Shares owned by a limited liability company : grounds and consequences

Bosyk Ol'ga Igorevna ORCID: 0000-0002-1392-4785 Senior Lecturer; Department of Civil Law and Labor Law; Surgut State University 628415, Russia, Khanty-Mansiysk Autonomous Okrug, Surgut, Lenin str., 1, room 724 bosykolga@yandex.ru Other publications by this author

I. Introduction

Special regulatory features of a legal entity make it possible to identify an independent organizational and legal form of corporations - a limited liability company (hereinafter - LLC, company, corporation). Property isolation is initially presented in the form of authorized capital divided into shares, and organizational unity is the supreme governing body, which is formed by the participants of the corporation by default (Part 1, paragraph 1, Article 2 of Federal Law No. 14 - FZ dated 02/08/1998 "On Limited Liability Companies" (hereinafter - the Law on LLC). The legal capacity of an LLC arises from the moment when information about its creation is entered into the unified state register of Legal Entities (hereinafter referred to as the Unified State Register of Legal Entities) (clause 3 of Article 49 of the Civil Code of the Russian Federation). The Unified State Register of Legal Entities is a federal information resource, the information in which is informational in nature and is derived from the actions of the registering authority ^{[2, p.30]}, the entry sheet of the unified state register of legal entities is the title document of the corporation ^{[1, p.16]}. Among the documents submitted for the state registration of the company, a special place is occupied by the decision of the founders to create a corporation, which determines the specifics of the legal personality of the LLC.

At the general meeting, the founders must make decisions on various issues that determine the legal fate of the corporation. These decisions include the size of the authorized capital, the procedure and terms of its payment, the size and nominal value of the founders' shares (paragraph 3, paragraph 2, Article 11 of the Law on LLC). When forming the authorized capital, the founders acquire the right to participate in return for the contributed property, which passes to the LLC and is called a contribution, not a share, therefore their identification is unacceptable^{[3, p.19]}. The authorized capital is divided into deposits, not shares. A person becomes a subject of corporate legal relations at the stage of the company's establishment by making a contribution to the authorized capital, which is confirmed by information from the entry sheet of the Unified State Register of Legal Entities in the form of information about the share. An LLC participant has the right to exercise the right of participation, including the formation of the will of the corporation through decisions of the management bodies after the state registration of the company. The supreme body of the LLC is the general meeting of participants (hereinafter referred to as the OSU), which makes decisions on the activities of the other management bodies of the corporation ^{[4, p.34]}. The composition of the OSU is determined through the general regulatory feature of the company: The participants form the will of the LLC by exercising the right to participate (clause 1 of Article 65.1, clause 1 of Article 65.3 of the Civil Code of the Russian Federation). Accordingly, a reimbursable transaction for making a contribution to the authorized capital of a corporation has a law-forming character for the emergence of a corporate legal relationship between an LLC and a participant. This legal feature is determined by the fact that the information about the share in the authorized capital in the list of the Register of Legal Entities hides the right to participate. The latter, as a subjective civil law, belongs to the participants of society, otherwise contradicts the theory of independence of a legal entity as a subject of law. A limited liability company, as a corporate organization, arose as a result of the development of the doctrine of a legal entity. LLC has autonomy of will, property isolation, organizational unity and the need to satisfy a legitimate interest ^{[5, p.3]}. If an LLC made contributions to its own authorized capital in order to obtain the right to participate in the implementation of its will, then a legal vacuum would arise. A legal entity is simultaneously a subject of law and an object managed by an individual, which illustrates its dual legal nature ^{[6, p.131]}.

The will of the society has a secondary character, as it is expressed through the decisions of the governing bodies, which represent the coordinated will of the individuals forming these bodies. The full-fledged legal capacity of the company is possessed by its participants, who, through the right of participation, form the governing bodies. Legal capacity is unthinkable without the manifestation of the will possessed by individuals ^{[7, p.5]}. If one of the participants of the LLC is another corporation, then the right to participate is realized through the decisions of its governing bodies. The rule of law does not allow LLC to make contributions to its own authorized capital in order to obtain certain powers, due to violation of the three-part structure of legal relations ^{[8, p.56]}. Corporate legal relations combine relations related to the right of participation and obligations between participants and the corporation (paragraph 1, paragraph 1.2 of the Concept of the Development of Civil legislation of the Russian Federation). Russian legislation establishes the grounds on which shares belonging to an LLC arise without granting anyone the right to participate (Articles 23 and 24 of the Law on LLC). The real right to the authorized capital arises from the very beginning from the corporation, and the participant has the right to participate. Such authority does not belong to the company due to the fact that the obligations between the participant and the LLC are terminated (Article 413 of the Civil Code of the Russian Federation).

