The basic principle of disposing of a share in a limited liability company is the freedom to transfer the share. However, this freedom is limited in a certain way by the letter of the law, and it can also be limited by the provisions of the founding act of the company.
I Legal right of pre-emption
In a situation where the owner of the share intends to dispose of his share in the company through a burdensome legal transaction, in such a way that the buyer of his share is a person who is not a member of the company, his freedom to dispose of the share is limited by the legal right of pre-emption – that is, the obligation to offer the share for purchase to all his to partners in the company under the same conditions as to a person who is a potential buyer of shares outside the circle of members of the specific company.
The transfer of shares to a person outside the circle of partners in the company can be made to third parties and in violation of the legal right of pre-emption, in which situation the fate of such a legal transaction depends on the will of other members of the company, whether they will protect their violated right in court proceedings. In a situation where there is an intention to protect the violated right of pre-emption, it is possible to enforce a judgment by which the said transfer would be annulled, and then ensure the acquisition of a specific share under the same conditions, according to which the acquirer acquired the said share.
II Restrictions on share disposal set by the founding act
Members of a limited liability company have complete freedom to arrange the disposal of shares in the company during the establishment or later in the process of amending the founding act in the direction of complete liberalization of the share disposal regime – by excluding the application of the provisions on the legal right of pre-emption or to additionally tighten the regime of the transfer of shares to third parties in another direction to persons outside society.
Some of the possibilities of simplifying the regime of transfer of shares in the company to third parties include:
– prescribing the obligation to give consent by the company for the transfer of shares to third parties;
– prescribing the right of forced redemption in favor of the company or the members of the company themselves in the event of the death of a member of the company;
– prescribing the obligation to give consent by all members in the company for the transfer of shares to third parties;
– prescribing a ban on pledging shares in the company, or prescribing mandatory consent of the company or members of the company for pledging shares in the company.
III Form of the contract on the transfer of shares
The share in the company is transferred by a contract in written form with certified signatures of the transferor and the acquirer. The sanction for non-compliance with the mandatory legal form of this contract is reflected in the nullity of the disposal in question, in connection with which it will not be possible to register the transfer of shares with the Agency for Economic Registers.
IV Registration of share transfer
The transfer of shares in the company until the moment of registration in the APR has an effect only between the members of the company who are participants in the mentioned legal transaction, while from the moment of its registration it also produces an effect towards all third parties.
In order to register this change in the Agency for Business Registers, it is necessary to: a) submit a data change application; b) submit the share transfer agreement with certified signatures of the acquirer and the transferor; c) submit the appropriate document on the basis of which the identity of the new member of the company is confirmed.
