ESSENCE AND FUNDAMENT PRINCIPES OF CORPORATE CONTROL WITHIN A LIMITED LIABILITY COMPANY

Abstract

The article examines the doctrinal understanding of corporate control and proposes to expand the understanding of this category by incorporating such features of influence as purposefulness, regulatory nature, and organization. It further emphasizes that corporate control is exercised and based on corporate legal principles, with the primary one being property participation in the company’s share capital, since the contribution of capital economically leads to the acquisition of corporate rights by a participant. In this regard, the issue of corporate control in a limited liability company with an unformed share capital is analyzed. The assertion that corporate control is proportional to the size of the share in the company’s share capital receives further support. The unpaid portion of a share in the share capital is not a subject of civil turnover and does not create control relations between such a participant and the company in the context of influencing the activities of such a legal entity. Participation in the management of the company should arise after the contribution to the company’s share capital has been made. Corporate control is analyzed within the context of the "piercing the corporate veil" doctrine. A participant’s influence on the company’s will can pose a risk to economic transactions, due to the limited liability they have for the company’s obligations. The participant’s influence should be matched by bearing all the risks associated with the company’s losses resulting from management decisions, including the potential for “piercing” into the participant’s personal assets. The article examines the impact of the company’s charter provisions, which grant additional rights to participants, on the degree of corporate control. Among these, particular importance is placed on provisions that determine the procedure for transferring shares to third parties, as they indicate the company’s internal exclusivity. It is proposed to understand corporate control as the targeted, organizing, and regulatory influence of a shareholder in the charter capital of a limited liability company when exercising their management rights. This influence is proportional to the size of the shareholder’s stake in the charter capital and focuses on the company’s business activities, the formation of its executive bodies, and the adoption of internal regulations by the participant, in accordance with Ukrainian legislation and the company’s relevant internal regulations.