Social Transmission of Units in Limited Liability Companies
The Limited Liability Company (LSL) is concerned with the seat of shares, especially the system of transmission. The fundamental problem is the regulation of membership changes due to the hybrid nature of the SL. Thus, despite its significant capitalist component, its status as a “closed society” reflects the natural tendency to limit the transferability of shares.
The system of transmission of shares differs depending on whether it’s an inter vivos transfer (voluntary or forced) or mortis causa.
– Voluntary Inter Vivos Transfers
Members can regulate the statutes for voluntary inter vivos transfer of shares, while the LSL imposes limits. In the absence of statutory regulation, the provisions of the LSL apply. Therefore, we can distinguish between the regime of inter vivos transfer with statutory regulation and without statutory regulation (established by the LSL).
a) Inter Vivos Transfers with Statutory Regulation
The LSL model allows partners to establish, rather freely, the system of inter vivos transfer of shares in the statutes, but with the following limits:
- Statutory clauses that allow free transfer to third parties outside the company are void, except if the purchaser is the spouse, parent, or descendant of the partner, or if it’s for companies in the same group. This prohibition reflects the legislative intent to maintain the personal vocation in the SL.
- Only valid clauses forbidding the voluntary transfer of shares are those where the statutes recognize the right of the partner to separate from the company at any time. The incorporation of these clauses into the statutes requires the consent of all partners. However, the statutes may prohibit the voluntary transfer or exercise the right of separation for a period not exceeding 5 years after the creation or increase of capital.
- It’s forbidden to impose on the partner who wants to transfer the acceptance of a transaction with a different number of shares than they intended to transfer.
b) Inter Vivos Transfers without Statutory Regulation
In the absence of statutory regulation, the LSL establishes the following procedure for the voluntary transfer of shares:
- Notification to the company: The partner must notify the administrators of their desire to transfer, indicating the number of shares they intend to transfer, the name of the purchaser, the price (if there’s consideration), and other conditions for transmission.
- Consent of the Board: Administrators will submit the matter to the General Meeting to be held within three months following receipt of the communication. The Board may reach an agreement by an ordinary majority (one-third of votes validly cast) to approve the transfer or, conversely, to refuse it. They can only deny the transfer if there is a person/s ready to acquire all the shares offered. It’s important to note that the shareholders attending the Board will be given preference to acquire the shares, provided that the agreement does not permit the transmission by majority. Furthermore, when there are several partners who want to purchase and the shares offered are not enough, the LSL provides for their distribution in proportion to their participation.
- Communication to the transferor partner: In any case, the result of the Board’s deliberation must be conveyed to the transferring partner if they were not involved in it. From that date, they should formalize the sale within one month. Three months after the request without comment from the administrators of the board, or the same period from the communication of the buyer’s name to the transferring partner, the partner will be free to transmit the shares to others.
– Forced Inter Vivos Transfers
This case is linked to the transfer of shares in judicial or administrative proceedings where, to meet the obligations of the partner, their shares are sold at auction. To enable the disposition but prevent the entry of strangers into the company, a right of first refusal is articulated for the rest of the members and the company itself. Thus, members may purchase the shares within one month from the receipt by the company of the auction record for the award or agreement of the shares, substituting the sender or, if necessary, by awarding the claimant and covering all costs incurred. If the subrogation is exercised by several partners, the shares are distributed among them in proportion to their shareholdings.
– Mortis Causa Transfer
The rule provides that the heir or legatee acquires membership. However, it admits the possibility that the statutes provide a right of first refusal for the shares of the deceased partner, based on the real value they might have on the day of the partner’s death, with the price paid in cash.