Through its 27 September 2016 decision
("Decision 27/2016"), the Constitutional
Court of Moldova ("Constitutional
Court") has declared certain provisions of the local
Law on Limited-Liability Companies ("Law
135/2007") unconstitutional. In particular, it ruled
that the operation of amendments to constitutive acts cannot
constitute a condition and impediment to an acquirer registering
its property right over a share stake in the State Register of
These events began in the court of first instance while an
inheritance matter was being reviewed. The claimant inherited a
share stake in a Moldovan limited-liability company from his
deceased mother. Shareholders in that limited-liability company
refused to pass, or delayed passing the resolution amending the
constitutive act that would allow the claimant to register himself
as a shareholder. As a consequence, the claimant's attorney
initiated a civil claim and raised the issue of constitutionality
before the court. This matter was then escalated to the
Constitutional Court for review by court of first instance.
It is worth mentioning that before Decision 27/2016, under Law
135/2007 all changes in constitutive documents of Moldovan
limited-liability companies (both in commercial / business and
private deals) had to comply with the following steps:
a legal act (eg authenticated
contract, inheritance certificate, etc.) on the basis of which a
share stake is transferred, was entered into or issued;
a shareholders' resolution needed
to be passed with an authenticated amendment to constitutive
the amendment of a new shareholder
into the State Register of Companies kept by the State Registration
Chamber had to be registered.
In the case at hand, the claimant claimed that the norms of Law
135/2007 imposing the resolution of shareholders amending
constitutive documents (as per b. above) as a precondition before
receiving state registration, constituted a limitation of a
person's property right guaranteed by the country's
Constitution. In addition, the claimant argued that the absence of
a shareholders' resolution bars the State Registration Chamber
from registering a person's property right.
Motivation of Constitutional Court
While taking the property right protected by the Constitution
into consideration, and taking into regard the fact that such
property right can be freely transferred both between persons and
through inheritance, the Constitutional Court concluded that two
formulations of Art.30 Law 135/2007 imposing the obligation to
operate the amendment to constitutive documents before state
registration, were unconstitutional.
The Constitutional Court rejected the claimant's allegations
that the wording in Law 135/2007, whereby the general assembly has
exclusive and sole power to amend constitutive documents, is
In connection with the Decision, the Constitutional Court
decided to also present a letter of recommendation to the Moldovan
Parliament requesting the Moldovan Parliament to property regulate
cases of registration of property right in various situations.
An acquirer can register its property
directly in the State Register of Companies without a
in commercial transactions, there
will be no need for a condition precedent for an exiting
shareholder to pass a resolution and ensure the acquirer's
registration before closing;
it remains unclear what will happen
with constitutive documents listing former shareholders, after a
new shareholder registers himself in the State Register of
Companies, and without changing the constitutive documents. After
all, until now it has been clear that the list of shareholders in
constitutive documents corresponds to the data from the State
Register of Companies, while all such information is public. At the
moment, information will remain public, only the lists of
shareholders in constitutive documents and the State Register of
Companies may differ; and
it is certain that cases where
managing directors (also other responsible persons) of
limited-liability companies, do not know when a change in
shareholding occurs, will increase.
The Constitutional Court has the power to declare norms
unconstitutional, but it cannot introduce / replace
unconstitutional provisions. It is certain that a less formal
approach is always welcome. However, in this case and until the
Parliament replaces the vacuum (properly regulating this issue) it
is certain that practical issues will arise, and so involved
persons are advised to proceed with caution.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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