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New Rules on Admission of Heirs in LLCs and of Registration of Transfer of Shares in LLCs


Admission of the Heir of a Deceased Shareholder

An amendment enacted in July 2017 to the Moldovan Law on Limited Liability Companies (LLC) changes the rules of admission of heirs of a shareholder into the company after the Constitutional Court has invalidated certain provisions of the LLC Law by its Decision no. 27 dated 27 September 2016.  

Under the new rules an heir becomes shareholder of the LLC as of its entry into the State Registry of Legal Persons based on the certificate of inheritance alone.  The requirement to secure the consent of the other shareholders in the LLC and to amend the List of Shareholders in the charter of the LLC no longer applies. 

Shareholders are allowed to establish a veto to the admission of an heir in lieu of the deceased shareholder.  This requires the amendment of the charter and inclusion of a clear language to that effect. 

If such a veto right was included in the Charter at the time of death of a shareholder, a resolution of the shareholders that the heir is admitted as a shareholder shall be required.  If such resolution is denied, any shareholder or the LLC are bound to acquire the shares from the heir at a price equal to the highest of: (i) the price offered by a shareholder or by the LCC; and (ii) the price determined based on the net asset value (NAV) of the LLC as at the time when the heir submitted evidence of its inheritance right. 

The NAV shall be confirmed by an auditor or, if the parties so agree, by a valuator.  The valuation costs shall be borne by the LLC. 

Notwithstanding the foregoing, if the shareholders and the company failed to purchase the shares from the heir within 3 months as of the time when the heir submitted evidence of its inheritance right, the veto right lapses and the heir becomes shareholder in the LLC. 

Thus, investors that have an LLC joint venture with an individual in Moldova have the option to amend the charters of their LLC and specify that heirs of shareholders who are individuals will not be admitted as shareholders in the LCC after the death of that shareholder.  Rather, the right of veto shall be applied. 

These rules do not cover shares in joint stock companies. 


Registration of any Transfer of Shares in LLCs

A second significant amendment is the repeal of the rule that an acquirer of shares in a LLC shall be entered in the State Register of Legal Persons based on the resolution of the general meeting of shareholders of the LLC which amends the List of Shareholders contained in the charter of the LLC. 

Under the new regime such a resolution shall not be needed, and the acquirer will apply for entry of its title to the shares in the LLC based on the contract or other legal ground of its acquisition. 

We remind that under Moldovan law shareholders enjoy a right of first refusal upon sale by a shareholder of its shares in the limited liability company.  The new rules do not affect this right, which continues to be in effect.