The legislation does not define the share in the authorized capital, the rights to which allow the participants of the LLC to participate in its activities, and does not establish any special type of share owned by the company. The participant receives the right to participate for an indefinite period and exercises it at his discretion within the framework of corporate and contractual relations. The shares may belong to the corporation for one year, during which it is necessary to make transactions on their alienation or reduce the authorized capital. The LLC does not have the right to participate, therefore, the shares belonging to it are not taken into account when voting at the general meeting of the company's participants, when distributing the profits of the corporation and the property of the LLC during liquidation (clause 1 of Article 24 of the Law on LLC). The transfer of rights to a share in the authorized capital to an LLC affects its interests, affects its property status and entails the adoption of certain decisions by the supreme assembly.

Articles 23 and 24 of the LLC Law contain legal provisions on the grounds and consequences of the occurrence of a share owned by the company. However, due to the lack of their systematization, difficulties arise in understanding their meaning. These rules contain legal constructions such as distribution and repayment, and it is unclear whether they are transactional or have the nature of succession, or relate to other legal grounds. This approach leads to the appearance of a strange construction, according to which the company owns the right to participate in its own authorized capital. If the grounds that affect the dynamics of civil relations are of legal importance, then, taking into account the literal interpretation of article 23 of the Law on LLC, the corporation should have rights and obligations towards itself after obtaining rights to a share in its authorized capital. A corporate legal relationship does not arise due to the impossibility of exercising the right of participation, and the obligation relationship between the LLC and the participant on the formation of the authorized capital is terminated. The authorized capital belongs to the corporation on the basis of property law, the grounds and procedure for its formation do not affect this. Such features affect the types of legal facts, as a result of which the rights to a company's share in its authorized capital arise and terminate.

Scientific discussions about the understanding and meaning of legal facts, as a result of which corporate legal relations arise, change and terminate, are closely related to the discussion of the concept of a share in the authorized capital. From the literal interpretation of the regulations, it follows that a member of the company owns a certain set of powers in the form of a right of participation, which is fixed in the form of a share in the authorized capital. The possession of the latter gives a person a special legal status of a member of the corporation. Among the various rights, a special place is occupied by the right to alienate a share in the authorized capital, which arouses scientific interest, embodied in various articles ^{[8, p.275]} and monographs ^{[9, p.10, 10, p.30]}. The share owned by the corporation rarely attracts the attention of scientists, although it is closely related to the legal personality of the company and the potential interests of the participant, for example, difficulties in making various transactions in the presence of an undistributed share, changes in the composition of the corporation on the basis of succession or division of jointly acquired property. I.S.Shitkina in a scientific and practical commentary on the Law on LLC explores the legal regime of the shares acquired by the company and their further legal fate, taking into account the permissible turnover ^{[11, p.56]}. The scientist addresses the issues of the emergence of rights to a share from a corporation through acquisition and the permissible limits of subsequent alienation, taking into account the rights and legitimate interests of participants. The scientific and practical commentary on the law does not contain an analysis of the legal facts entailing the appearance and termination of a share owned by a corporation.

The emergence of rights to a share in the authorized capital of the company, as one of the permissible regulatory restrictions on transactions with shares in the authorized capital of participants, is considered in the comments on the practice of considering economic disputes prepared by the team of authors of the Institute of Legislation and Comparative Law under the Government of the Russian Federation ^{[12, p.30]}. When researching the problems of inheritance of a share in the authorized capital of a company, N. A. Lifanova draws attention to various abuses of rights by participants who specifically refuse to accept an heir into the corporation. The purpose of such behavior is to create a share belonging to the company, which will later be divided among the participants without taking into account the interests of the heir ^{[13, p.50]}. S. A. Burlakov, analyzing the powers of the participant expressed in a share in the authorized capital, comes to the conclusion about the dual nature of these rights. The grounds for the emergence, modification and termination of corporate legal relations are related to certain legal facts that affect the integrity of the participant's powers. Otherwise, we can talk about the division of his rights into the rights to a share in the authorized capital of an LLC and the rights from owning it ^{[14, p.64]}. The analysis and systematization of the grounds for the emergence and termination of rights to a share in the authorized capital of a corporation makes it possible to clarify and understand the features of an LLC as an independent legal entity, the specifics of the powers of participants and determine the meaning and significance of the appearance of such rights.

