The Right of Partners or Shareholders to Demand Withdrawal from a Company – A Proposal for a New Right
On December 3, 2025, the Civil Law Codification Commission adopted a draft amendment to the Commercial Companies Code. In addition to proposing new, framework regulations for group companies, the draft also provides for the introduction of a new instrument to protect partners and shareholders—the right to demand withdrawal from the company.
This solution responds to long-standing calls in legal doctrine and practice for the creation of an effective mechanism for exiting a capital company in the event of a deep and persistent corporate conflict.
New Rights of Partners (Shareholders)
The draft proposes granting partners in limited liability companies and shareholders of non-public joint-stock companies the right to file a lawsuit seeking withdrawal from the company. If the lawsuit is granted, the court orders the company to repurchase the shares at a price corresponding to their fair value.
The drafters were inspired by the existing provisions regarding a simple joint-stock company, which provide for a similar mechanism for a shareholder’s exit from the company.
The proposed solution is also linked to the proposed regulation of group of companies law, which provides for a separate, so-called “group” right of withdrawal available to shareholders of subsidiaries.
Objectives of the Proposed Regulation
The proposed provisions are intended to fill a systemic gap in the current legal framework. The existing provisions of the Commercial Companies Code do not provide for a general mechanism enabling a partner or shareholder to exit a capital company in the event of a persistent corporate conflict.
In practice, partners (shareholders) in dispute with the majority currently have only a limited range of legal remedies at their disposal, such as:
- an action to dissolve the company,
- challenging resolutions of the governing bodies,
- exercising individual control rights,
- and demanding a mandatory buyout (sell-out) in joint-stock companies.
However, these instruments often prove insufficient in situations of prolonged conflict between partners (shareholders).
The new right granted to partners and shareholders will also apply in situations where the group of companies to which a given company belongs decides to opt out of the application of holding company law. This is because the right to bring a non-group-related action cannot be excluded in any way. Consequently, partners and shareholders of subsidiaries retain guaranteed protection regardless of whether the group of companies operates under the holding company law regime.
Exercising the Right to Demand Withdrawal
An action for withdrawal from the company may be brought if there is a valid cause justified by the relations between the partners (shareholders) or between a partner (shareholder) and the company, which leads to grossly unfair treatment of the withdrawing partner.
The action is brought against:
- the company; and
- all remaining partners (shareholders).
If the action is granted, the shares of the withdrawing partner (shareholder) are subject to redemption at a price corresponding to their fair market value, as determined by the court as of the date of service of the complaint.
The draft also provides for the possibility that the court may take into account the value that the shares would have had had the partner (shareholder) not suffered gross unfairness.
If the claim is upheld, the redemption of the shares is carried out by the company acting on behalf of the remaining partners (shareholders), in proportion to the number of shares they hold, with the company and the remaining partners (shareholders) being jointly and severally liable for payment of the redemption price. Legal doctrine regarding a similar mechanism in a simple joint-stock company (Art. 300⁵⁰ of the Commercial Companies Code) indicates that a buyout by the company “on behalf of the shareholders” is of a technical nature—the company acts as the entity executing the court’s judgment, while the economic burden of the buyout is borne by the remaining shareholders. At the same time, the provisions do not clearly specify the timing and manner of the transfer of share rights—it is unclear whether this occurs directly pursuant to the judgment or requires the conclusion of a separate agreement after the company has made the buyout.
A similar ambiguity may also arise in the proposed group buyout mechanism. The draft does not expressly resolve this issue, limiting itself to stating that the buyout is carried out by the company acting on behalf of the remaining partners.
Consequences of Introducing the New Protective Mechanism
The proposed solution may significantly alter the bargaining position of minority partners and shareholders. The introduction of a judicial mechanism for exiting a company may limit situations in which partners (shareholders) are forced to sell their shares at prices significantly deviating from their actual economic value.
From the perspective of companies and majority partners and shareholders, however, the new regulations also entail significant legal and financial consequences, particularly in the context of potential litigation regarding the grounds for withdrawal from the company and the determination of the fair value of shares.
Practical Risks
The introduction of the new mechanism may significantly impact the operational practices of corporations.
The new regulations may lead to corporate disputes regarding the grounds of “good cause” justifying a partner’s (shareholder’s) withdrawal from the company. This concept is a catch-all clause, and its application will largely be shaped by judicial precedent.
The proposed right of withdrawal may also, in practice, serve as a supplementary mechanism to those already provided for in the Commercial Companies Code for resolving serious corporate disputes, such as an action for the dissolution of the company or an action for the exclusion of a partner.
Summary
The proposed amendment to the Commercial Companies Code introduces a new mechanism for protecting partners and shareholders in the form of the right to demand withdrawal from the company. This solution may significantly strengthen the position of minority partners and shareholders in situations of corporate conflict.
At the same time, the proposed regulations may give rise to new legal issues and disputes arising, for example, from the lack of regulation regarding the timing and manner of the transfer of ownership rights following the exercise of the right to withdraw.
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