' shares) Participation share of the withdrawing participant = 50%. The actual value of his share = 50% x 500,000 rubles = 250,000 rubles. Calculation option No. 2 (it is better to use if the percentage is difficult to establish)% Actual cost of the share = 5,000 rubles.
(nominal value of the participant’s share) x RUB 500,000. (net asset value of LLC) / 10,000 rub. (authorized capital of LLC) = 250,000 rubles. The actual value of a share in the authorized capital of an LLC is paid out of the difference between the value of the LLC's net assets and the size of its authorized capital. If such a difference is not enough to pay the actual value of the share (part of the share), the LLC is obliged to reduce the authorized capital by the missing amount. In the event that a decrease in the authorized capital of the company may lead to its size becoming less than the minimum amount of the authorized capital of the company determined in accordance with the Law on LLC, the actual value of the share is paid from the difference between the value of the net assets of the company and the specified minimum amount of the authorized capital of the company.

In practice, a company participant does not always agree with the amount of the actual value of his share (part of the share) determined by the company. In this case, the participant has the right to challenge the paid actual value of the share in court. If a participant disputes the size of the actual value of the share determined by the LLC, the burden of proving the size of the share lies with the defendant, i.e. OOO.

To a participant who leaves the LLC, the company pays the actual value of the entire share or part of the share if the share is not fully paid.

If the actual value of the share is paid in cash, then the documents confirming the payment will be a payment order (for non-cash transfers) or a cash order (for cash payments). If property is transferred to pay for the cost of a share by agreement of the parties, then such payment is confirmed by an act of acceptance and transfer of property.

The period for payment of the actual value of the share is 3 months from the date of receipt of the application by the company, unless a different period is established by the charter. According to judicial practice, in case of untimely payment, along with the principal amount of the debt, interest may be collected from the company for the unlawful use of other people's funds (Article 395 of the Civil Code of the Russian Federation).

The company does not have the right to pay the actual value of a share (part of a share) in the authorized capital of the company or to issue in kind property of the same value if:

• at the time of payment or delivery of property in kind, it meets the criteria of insolvency (bankruptcy) in accordance with the federal law on insolvency (bankruptcy)
• as a result of payment or delivery of property in kind, the specified signs will appear in the company (paragraph 4, paragraph 8, article 23 of the LLC Law)

Rules for taxation of payment of the actual value of a share

When paying the actual value of a share in an LLC to an individual participant in connection with withdrawal from the LLC, the company must calculate and withhold personal income tax from the payment, except in cases where the share in the LLC belongs to the participant continuously for more than 5 years. Property and property rights received by an individual upon leaving the organization are valued at market value.

• The personal income tax rate in connection with this payment is:
• 13% if the income recipient is a resident of the Russian Federation
• 15% if the recipient of the income is a non-resident of the Russian Federation. This rate applies unless other rates are established in the double taxation agreement with the state of which the recipient of the income is a resident.

A property deduction for income paid upon leaving the company does not apply (however, if the taxpayer has the right to a tax deduction on other grounds, he can submit a 3-NDFL to the tax authority within 3 years to formalize the deduction and tax refund). Personal income tax must be withheld from cash income at the time of transfer of funds. When transferring property (property rights), personal income tax is withheld from any income paid to the participant in money. In this case, you can withhold no more than 50% of such payment. If during a calendar year it is impossible to withhold the calculated amount of tax, you must inform the taxpayer and the tax authority at your place of registration about this.

Dvitex lawyers will help you optimize taxation when selling a share in an LLC and correctly fill out the declaration, as well as represent the interests of the taxpayer to the Federal Tax Service during a desk audit of the declaration. Read more about tax lawyer services for individuals here.

Business owners often ask whether it is possible to formalize the withdrawal of a participant from the founders of an LLC without paying the actual cost of the share (free of charge), for example, by agreement of the parties. Based on the systemic interpretation of the law and judicial practice, the legal norm on the obligation to pay the LLC participant the actual value of the share is imperative and cannot be changed by agreement of the parties, therefore there is numerous practice of challenging such agreements by withdrawing participants and collecting payment. Therefore, concluding an agreement to change the amount of payment or exclude it has risks for the owner of the company and for society. In these cases, it is recommended not to formalize the withdrawal of a participant from the founders of the LLC with a reduced payment or without payment, but to formalize the withdrawal of the founder in a different way, if it is possible to reach an agreement with the founder (for example, a purchase and sale agreement for a share in the LLC).

Step 5. Distribution of shares between LLC participants, sale of the share of a withdrawing participant or reduction of the authorized capital

Within 1 year from the date the company receives a participant’s application for withdrawal, the share of the withdrawn participant must, by decision of the general meeting of company participants, be distributed among all company participants in proportion to their shares in the company’s authorized capital or offered for purchase to all or some of the company’s participants and (or) if this is not prohibited by the company's charter, to third parties. When concluding a purchase and sale agreement between the company and a participant or a third party, notarization of the transaction is not required. Distribution of a share or part of a share between participants of the company is permitted only if, before the transfer of the share or part of the share to the company, they were paid for or compensation was provided for them. Shares or a part of a share in the authorized capital of the company that have not been distributed or sold within 1 year must be redeemed, and the size of the authorized capital of the company must be reduced by the amount of the nominal value of this share or this part of the share.

Read more about the distribution of shares between LLC participants in the article “Distribution of shares in an LLC

For more information about the procedure for reducing the authorized capital of an LLC, read the article “Reducing the authorized capital of an LLC.”

Also, if you plan to re-register a share in an LLC to another person through the entry of a new participant, and then the exit of the current founder, we suggest that you familiarize yourself with the detailed procedure for implementing this procedure in the article at the link.

Don’t have time to independently process the withdrawal of a participant from the LLC founders and distribute the share?

Contact the lawyers of the Dvitex company, we will quickly prepare all the necessary documents for registering changes with MIFTS No. 46 and the tax authorities in the Moscow region. The services of our lawyers are paid only after successful registration, this is a guarantee of quality and timing of provision] You can find out about the cost of legal services for registering the withdrawal of a participant from an LLC[/anchor] here In addition, we provide services for preparing a set of documents for registration (without filing with registration authority), this service is available to clients from any region of Russia and can be ordered online.

Transfer of the share of an LLC participant, in case of withdrawal, to the company

In fact, the withdrawal of a participant from the company does not entail such a negative phenomenon as a reduction in the authorized capital of the organization.

In accordance with legislative norms, in such a situation, the applicant for leaving the company receives his share in cash.

As for the other founders, they buy out the share of the participant who left the company. And in this case, it will be distributed among them in accordance with expenses. It is allowed that the repurchase of a share of capital can be carried out either by one person or by a group of persons already included in the LLC, unless a different decision was made at the meeting of shareholders.

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