Withdrawal of a partner from a limited liability company (LLC) when the company would then hold more than 35% of the share capital

Facts

B. GmbH (respondent company) is a limited liability company with a share capital of CHF 20,000.- divided into 20 shares with a nominal value of CHF 1,000.- each. A. (appellant) holds 9 shares (i.e. 45% of the share capital). The other partners are C. (1 share) and the manager D. (10 shares). On 20 January 2020, A. filed an action for withdrawal with the District Court of Arbon, requesting to be authorised to withdraw from the company for the real value of his participation, set by the court at a minimum of CHF 4,500.-. The District Court dismissed the request. A. appealed against this decision to the Cantonal Court of Thurgau, which also dismissed the appeal. The DFC dismisses the civil appeal filed by A.

Considerations

1. The disputed and decisive issue is how the right of withdrawal (Art. 822 CO) of a partner holding more than 35% of the share capital is reconciled with the rules on the company's acquisition of its own shares, in particular the 35% limit (Art. 783(2) CO). 2. During the revision of the LLC law that entered into force on 1 January 2008, the legislator introduced provisions on the right of withdrawal and exclusion of partners, as well as on the compensation of the withdrawing partner (Art. 822 to 825a CO). 3. The lower instances acknowledged the existence of a just cause for withdrawal within the meaning of Art. 822(1) CO, but considered that the withdrawal of the appellant was not legally feasible, as it would have led the company to hold own shares with a nominal value exceeding 35% of the share capital, which is prohibited by Art. 783(2) CO. 4. The appellant argues that the right of withdrawal for just cause is an imperative and inalienable right of each partner, which is not linked to a certain percentage of participation. The search for a successor or the reduction of the share capital would be a matter of compensation under Art. 825a CO. 5. Doctrine has not yet provided a solution to this issue. Some authors propose to empower the court to set a deadline for the company to take over the shares of the partner wishing to withdraw and, failing that, to order the liquidation of the company. 6. 6.1 By setting the 35% limit of the share capital for the company's acquisition of its own shares (Art. 783(2) CO), the legislator sought to reconcile the flexibility of…