Whether you are buying or selling a business share in an s.r.o. company, this article is for you. You will find essential information and tips on what to consider when acquiring or divesting a business share.
If you are acquiring a business share in an s.r.o., we recommend that you request the following information and documents from the transferor:
Demand that the transferor provide guarantees and declarations of the company's absolute legal and accounting integrity in the business share transfer agreement, under penalty of damages. It is also standard practice to obtain certificates of no outstanding debts from the tax office, Social Security, and health insurance companies.
Request the preparation of financial statements as of the date of signing the transfer documentation. It is standard practice for the seller to provide the buyer with all relevant and important accounting documents of the company for review and "audit." The most fundamental accounting documents that will illustrate the company's current financial status include, for example, the general ledger and the financial statements. Financial statements are also typically included as an appendix to the business share transfer agreement, serving as a basis for the contracting parties during the transfer.
Transfer documentation is a fundamental pillar when selling a business share in an s.r.o. For a successful transfer of an s.r.o. business share, the following documents will be required:
A Share Transfer Agreement establishes a contractual legal relationship between the transferring partner and the acquirer, who may be either an existing partner or a third party external to the company (an "extraneus"). The legal relationship arising from this agreement is governed by Section 261, Paragraph 3 of Act No. 513/1991 Coll., the Commercial Code, making it an absolute commercial relationship. As a specific contract type, it is regulated by Section 115 of the Commercial Code and the general provisions of Sections 261 – 408 of the Commercial Code. In cases where the Commercial Code's provisions are insufficient, the general provisions of Act No. 40/1964 Coll., the Civil Code, as amended, shall apply in accordance with Section 1, Paragraph 2 of the Commercial Code.
The agreement must be in writing with officially certified signatures of the contracting parties. A further specific requirement for this type of contract is a declaration by the acquirer of the business share confirming their accession to the company's articles of association. For clarity, the subject of the transfer must also be unambiguously defined in the agreement. Failure to comply with the aforementioned mandatory requirements should result in the absolute invalidity of the share transfer agreement as a whole.
The declaration of accession to the articles of association is only required when transferring a business share to an individual outside the company. The same applies to a single-member company, where the acquirer is also obliged to accede to the memorandum of association. A crucial element of the share transfer agreement is specifying whether the transfer is for consideration or gratuitous. The absence of these provisions will result in the absolute invalidity of the agreement.
NOTE: The minimum capital contribution for a partner in an s.r.o. company is legally set at EUR 750.
TIP: Insist that all declarations regarding the company's debt-free and problem-free status, as mentioned in point 1, are incorporated into the share transfer agreement within the declarations section for both the transferor and the acquirer. We recommend supporting these declarations with appendices to the share transfer agreement in the form of the company's accounting documentation, such as the company's general ledger or financial statements prepared as of the date of signing the share transfer agreement, which will document the company's financial condition as of the date of signing the transfer documentation.
A crucial step in the purchase or sale of a company is the handover and takeover of all accounting and corporate documentation for the acquired entity. In business, it is presumed that a limited liability company maintains proper accounting records and other documentation.
A handover protocol is a document confirming that the acquirer of a business share in the company, on the day of signing the share transfer agreement, took over the documentation specified in the protocol:
By signing the handover protocol, both parties to this transaction will have certainty that the documents listed in the protocol have been handed over and received. We recommend having the authenticity of the signatures on the handover protocol certified by a notary.
An important step in the transfer of a business share is to check for any restrictions on its transferability. Section 115 of Act No. 513/1991 Coll. contains provisions on the restriction of transferability of business shares. According to this provision:
The provisions of the Commercial Code governing the transfer of business shares are dispositive, which in practice means that partners can agree on different legal arrangements for the transfer of a business share.
A partner cannot transfer their business share to another partner or another person if they are listed as an obligor in the register of issued authorizations for enforcement proceedings according to a special law. The same applies to the transferee of the business share.
ATTENTION – important change: Effective from July 17, 2022, when transferring a business share from one partner to another partner tax arrears are no longer examined. For this reason, in such a transfer, it is not necessary to attach the tax administrator's consent or an affidavit stating that the person has no tax arrears to the proposal for registration of changes.
The rule regarding the tax administrator's consent still applies only in the case of the transfer of a majority business share. If, in such a case, the partner or transferee is listed in the register of tax debtors according to a special regulation, the company must submit the so-called tax administrator's consent to the transfer of the business share to the commercial register. Therefore, it is advisable to check for tax arrears for both parties to the transaction in advance.
Following the amendment to the Commercial Code on October 1, 2012, you only become a company partner upon the registration of the change of partner in the Commercial Register. This registration has a constitutive effect. The process of registering a change in an Ltd. company in the Commercial Register is complex.
The application for registration of a change in registered data in the Commercial Register is submitted by the company exclusively electronically via the portal www.slovensko.sk. To do this, you must first correctly complete the change form – form no. 8. The form must be signed with the applicant's electronic signature.
The attachments to the application include:
The court fee for submitting the application for registration of the change is EUR 50. (increased from the original EUR 33, effective April 1, 2024). The registration court will register the change within two working days of submitting the application, provided the application was submitted with all required attachments and without errors. The deadline only begins upon receipt of a complete and error-free application.
When transferring a business share, the new owner often also changes the company's registered office, its trade name, or expands its scope of business. These company changes entail notification obligations, under threat of penalty for non-compliance, to the tax administrator, the trade licensing office, and potentially the Social and Health Insurance companies. Therefore, remember that the relevant changes must be reported.
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