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This Newsletter article will evaluate the termination of a limited
liability company by just cause, bearing in mind both the termination
by just cause under the fTCC and the novelties introduced by the TCC.
Termination by Just Cause under the fTCC and the TCC
fTCC Provisions
Art. 549 fTCC foresaw causes for termination of limited liability
companies. One of the causes for termination is a court order for ter-
mination upon request of one of its shareholders in the presence of just
causes.
Bearing in mind the exit rights regulated under Art. 551 fTCC, if
there is just cause, a shareholder of a limited liability company had the
right to request either the exercise of their right to exit the company4,
or the termination of the company by just cause.
Material Novelty Introduced under the TCC
The TCC regulates termination of a limited liability company by
just cause in Art. 636. Similar to the provisions of Art. 549 fTCC, the
TCC grants every shareholder in a limited liability company the right
to file a lawsuit for the termination of that company in the presence of
just causes.
Notwithstanding, Art. 636/3 introduces a material novelty: the
judge of the court, before which the termination lawsuit is filed, may
rule for the squeeze out of the claimant shareholder or for another solu-
tion which is acceptable and suitable for the specificities of the present
case.
Had the fTCC included such a provision, it could have prevented
the prevailing practice of ordering the termination of the company,
which was mandatory for limited liability companies with two share-
70 NEWSLETTER 2014
4 Please see Ercument Erdem, Withdrawal and Expulsion from Limited Liability Companies
(“LLC”) Incorporated by Two Shareholders (Newsletter Article of July 2014)
companies-llc-incorporated-by-two-shareholders/ (accessed on 8 October 2014) for squeeze out
(expulsion) and exit in limited liability companies with two shareholders under the fTCC and
the TCC.