ON THE DETERMINATION OF THE AUTHORIZED CAPITAL AND PARTICIPANT SHARES OF LLC AS WAYS OF PROTECTING CORPORATE RIGHTS
Authors:   Vasyl’ Stus Donetsk National University, Belianevych O.A. 
Published: August 2023

The effectiveness of ways to protect corporate rights, including members of a limited liability company (LLC), and developing a catalog of these ways is one of the key problems for the theory of Corporate Law. The law-enforcement practice of economic courts dealing with corporate disputes, the number of which has increased significantly in recent years, is an important factor in ensuring the protection of property rights, creating favorable conditions for investment activity in the country, and stable functioning of the corporate sector of the economy. The article draws attention to the fact that at the moment the decisions of the Supreme Court are dominated by the position that a comprehensive list of ways to protect a member of an LLC who believes that his right or legal interest is violated by changes in the composition of members or the distribution of shares of members of the company is contained in Art. 17 of the Law of Ukraine “On State Registration of Legal Entities, Individual – Entrepreneurs and Public Organizations”. On the basis of the analysis of the current practice of the Supreme Court, controversial issues of the court's application of the norms of Part 5 of Article 17 of this Law (in particular, in cases where the participant of the LLC has not fulfilled his obligation regarding property participation in the authorized capital of the company). It is argued that when considering corporate disputes, the principle of proportionality should be applied: the reduction of a participant's share in the authorized capital of an LLC is not a violation of his corporate rights, if such a participant has not made an additional contribution to the company's authorized capital in accordance with the decision of the general meeting to increase the amount of authorized capital. Attention is drawn to the fact that part 5 of Art. 17 of the Law of Ukraine “On State Registration of Legal Entities, Individuals Entrepreneurs and Public Organizations” does not establish as such methods of protecting the rights and interests of participants in disputes about the size of shares in the authorized capital or the composition of members of a limited liability company. For the purposes of Part 5 of Art. 17 of this Law, a court decision of the relevant content is considered as an alternative to the decision of the general meeting of participants. In the court decision, as a document on the basis of which relevant registration actions are carried out, the size of shares in the authorized capital, the size of the authorized capital must be specified as the factual circumstances of the real property participation of the participants in the authorized capital of the company established by the court. The court can protect the right of the participant in the way chosen by the plaintiff, while the lawsuit claims to determine the size of the authorized capital of the LLC and the size of the shares of the participants in the company can be considered by the court as a derivative together with the main claim that protects the violated right (invalidation of the decision of the general meeting of participants, etc.).