Exclusion of a Partner in an LLC in North Macedonia – Complete Guide

Every limited liability company (LLC) is founded on a shared goal – profitable and sustainable business. Yet, not all partnerships are harmonious. Conflicts, mistrust, failure to fulfill obligations, or even disloyal actions can lead to a situation where the remaining partners wish to exclude one of their members.

The exclusion of a partner is a legal mechanism under the Macedonian Company Law (Zakon za trgovski drushtva – ZTD) which allows the protection of the company and the other partners from harmful behavior.

This guide explains the legal basis, grounds, procedure, consequences, and practical aspects of partner exclusion in an LLC in North Macedonia.

Contractual Exclusion (Article 208, para. 1 ZTD)

The LLC Agreement (Articles of Association) may stipulate in advance that a partner can be excluded. In that case, the agreement must clearly define:

• conditions for exclusion,
• procedure, and
• consequences of exclusion.

If these are not validly determined, the possibility of contractual exclusion does not exist

Judicial Exclusion

The law also provides for judicial exclusion. Any partner, or the company itself, may file a lawsuit to exclude another partner if there are “justified reasons.”

1. The partner caused damage to the company or to another partner, or his/her continued participation would cause damage.
2. The partner acts contrary to the resolutions of the partners’ meeting.
3. The partner does not participate in management, thereby obstructing normal operations.
4. The partner intentionally or grossly violates provisions of the Articles of Association.
5. The partner otherwise fails to fulfill obligations under the company agreement.

• A lawsuit must be filed within 90 days from learning of the reason,
• but not later than one year from its occurrence.

A partner cannot waive the right to request exclusion in advance.

1. Internal Decision

If the company agreement provides for exclusion, the partners’ meeting can adopt a resolution to exclude a partner.

2. Court Procedure

If there is no clause in the agreement or the partner opposes the exclusion, the matter proceeds to court:

• Filing of a lawsuit,
• Presentation of evidence (minutes, correspondence, audits),

Court judgment on whether justified reasons exist

Termination of Partnership

Exclusion terminates the partnership relation and all rights arising from it.

Right to Compensation

The excluded partner has the right to compensation of his/her share:

• based on the market value at the time of exclusion,
• in case of non-cash contributions, the return is possible only if stipulated or if other partners agree.

Limitations

• No compensation if the contribution was destroyed through regular use or accidental damage.
• The company may withhold payment until the partner fulfills any outstanding obligations and compensates for damages caused.

Valuation of the Share

• Partners and company may agree amicably,
• If not, the court appoints a certified evaluator.

The partnership relation ends only after compensation has been paid.

1. Partner engaging in disloyal competition – opened a parallel company, redirecting clients.
2. Partner blocking decisions – refuses to vote on crucial matters, obstructing operations.
3. Partner not fulfilling contribution – promised equipment as a non-cash contribution, but never delivered.

• Shareholders’ Agreement: defines mechanisms for exclusion, buy-out of shares, mediation.
• Clear obligations: precisely stated in the LLC Agreement.
• Mediation and arbitration: faster and cheaper alternatives before going to court.

Excluding a partner from an LLC is a serious but sometimes necessary step. It protects the company and the remaining partners from harmful behavior.

Macedonian Company Law provides clear rules on grounds, procedure, and consequences, ensuring legal certainty and fair balance among interests.

Recommendation: before initiating exclusion, always seek legal advice from a lawyer specialized in corporate law in North Macedonia