Starting a business in the IT sector in Belarus usually begins with bringing together several specialists or investors under one company. However, in practice, it is not always possible to maintain a balance of interests among members. Disagreements over development strategy, breach of obligations, or loss of trust can threaten not only business relationships but also the company’s very operations.
In such situations, the legislation of the Republic of Belarus provides for the possibility of excluding a member from the company. This is a legal procedure that requires solid grounds, strict adherence to corporate rules, and compliance with procedural norms. Mistakes can lead to court challenges and additional business risks.
For IT companies, the issue of exclusion is particularly important: the value of intangible assets code, know-how, and client databases is high, and reputation in the international market is crucial. Therefore, proper legal support during the process is essential.
This article explains the circumstances under which a member can be excluded from an IT company in Belarus, who has the right to initiate the process, which grounds are legally recognized, and what risks other founders should consider.
When Exclusion Becomes Necessary
In IT companies, as in any business, a key factor for success is the coordinated actions of the founders. In practice, however, it is not always possible to maintain balance and trust between partners. Excluding a member from the company is an extreme measure, used only when other methods of resolving conflict have been exhausted.
Common situations where exclusion may become necessary include:
- Breach of agreements: A member consistently fails to fulfill their obligations, such as contributing to the charter capital, participating in management, or following decisions made by the general meeting.
- Conflict of interest: A founder starts developing a competing project, poaching employees, or using company resources for personal purposes.
- Threat to business reputation: In the IT sector, image and client trust are critical. Actions by a member that undermine the company’s reputation can cause more harm than direct financial losses.
- Risks to assets: Protecting intellectual property is crucial. If a member obstructs the registration of rights to code, products, or the brand, or tries to transfer such assets to another entity, this threatens the company’s existence.
- Loss of trust and inability to collaborate: Even without direct legal violations, ongoing conflicts and obstruction of management decisions can make further cooperation impossible.
Thus, the need to exclude a member arises when their behavior threatens the stability of the business, the interests of other founders, and the company’s development.
When a Member Can Be Excluded
Excluding a member from a company is not a tool for resolving personal conflicts. It is an extreme measure applied only when a member’s actions or inaction genuinely obstruct the normal operation of the company. The exclusion procedure is conducted exclusively through the courts, and the initiators must provide evidence of specific violations.
It is important to note that disagreement with management decisions or strained relations between founders are not grounds for exclusion. The court considers only facts that demonstrate harm to the company’s interests.
Violations That May Lead to Member Exclusion
Violations that can justify the exclusion of a member include:
- Systematic failure to fulfill the duties assigned to the member, which hinders or makes the company’s operations impossible.
- Abuse of rights for personal gain to the detriment of the company’s interests.
- Actions (or inaction) that block the work of the company’s management bodies.
- Obstruction of the conclusion or execution of key transactions.
Practical Examples
- A member regularly misses general meetings, preventing the company from making decisions on important matters.
- Unjustified blocking of transactions necessary for the continuation of business operations.
- Disclosing confidential information to competitors.
- Using company resources for personal purposes, causing financial loss to the business.
- Creating debts and obligations that threaten the company’s financial stability.
Thus, excluding a member is possible only when there is serious and documented evidence that their behavior harms or threatens the company’s interests. Otherwise, the court will consider the claims unfounded.
Who Can Initiate Member Exclusion
The process can be initiated by other co-owners whose combined shares in the charter capital amount to at least 10%. The basis for filing a claim is a situation where the member’s behavior (action or inaction) obstructs normal company operations or involves gross violation of their duties.
The Role of Shares in the Charter Capital
In practice, exclusion is most often initiated by members with significant shares in the charter capital. The larger the share, the greater the procedural rights, including the right to file a lawsuit. However, owners of smaller shares can combine their stakes to reach the 10% threshold required to bring a claim. This collective approach demonstrates to the court that the issue with the uncooperative partner affects a significant part of the company, not just one co-owner.
Proving Member Misconduct
A mere opinion about a member’s misconduct is not sufficient evidence is key. Supporting materials may include:
- Minutes of general meetings showing that the member neglects their duties.
- Business correspondence.
- Documents proving obstruction of decisions or causing harm.
- Audit reports, financial statements, and other materials showing the negative impact of their actions.
Without proper evidence, even the majority agreement of the participants does not guarantee a successful claim, and the court may reject the exclusion.
Thus, the exclusion process can be initiated by individual co-owners or a group of IT company members. Success largely depends on the quality of evidence and legal support. To increase the chances of a positive outcome, it is recommended to involve lawyers specializing in corporate disputes.
