The Legal Requirements for a Shareholder’s Exclusion from a Limited Liability Company According to Article 420 para. 3 of the Companies Act with a Special Reference to Issues Related to the Reimbursement of the Market Value for the Shares Held in the Company

The Companies Act provides that a shareholder can be excluded from a limited liability company if there is an important reason for his exclusion. Besides the existence of an important reason, such exclusion must also be a measure of last resort (ultima ratio) and the excluded shareholder must be reimbursed for the market value of the share it held in the company. The paper analyses and elaborates on these requirements but also emphasizes some of the issues that the existing regulation inadvertently creates with the rules on share capital maintenance and share capital contributions. It will be demonstrated that these rules can hinder or even disable the exclusion of a troublesome shareholder from the company thus preventing the attainment of the purpose of the rules relating to the shareholder’s exclusion. Therefore, specific de lege lata and de lege ferenda suggestions are provided to the Croatian legislator and the practitioners.