The methodology of civil law research has its own specifics, which is due to the development of the science of civil law, permissive regulation taking into account various areas of private law, general contexts of a philosophical and legal nature and the peculiarities of the national legal order ^{[15, p.16]}. The study of the history of the share owned by LLC is closely related to the formation of entrepreneurial activity in Russia during the period of economic changes at the end of the twentieth century. A limited liability company as a legal structure after a significant break due to historical events appears in Article 19 of the Fundamentals of Civil Legislation of the USSR and the Republics of 1991, approved by the Supreme Council on 05/31/1991 No. 2211-129. The share of each participant was initially determined in the authorized fund of the company and fixed in the constituent documents. The contributions of the participants formed the property base of the corporation in the form of an authorized fund, which could potentially ensure satisfaction of creditors' claims in case of insufficient property ^{[16, p.125]}. There were no rules on legal facts, on the acquisition or occurrence of rights to a share in the authorized capital of a corporation, contrary to the rights of participants. It was determined that the authorized capital, formed at the expense of deposits, fully belongs to the company. The norm on the share owned by an LLC appeared in the original version of the Law on LLC dated 08.02.1998, although it has undergone changes, but has not lost its force. This appeal to the formation and change of the legislator's understanding of the legal nature of LLC demonstrates the importance of the historical method in civil research. The science of civil law is closely related to legal regulation, therefore, the doctrinal understanding of some constructions affects the consolidation of certain categories in the rule of law. This category is the share owned by the company, which the legislator allocates on an equal basis with the share owned by the participant, although the grounds for the emergence and termination of rights to them differ.

The method of permissive regulation made it possible to systematize legal facts and classify them taking into account the limits of autonomy of the will of the participants, freedom in the formulation of certain provisions of the charter. The general contexts of a philosophical and legal nature and national law and order determine aspects of domestic civilistic research, which are determined by the peculiarities of worldview and legal understanding. Normativism as a methodological basis of the work involves the study of exclusively civil law norms, therefore, the researcher does not refer to the norms of other industries. Consequently, the dogmatic methodology of the study of the civil law problem – the grounds and consequences of the emergence of a share belonging to society, is determined by a set of methods of cognition. The latter differ significantly from the methods of, for example, comparative legal or special legal research and are closely related to the goals and objectives of the study ^{[17, p.11]}.

The purpose of the work is to develop and construct new theoretical provisions on the grounds for the emergence and consequences of a share owned by a limited liability company. The objectives of the study are to determine the prerequisites for the corporation to have rights to a share in its authorized capital, to establish the nature of such rights, to systematize and classify the grounds for their occurrence and termination.

II. The grounds for the occurrence of a share owned by an LLC

Civil and corporate legal relations arise from the grounds fixed in the norms of law or arising from their meaning and general principles. These grounds are related to life circumstances that depend on the will of an individual and affect his rights and obligations. Since these grounds are related to the rule of law, they are called legal facts, as fait accompli phenomena. An open list of grounds for the emergence of civil rights and obligations, as legal facts, is provided for in Article 8 of the Civil Code of the Russian Federation. The rights and obligations of an LLC participant and the legal status of the company are determined by the norms of the Civil Code of the Russian Federation and the Law on LLC, which provide for the possibility of transferring rights to shares in the authorized capital to another participant or a third party on the basis of a transaction, succession or other legal basis (Part 1 of Article 21 of the Law on LLC). As a result of these legal facts, the participant acquires the right to participate and becomes a subject of corporate and binding legal relations with the company.

Civil legal relations between authorized and obligated subjects are divided into absolute and relative, and according to the method of satisfying interests – into real and binding ^{[18, p.45]}. Corporate legal relations, according to the legislation, are described in a narrow sense, limited to the right of participation and obligations between the participant and the company. However, this leads to the appearance of a strange construction of the share owned by the corporation (paragraph 1.2 sec. II Concepts of the development of civil legislation). The resolution of disputes on the ownership of a share in the authorized capital of the company does not relate to corporate legal relations, since they are not related to participation in a legal entity and its management ^{[19, p. 119]}. Consequently, the legislation leaves open the question of the type of legal relations that arise after the company receives rights to a share in its authorized capital. The above thesis is a normative abstract phenomenon, in reality the authorized capital belongs entirely to the company. From article 23 of the Law on LLC, which is called "Acquisition by the company of a share or part of a share in the authorized capital", it follows that its name and content are correlated as private and general. The legislator uses in this norm a different order of appearance of the share belonging to the company, depending on whether the expression of the will of the latter is significant or not. Such a basis allows us to systematize the content of article 23 of the Law on LLC on: the acquisition by the company of rights to a share in the authorized capital and their transfer to it as a result of certain legal facts.

