Exclusion of a shareholder from a limited liability company – determination of the value of shares (part 3)

In a trial for the exclusion of a shareholder from a limited liability company, the value of the shares must be determined by the court on the basis of the actual value of the shares of the shareholder subject to exclusion, this value being determined as at the date of service of the lawsuit (Article 266 § 3 sentence 2 CCC).

Both the doctrine and the case law emphasise that the actual value of the shares is not necessarily their carrying value, and much less their nominal value. The determination of this actual value is not a legal but an economic operation, and therefore it is sometimes emphasised that even if the plaintiff had not requested the appointment of an expert to determine the actual value of the shares, this expert should be appointed by the court ex officio, as it is considered that the court is not sufficiently competent to determine this actual value on its own.

The actual value of the shares referred to in the second sentence of Article 266 § 3 of the Companies Act is the market (selling) value that the excluded shareholder could have obtained on the market if it itself had agreed to sell its shares to a third party (Supreme Court judgment of 12 December 2013, ref. II CSK 121/13). In the same judgment, it was assumed that if it turned out that the analysis concerning previous transactions with the company’s shares does not provide sufficient grounds for determining the value of the excluded shareholder’s shares, it is possible to refer to other circumstances that may be relevant for determining the actual value of the shares. These may be data resulting from share transactions of companies similar to the limited liability company in terms of both size and type of business. It is for the court’s discretion what weight to give to the takeover price proposals made by the parties in the course of the proceedings. Such a reference point may also be the market value of the entire company’s business, taking into account the company’s general and financial condition, the degree of development of its business, its position on the market, its clientele, as well as taking into account all other elements, including public charges relevant to the determination of the value of the business, which may affect the determination of the takeover price of the shares.

In cases concerning the exclusion of a shareholder, experts should present different methods for the valuation of the shares, including the so-called asset method and the income method, and indicate which one is more appropriate for determining the actual value of the shares in a particular company.

The court’s final determination, in a final judgment, of the value of the shares of the excluded shareholder constitutes the basis for settlement between the withdrawing shareholder and the remaining shareholders or a third party.

You can read about the legal grounds for the exclusion of a shareholder from a limited liability company here, and about the nature of a claim in a case for the exclusion of a shareholder of a limited liability company here.