Procedure for Excluding a Member
Excluding a co-owner from a company is not a quick step but a multi-stage process that requires careful legal and organizational preparation.
Collecting Evidence and Filing a Claim
The first step is gathering evidence showing that the member’s behavior interferes with the company’s operations or involves gross breaches of duty. Such materials include:
- Minutes of general meetings.
- Business correspondence.
- Audit reports and financial documents.
- Proof that the member’s actions or inaction actually obstruct the company’s operations.
Based on the collected evidence, a claim is prepared and filed with the economic court.
Court Consideration
The court carefully reviews the submitted materials, hears both parties, and verifies whether the member’s actions truly cause harm or threaten the normal operation of the company. It is important to remember that exclusion from the company is an extreme measure, applied by the court only in cases of serious and documented violations. If the evidence is convincing, the court will issue a decision to exclude the member.
Amendments to Founding Documents
Once the court decision comes into legal force, the company must amend its founding documents and charter: remove the information about the former member and redistribute their share. These changes must be officially registered. To register the amendments, the company submits an application, the amended charter the state fee to the registering authority. The former member’s share can be redistributed among the remaining members or sold to third parties if permitted by the charter provisions.
Specifics for IT Companies
In the information technology sector, excluding a company member involves particular nuances directly related to the nature of the business. Unlike traditional industries, the primary value often lies not in physical assets but in intellectual resources: code, software solutions, know-how, and the specialist team.
Risk of Code and Trade Secret Leakage
A member with access to internal developments may pose a risk to the company even after leaving. Leakage of source code, client databases, or technical documentation can cause damage comparable to losing the core product. This is why IT companies place special emphasis on non-disclosure agreements (NDAs) and the proper transfer of intellectual property rights.
Conflicts Related to Intellectual Property
Excluding a member may raise questions about ownership of the developments they created. If these matters are not clearly regulated in the charter or agreements with members, disputes can escalate into prolonged litigation. For IT companies, it is crucial to establish rules for allocating rights to software and other work results within the charter or agreements.
Impact on the Team and Clients
Excluding a member always affects the internal atmosphere of the company. In IT businesses, where a significant part of success depends on team cohesion and client trust, such conflicts are particularly sensitive. Team members may fear instability, and clients may lose confidence in the company’s reliability. Therefore, these processes require careful management to minimize reputational risks and ensure transparency for employees and clients.
Risks and Consequences for the Parties
Excluding a member from a company is not only a legal procedure but also a significant stress test for all parties involved. The process inevitably carries legal, financial, and reputational consequences, which must be considered in advance.
For the Excluded Member
The main risk for the excluded member is the loss of corporate rights and the ability to influence strategic company decisions. Additionally, they lose access to internal information and business resources. If their behavior involved breaching obligations, reputational damage may complicate future business activities or cooperation with other companies. At the same time, exclusion does not release the member from previously assumed obligations, such as guarantees or sureties under contracts.
For the Remaining Members and the Company
Key risks for the company and its co-owners include:
- The need to redistribute the excluded member’s share and amend the founding documents.
- Potential internal conflicts among remaining members, especially regarding redistribution of votes and shares.
- Temporary destabilization of management and processes, which may affect the team’s performance and client relations.
If the exclusion occurs within an IT company, there is an added risk of losing access to code or documentation that was under the excluded member’s control.
Possibility of Challenging the Decision
A court decision to exclude a member is not necessarily the end of the conflict; it can be appealed in an appellate or cassation court. In case of a challenge, the procedure may be prolonged, leaving the company in a state of uncertainty. Moreover, if the evidence was insufficiently prepared, there is a risk of the decision being overturned and the excluded member being reinstated.
Exclusion is therefore always a balance of interests. To minimize risks, all parties must prepare carefully, and the company should have mechanisms in place to protect its assets and reputation.
Conclusion
Excluding a member from an IT company is an extreme measure, applied in cases of serious violations or conflicts that hinder business development. The procedure requires a clear legal strategy, solid evidence, and competent support at every stage from preparing documents to amending founding papers. Mistakes or a purely formal approach can lead to court rejection and exacerbate the conflict.
To minimize risks and protect business interests, it is essential to entrust the process to professionals. Our team of lawyers can advise on member exclusion, help prepare the evidence and necessary documents, and represent your interests in court. We provide full procedural support and ensure the process is conducted as efficiently and safely as possible for the company.
How to contact us
For more information or consultations on issues related to excluding a member from an IT company in Belarus, do not hesitate to contact us. We are here to help and support you.
Phone and email communication options are available for your convenience:
- +375293664477 (WhatsApp/Telegram/Viber);
- info@spex.by.