T. F. Efremova in the modern explanatory dictionary of the Russian language argues that the meaning of the verbs "to acquire" and "to pass" differs depending on the person performing the action. Thus, "to acquire" means to receive something into ownership, to become the owner of something through one's own active actions ^{[20, p.67]}. The etymological meaning of the words makes it possible to understand the legal meaning of the division of the grounds for the emergence of a share belonging to a society in accordance with the realization of its subjective rights. Accordingly, the first group includes cases when an LLC acquires rights to a share on the basis of its own will, which is expressed through a decision of the general meeting of the corporation's participants.

The Law on LLC provides for the possibility of the company acquiring a share in its authorized capital in the following cases:

• as a result of the exercise of the pre-emptive right to purchase, but subject to the relevant conditions in the charter and the refusal of the participants (paragraph 2, paragraph 4, paragraph 1, paragraph 18, Article 21 of the Law on LLC);
• at the request of one of the participants, when other participants do not want to buy it or do not give their consent to alienation to a third party, if the charter contains such provisions (paragraphs 1 and 2 of paragraphs 1, paragraph 7, Article 23 of the Law on LLC);
• if the participant voted against the decision of the general meeting on making a major transaction or on increasing the authorized capital, then he has the right to declare the exercise of the right to buy out a share by the company (paragraph 2, paragraph 2, Article 23 of the Law on LLC);
• The company has paid the actual value of the share that was foreclosed upon at the request of the creditor of the debtor participant (paragraphs 6 and 6 of paragraph 7 of Article 23, paragraph 1 of paragraph 2 of Article 25 of the Law on LLC).

As a result of the realization of the subjective right of an LLC in the form of a purchase and sale agreement, a share belonging to the corporation arises. The grounds for this are defined by the regulations, but some of them must be specified in the charter, otherwise they are not applicable. The purpose of establishing these grounds is to consolidate a certain ratio of the right to participate in the corporation, and not the personal composition of the participants. The decision of the society, as an independent subject of civil rights, is expressed through the combined will of individuals who form its supreme governing body. The General Meeting of the company's participants issues its property and management interests for the desire of the legal entity to retain the membership. At the same time, the company has an obligation to pay the purchase price or the actual value of the share in the authorized capital, and in return, according to the legislator, receives a share in its authorized capital, which is not conditioned by anything. The financial and economic indicators of the LLC decrease due to the alienation of a highly liquid asset – cash, and the participant, under certain circumstances, can receive this share free of charge. Consequently, an LLC is not interested in acquiring a share in its own authorized capital, unlike a participant who wants to reduce his property losses.

The second group of grounds is formed by cases when the rights to a share in the authorized capital are transferred to the company as a result of the actions of the participants. At the same time, the latter do not pursue the goal of creating a share owned by an LLC, but the expression of will is directed at something else. However, the LLC receives a share in its own authorized capital. This construction is an exception to the general rules of Roman law: "whoever did not participate in the formation of an obligation bond, the obligation does not apply to him" ^{[21, p.40]}. An exception to this rule on the basis of the principle of freedom of contract are agreements in favor of a third party, which entail the latter's rights to one or both sides of the obligation (clause 3 of Article 308 of the Civil Code of the Russian Federation). As a result, a third person acquires a right, which is recognized in the doctrine as a second right ^{[22, p.99]}. This right allows a third party to establish or change a certain legal relationship through a unilateral transaction ^{[23, p.210]}. Usually, a third party is such at the time of conclusion of the contract, and then replaces the creditor or receives certain rights. An LLC receives rights to a share in its authorized capital not by analogy with an agreement with a third party, but as a result of termination of its binding relationship with the corporation.

