Exclusion of a shareholder from a limited liability company – nature of the demand (part 2)

The exclusion of a shareholder from a limited liability company essentially aims at depriving the shareholder, although for a payment, a property right which is the shares in the limited liability company. In this sense, this demand comes close to a demand for expropriation of real estate with fair compensation as referred to in the Real Estate Management Act of 21 August 1997. In addition, shareholding rights in a limited liability company enjoy the protection of property guaranteed by Article 64 of the Polish Constitution. This means that the rank of the demand for exclusion of a shareholder is significant and, consequently, an action for exclusion requires both a high degree of evidentiary meticulousness and a detailed legal analysis that would convince the court that there are sufficiently compelling reasons to justify the deprivation of the shareholder’s constitutionally protected rights.

When presenting the facts justifying the exclusion of a shareholder, it is necessary to recall all negative and directed against the company or the other shareholders behaviour of the excluded shareholder that has occurred in the history of the company’s existence so far. In addition to the presentation of such conduct by the shareholder, evidence must be gathered and submitted with the claim to show that the claims are supported by the evidence.

Then, in the legal argument, a negative assessment of these behaviours should be made, showing that they lead to a gradual degradation of the company ( see A. Szajkowski, M. Tarska, Code of Commercial Companies. Commentary, vol. II, Warsaw 2005, p. 810).

Despite the divergent jurisprudence as to the qualification of a case for the exclusion of a shareholder of a limited liability company as a property case, since 2007 there has been no doubt in principle that such case is a property case ( see the resolution of the Supreme Court of 6 June 2007, ref. no. III CZP 56/07; similarly, the decision of the Supreme Court of 26 September 2013, ref. no. II CZ 44/13), although it should be mentioned that there are commentators who seem to approve of the view of the non-property character of a case for the exclusion of a shareholder.

Regardless of whether a case for exclusion of a shareholder of a limited liability company is a property case or a non-property case, a fixed fee of PLN 5,000.00 is payable on a suit in this case.

You can read about the legal grounds for exclusion of a shareholder from a limited liability company here.