Comparative Analysis of Preemptive Rights in Georgian and Ukrainian LLCs – A Statutory Rule or A Contractual Privilege

  • Ana Tokhadze
Keywords: Preemptive rights in LLCs, Georgian and Ukrainian regulations., shareholders’ protection.

Abstract

To date, the protection of shareholders’ property rights has been greatly argued. Recently, Ukraine and Georgia have undertaken vast legislative amendments in respect to the LLCs. Legislative revisions have had a significant impact on the exercise of the shareholders’ preemptive right, which at present is executed under the meticulous procedural provisions. The premise of the paper is to bridge between Georgian/Ukrainian legislative novelties; hence, to expose coherent lapses with respect to the equal and fair treatment of the shareholders. By the same token, thesis endeavors to understanding the essence of the preemptive rights from the perspective of the shareholders as well as the company. An exclusion of the preemptive right is also reasoned. The paper gives concluding remarks on building the credible police in favor of shareholders’ enjoyment of preemptive rights.

References

1. Magnier, V. (2017). Comparative Corporate Governance. UK: Edward Elgar (pp. 15-18, 113-118).
2. Yan, W. (2017). The Role of Representatives of Minority Shareholders in the System of Corporate Governance. Frankfurt am Mein: Peter Lang GmbH (pp. 1-6);
3. Hill, J. G. (2015). Images of Shareholder – shareholder power ad shareholder powerlessness. In J. G. Hill & R. S. Thomas (Eds.), Research Handbook on Shareholder Power (pp. 53-54, 61-68). UK: Edward Elgar.
4. Bratton W. W. (2017). Corporate Law Reform in the Era of Shareholder Empowerment. In B. Choudhury & M. Petrin (Eds.), Understanding the Company (pp. 253-265). UK, Cambridge: Cambridge University Press.
5. Directive 2017/828 of the European Parliament and of the Council amending Directive 2007/36/EC as regards the Encouragement of Long-term Shareholder Engagement.
6. Law of Ukraine, “Limited Liability Companies and Additional Liability Companies” of 2018. Supreme Council of Ukraine, data N.13.
7. Amendments to the Georgian “Law on Entrepreneurs” of 2017. Georgian Parliament, data N.812-II.
8. Bachmann, G., Eidenmüller, H., Fleischer, H., Schön, W. (2014). Regulating Closed Corporation. Germany: De Gruyter (pp. 197-199).
9. Digman, A. (2011). Company Law, Hicks & Goo’s Cases & Materials (7th ed.). US, NY: Oxford University Press (pp. 277-278).
10. Ventoruzzo, M. (2013). Issuing new shares and preemptive rights: a comparative analysis. Richmond Journal of Global Law & Business 12(4), pp. 520-522.
11. French, D., Mayson, St., Ryan, Ch. (2017). Mayson, French & Ryan on Company Law (34th ed.). GB: Bell & Bain (pp. 3, 5-9).
12. Wirth, G., Arnold, M., Greene M. (2004). Corporate Law in Germany. München: H.C. Beck Verlag (pp. 24-25).
13. Davies, P. (2002). Introduction to Company Law. US, NY: Oxford University Press (pp. 2-24).
14. Bachmann, G., Eidenmüller, H., Fleischer, H., Schön, W. (2014). Regulating Closed Corporation. Germany: De Gruyter (pp. 5-8).
15. Burduli, I., Makharoblishvili, G., Egnatashvili, D., Giguashvili, G. (2016). Development of Contemporary Georgian Corporate Law. Georgia, Tbilisi: World of Lawyers (pp. 1-10).
16. Upon the Association Agreements between European Union and Ukraine, as well as, Georgia.
17. Bainbridge, St. (2014). Business Agencies, Partnership & LLCs (2nd ed.). US: Foundation Press (pp. 223-225).
18. Georgian “Law on Entrepreneurs” (2018). Sec. 461 (8).
19. Ukrainian Law, “Limited Liability Companies and Additional Liability Companies” (2018). Sec. 20.6.
20. Ukrainian Law, “Limited Liability Companies and Additional Liability Companies” (2018). Sec. 20.6.
21. “The relevant provisions may be introduced into the statute, amended or excluded from it by unanimous decision of the general meeting of participants, which was attended by all members of the company.” Ukrainian Law, “Limited Liability Companies and Additional Liability Companies” (2018). Sec. 20.6.
22. Georgian “Law on Entrepreneurs” (2018). Sec. 461 2; 3; 6; 7.
23. Ukrainian Law, “Limited Liability Companies and Additional Liability Companies” (2018). Sec. 20.3.
24. Georgian “Law on Entrepreneurs” (2018). Sec. Sec. 461 2;
25. Ukrainian Law, “Limited Liability Companies and Additional Liability Companies” (2018). Sec. 20.3.
26. Bainbridge, St. (2014). Business Agencies, Partnership & LLCs (2nd ed.). US: Foundation Press (p. 225).
27. Wirth, G., Arnold, M., Greene M. (2004). Corporate Law in Germany. München: H.C. Beck Verlag (p.154).
28.Wirth, G., Arnold, M., Greene M. (2004). Corporate Law in Germany. München: H.C. Beck Verlag (p.155).
29. Ukrainian Law, “Limited Liability Companies and Additional Liability Companies” (2018). Sec. 22.2;
Published
2019-06-24
Section
Articles