The second group consists of the following cases:

• expiration of the payment period for the share in the authorized capital of the Company at its establishment (paragraph 1, paragraph 3, Article 16, paragraph 3, paragraph 7, Article 23 of the Law On LLC);
• making a transaction on alienation of rights to a share in the authorized capital in violation of the procedure for obtaining the consent of the Company (paragraph 1, paragraph 2, paragraph 2, paragraph 10, paragraph 3, paragraph 18, Article 21, paragraph 4, paragraph 7, Article 23 of the Law On LLC);
• exclusion of a Company participant from an LLC (Articles 10, paragraphs 4 and 4, paragraph 7, Article 23 of the Law On LLC);
• withdrawal of an LLC participant from the Company (clause 6.1 of Article 23, clause 1 of Article 26 of the Law On LLC);
• the participants object to the transfer of the share to the legal successors (heirs), liquidated or reorganized (deceased) participant (paragraphs 8 and 9 of Article 21 of the Law On LLC);
• violation of the prohibition on alienation of a share established by the Company's charter in the event of a corresponding claim by an LLC (paragraph 2, paragraph 2, paragraph 3, paragraph 18, Article 21, paragraph 4, paragraph 7, Article 23 of the Law On LLC).

The listed cases have a transactional or other legal nature by their legal nature, but are conditioned by the participant's desire to terminate corporate legal relations. At the same time, the legislator imposes obligations on the LLC, which must be implemented in accordance with the procedure and deadlines provided for by law due to the appearance of a share owned by the corporation. The LLC must pay the former participant the actual value, the amount of which corresponds to a part of the value of the LLC's net assets in proportion to the size of its share in the authorized capital ^{[24, p.7]}. The LLC receives a share of such a participant, which means that some civil relations arise.

The basis for the emergence of civil legal relations, a type of which are corporate, is understood as "the circumstances of reality, the presence of which is associated with the emergence, change or termination of legal relations" ^{[25, p.27]}. M. A. Rozhkova notes that "the only difference between legal facts and actual circumstances is that the former entail the onset of legal consequences, and the latter are not" ^{[26, p.18]}. S. Y. Filippova believes that for the dynamics of civil legal relations, the subjective perception of the circumstances of the actual reality by the subject of law is important ^{[27, p.67]}. It follows from the stated positions of scientists that the foundations of the dynamics of civil legal relations are not any life circumstances, but only those that are perceived by the subject and affect civil turnover by virtue of the rule of law or follow from it.

If for the first group of cases of the appearance of a share owned by an LLC, the basis is a bilateral and a reimbursable transaction, then for the second - two unilateral transactions, since there is no sign of reciprocity between them. The consequences in both cases are the same - corporate legal relations, both arising from the right of participation and binding between the company and the participant, are terminated.

III. Consequences of the occurrence of a share owned by an LLC

As a general rule, within a year after the appearance of the share owned by the company, it is obliged to sell it to other participants or third parties (Article 24 of the Law on LLC). Otherwise, the company must repay the share by reducing the authorized capital, which will negatively affect its business activities. The legislation provides for three options for the sale of the share owned by the company: its distribution among the remaining participants, sale and repayment by reducing the authorized capital. Each of these procedures is carried out on the basis of a decision of the supreme management body of the LLC and has a corporate character.

The distribution between the participants is made in proportion to their shares in the authorized capital and is allowed if the former participant contributed to the authorized capital at the institution (clause 3 of Article 24 of the Law on LLC). There is no counter-provision on the part of the participants, therefore, the distribution is the division of the right of participation of the former participant among all interested parties. The distributed share must be fully paid, otherwise it is implemented in a different manner (Resolution of the Arbitration Court of the Volga-Vyatka District dated 01/20/2023 No. F01-7952/2022 in case No. A82-2713/2022). Such a requirement of the legislator is due to the need to maintain a balance of interests of the remaining participants, since such a share is provided with a property equivalent – a contribution to the authorized capital. The features of this procedure are: urgent period, uniform distribution in accordance with proportionality and preventive nature. If consensus is not reached at the general meeting when making such a decision, then it is necessary to reduce the authorized capital. The distribution of the share owned by the company does not lead to the emergence of new contractual relations, and the existing ones do not change. The legitimate interests of the LLC are not affected, the property status of the corporation does not deteriorate, which makes the distribution a purely abstract phenomenon with the character of a legal fiction.

Further, the legislator uses the construction of an acquisition proposal, although it is a purchase and sale agreement between the company and a potential acquirer (clause 2 of Article 24 of the Law on LLC). Shares owned by the company are offered for purchase to participants or third parties, if such an opportunity is provided for in the constituent document. The share price under such a purchase and sale agreement must exceed or be equal to the nominal value, otherwise the transaction will be concluded on obviously unfavorable terms for the company (Resolution of the Arbitration Court of the North–Western District dated 30.01.2019 No. F07-16133/2018 in case No. A56-80498/2016). If the subject of the contract is the shares owned by the exiting participant, then the price is determined taking into account the actual value paid. Otherwise may be determined by a decision of the general meeting of participants (clause 4 of Article 24 of the Law on LLC). If the requirement for the minimum value of the share in the authorized capital is violated, then such a transaction will be declared invalid in accordance with the rules of Article 168 of the Civil Code of the Russian Federation (Resolution of the Arbitration Court of the North Caucasus District dated 12/28/2016 No. F08-9415/2016 in case No. A63-8883/2015). The rules of the share sale price are conditioned by the need to restore the financial and property condition of the company after payment of compensation ^{[28, p.67]}.

