Comparative Legal Analysis of the Concept of the Limited Liability Company Share

N3
Ekaterine Pipia
07/2021
DOI: 10.15350/26679434/H.3.4
pp. 52-70

Abstract:

The paper deals with the concept of share of a limited liability company (LLC). The aim of the research is to analyze the essence and nature of LLC share on the basis of used legal literature and legislative norms and, as a result, to form the concept of LLC share. For this purpose, the paper analyzes the norms regulating LLC share, LLC share as a subjective right and duty, the LLC share as a transferable right, its relation to the capital of LLC, additionally, LLC share is compared to the JSC stock and the types and classes of LLC share is characterized. Furthermore, the paper contains a comparative-legal and normative-legal analysis of Georgian, German, Russian, American and English laws.

As a result of the study, it is established that LLC share is a subjective right to participate in LLC based on the status of LLC shareholder, which consists of a combination of the rights and responsibilities of a shareholder. The scope of participation (rights and duties of a shareholder) in LLC depends on the size of the shareholder’s share, although LLC charter may lead to an imbalance in it (for example, by issuing different classes of shares). LLC share is a transferable right – a special object of civil turnover. During the transfer, the rights and duties assigned to the shareholder from LLC share are inseparable and are transferred jointly, thus, the transfer (assignment) of these rights and duties separately is not permitted. In relation to transfer of LLC share, the principle of free transferability is reinforced by the legislation. However, this principle can be restricted by special regulation as well as by the charter of LLC. A common form of such restriction is consent of the company and the right of first refusal. In respect of the nature of the object of civil turnover, LLC share is similar to the share of the JSC. However, there are differences between them, which are manifested in the type and size of participation right, in the closer personal union of LLC shareholders compared to JSC shareholders.