In the first quarter of 2025, the Cassation Commercial Court of the Supreme Court made several significant conclusions in corporate disputes. These should be taken into account both in structuring corporate decisions and in forming legal strategies.
1. Minority shareholder in a squeeze-out
In case No. 910/8714/18 (decision of 03.02.2025), the court formulated a legal position regarding ways to protect the minority shareholder in the procedure of forced buyout of shares (squeeze-out).
The court confirmed the right of the minority shareholder to file a claim for fair compensation for the sale of his shares not only against the direct buyer of the shares, but also against affiliated persons and the ultimate beneficial owner. The doctrine of “lifting the corporate veil” was applied, stating that the defendants form a single economic group, the benefit of the transaction was received by the beneficiary, and therefore he should bear responsibility. This approach aims to ensure effective protection of shareholder rights and the actual enforcement of the court decision.
2. Consequences of alienation of a share without spousal consent
In the decision of 16.01.2025 (case No. 922/405/24), the court noted that a claim by one of the spouses to declare invalid a contract for the alienation of a share in an LLC concluded without his written consent is a proper way to protect rights. Such a contract violates the regime of joint ownership and may therefore be declared invalid. The court emphasized that the presence of written consent from the other spouse for the alienation of a share in an LLC, the charter capital of which was formed during the marriage, is a mandatory condition for the validity of the transaction, and its absence indicates a lack of authority to enter into such a contract. The assessment of the good faith of the acquirer should take into account not only the verification of information in the public register, but also the identification of the fact of the counterparty’s marriage, which is accessible through the State Register of Civil Status Acts and passport documents. The good faith of the acquirer is not an absolute guarantee of the preservation of rights if it was possible to learn about the existence of the marriage and the absence of consent.
3. Nature of the election of a member of the executive body
In the decision of 15.01.2025 (case No. 910/15094/23), it was emphasized that the election of a member of the executive body of a company is not covered by labor law regulation. The court concluded that such legal relations are corporate in nature, as they involve endowing a person with managerial powers by adopting a relevant decision by the authorized body of the company. The court stressed that entering into a contract with a member of the executive body of a company is a derivative action from the decision of the company’s management body, which does not automatically create labor legal relations. The presence of conditions in the contract similar to labor ones does not change its nature as a civil law transaction. Therefore, assessing the legality of such a contract should be done exclusively in accordance with the requirements of civil and corporate law.
4. Prohibition of management as a measure to secure a claim
In the decision of 20.01.2025 (case No. 910/8275/24), it was confirmed that suspending the resolution of the general meeting on the election of a director and prohibiting him from managing the company is not an admissible measure to secure a claim, as such intervention blocks economic activity, disrupts the balance of interests, and essentially duplicates the claim requirements. The court emphasized that securing a claim should not substitute mechanisms of corporate governance and should be justified, proportionate, and aimed at maintaining the status quo, rather than achieving the outcome of the dispute before the substantive decision is made.
5. Representation of a lawyer at general meetings
In the decision of 19.02.2025 (case No. 908/2596/23), it was concluded that to confirm the authority of a lawyer to represent the interests of an LLC participant at general meetings, a power of attorney must be provided, as this is a requirement of the company’s charter. An order for legal assistance is not a sufficient document for participation in meetings, as it does not confirm the specific authority of the lawyer to vote.
6. Determining court fees in a claim for a share
In the decision of 06.02.2025 in case No. 911/804/20, it is stated that a claim for determining the size of the statutory capital and recovery (requisition from possession) of a share in the statutory capital must have a monetary value expression regarding the size of the statutory capital and the share of the plaintiff. Such a claim is a property demand. Therefore, the court fee in such claims should be paid as for claims of a property nature.
7. Status of the ultimate beneficial owner
In the decision of 24.02.2025 (case No. 911/2662/2), the court finally answered the question of determining the ultimate beneficial owner.
This is a rather complex issue, which involved determining the UBO of a Ukrainian LLC, where its sole participant is a company registered under English law, and the sole participant of the latter is a Ukrainian citizen, who according to the plaintiff’s claims is its nominal participant.
The SCC emphasized that the status of the UBO is determined not by public registry data, but by the fact of exerting decisive influence on the legal entity, even through a chain of control or ownership. A person who manages the corporate rights of another person on his own behalf but in the interests of the latter is a nominal owner and cannot be considered the UBO. This is critically important for resolving the issue of true ownership of the share.
8. Payment of the share value upon exit
In case No. 924/751/20 (decision of 06.02.2025), the court considered a dispute regarding the recovery from the company of the value of a participant’s share who exited the founders’ group. The key issue was to determine the amount of the paid-up share in the company’s statutory capital. The court emphasized that the right to receive the value of the share upon exit from an LLC arises only if it has been fully paid. If the share was contributed partially, the payment is made proportionally to the amount paid. Therefore, the fact of the participant’s contribution to the statutory capital is crucial for the accrual and payment of its value upon exit from the company. Information from the Unified State Register regarding the capital structure is considered reliable until proven otherwise.
Thus, in the first quarter of 2025, the SCC confirmed the stability of positions on a number of corporate issues. The court consistently upholds the balance between the rights of participants and the protection of the company as a legal entity. For practicing lawyers, this is an opportunity not only to win cases but also to prevent conflicts at the document preparation stage.
Sergiy Lysenko
Deputy Chairman of the NAU Committee on Business and Investor Protection