The legislator uses the construction of an acquisition proposal, although this does not happen. The company is not obliged to publish a relevant message or conduct any auction in the form of an auction. A potential acquirer of a share becomes a member of the corporation or a third party who is interested in obtaining the right to participate in such an unusual way. The purchase price will probably not exceed the nominal value of the share, so the interests of the company are vulnerable. There are no requirements for compliance with the real indicators of the corporation's fixed assets used in business activities. The beneficiary will be either a participant who acquires a share at an undervalued price, or a third party who pursues his economic interests. Nothing is changing for society, and there is no improvement in financial performance.

The third variant of the consequences of the appearance of a share owned by the Company is called repayment with a decrease in the authorized capital. To apply this procedure, two mandatory conditions must be met: a year has passed since the transfer of rights to the share to the Company, and the share has not been distributed or otherwise realized. Neither the participant of the company nor the OSU have the right to perform any other actions with such a share under the threat of their invalidity, and the tax inspectorate must refuse to register such decisions (Resolution of the Arbitration Court of the Ural District dated 02/01/2023 No. F09–9844/22 in case No. A07-3780/2021). Repayment with subsequent reduction of the authorized capital by the amount of the nominal value of the share affects the amount of validity of the value of the shares of the remaining participants. In the event of a dispute, the court will have the right to independently calculate the amount of compensation due to the unlawful inaction of the company, which violates reasonable expectations (Resolution of the First Arbitration Court of Appeal dated 07/05/2022 No. 01AP–3422/2022 in case No. A43-32785/2021). The one-year period is of a preventive nature, during which the second right to the emergence of a new or change in the existing contractual relationship between the participant and the company and related to the right of participation is valid. This rather long time period in the context of entrepreneurial activity and corporate legal relations can only be explained by the duration of the financial year.

Repayment of the share owned by the company leads to a simultaneous decrease in the authorized capital and an increase in the size of the shares of the participants, while maintaining their nominal value ^{[29, p.45]}. This procedure is similar to the distribution of consequences, but differs in the presence of an initial counter-provision. In fact, we are not talking about the consequences of the appearance of a share owned by the company, but about the second right to change the legal relationship of obligations. As already noted, the construction of the transfer or acquisition by the company of rights to a share in its authorized capital is a fiction and has an exclusively abstract character.

IV The final part

In the course of the conducted research, the following theoretical provisions were developed and constructed:

• The transaction for making a contribution to the authorized capital is reimbursable, since the participant receives the right to participate, and the company receives the property right. The result of the formation of the authorized capital is the emergence of corporate legal relations: binding between the company and the participant and related to the right of participation of the latter.
• Shares in the authorized capital are divided into two types, depending on the subject of ownership: the participant and the company. Information about the share in the authorized capital owned by a participant reflects its perpetual right to participate. The shares owned by the company do not grant it any rights, but impose on the supreme body the obligation to make certain decisions.
• The construction concerning the transfer or acquisition by the company of rights to a share in its authorized capital is a fiction and has an exclusively abstract character. The Company may acquire the right to a share in its own authorized capital on the basis of a decision of the general meeting or it may transfer to it as a result of certain legal facts (by analogy with an agreement in favor of a third party). The appearance of a share owned by the company does not entail corporate legal relations, and the contractual relationship between the participant and the company is terminated due to the coincidence of the debtor and the creditor in one person.
• The grounds for the company's rights to a share in its authorized capital are classified depending on the expression of will. For the first group, the basis is bilateral reimbursable transactions, for the second – two unilateral transactions, since there is no sign of reciprocity between them. In both cases, the consequences are the same - the corporate legal relations arising from the right of participation and binding between the company and the participant are terminated.
• There are three options for the sale of the share owned by the company: the division of the former participant's right of participation among the remaining ones, the sale to a predetermined buyer and the simultaneous repayment of the authorized capital with an increase in the size of the participants' shares while maintaining their nominal value.
• The consequences of the occurrence of a share owned by the company are of a second nature.