RE-PURCHASE OF STAKES IN MULTI-MEMBER LIMITED LIABILITY COMPANIES

A member of Multi-member limited liability companies is entitled to request the company to repurchase that member’s stake if that member has voted against a resolution or decision of the Board of Members.

Procedures of

RE-PURCHASE OF STAKES

In a multi-member limited liability companies

A member is entitled to request the company to repurchase that member’s stake if that member has voted against a resolution or decision of the Board of Members on the following issues:

Amendments to regulations of the company’s charter on rights and obligations of members and the Board of Members;
Reorganization of the company;
Other issues prescribed by the company’s charter.
A written request for stake repurchase shall be sent to the company within 15 days from the day on which the resolution or decision is ratified.
Within 15 days from the day on which the request to repurchase is received, the company shall repurchase that member’s stake at market value or at a value determined in accordance with the company’s charter, unless another value is agreed upon by both parties. The payment shall only be made if the company is still able to pay its debts and other liabilities afterwards.
In case the company is not able to pay for the repurchase of the stake as requested, the member is entitled to sell the stake to another member or a non-member.

Each form of enterprise has its own advantages and dis-advantages. The investors shall base on actual business industries, business plans to find the right form of enterprise, create more business advantages and prevent risks in advance.

Procedures of re-purchase or transfer of stakes, increasing or decreasing charter capital in multi-member limited liability companies also have more required compliance procedures on tax on investment capital, rights and obligations of the members, business records management…thus those procedures shall be conducted in very strictly and lawful manners.

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