In the case of single-member capital companies, i.e. those which have the same natural person as the sole shareholder and member of the statutory body, in practice we encounter a situation where no insurance is set up in case of the death of this person, so as to avoid paralysis of the company and to ensure the smooth continuation of its functioning.<\/p>\n\n
In the case of a legal successor of a deceased member of the statutory body, his successor does not become a member of the statutory body by law, as the performance of the function is of a personal nature and the performance of the function ends upon the death of the person. It cannot therefore pass by universal succession to the heir of the deceased member of the statutory body or to any other person<\/strong>. <\/p>\n\n In accordance with the law, it is necessary that the election of a new managing director (in the case of a limited liability company) takes place within 1 month and the election of a new member of the board of directors (in the case of an a.s.) within 2 months. This period runs from the moment of the death of the original member of the statutory body and it should be noted that within this period a new member of the statutory body must already have been elected. <\/p>\n\n However, in the case of a single-member company, it should be noted that the new statutory body should be elected by the sole shareholder or shareholder in the capacity of the general meeting – which will not be possible in the case under discussion. In such a case, according to the law, the new statutory body would have to be elected by the court, on the proposal of a person having a legal interest in the matter, and for the period until the new statutory body is duly elected. The person who may have a legal interest in the appointment of the statutory body may be, for example, a shareholder, a member of the supervisory board, a creditor or a debtor. However, if there is no such person, or no one files such a motion with the court, the court may appoint a guardian for the company; in the extreme case, the company may be dissolved and liquidated by the court. <\/p>\n\n In the case of a limited liability company, the articles of association of the company may address the situation whether or not the share in the company passes to the heirs, or the inheritance of the share may be excluded in the articles of association. However, this option does not apply to single-member companies in view of Section 14 of the Companies Act. When an LLC has only one owner, the provisions of the articles of association restricting or prohibiting the inheritance of the share are not taken into account and the share will always be inherited. The same will be the case with a public limited company where the articles of association cannot restrict or exclude the inheritance of shares, regardless of the number of shareholders. <\/p>\n\n If a share in the company is transferred according to the legal succession, i.e. when heirs are not designated during the lifetime of the testator, this may cause major problems in the functioning of the company.<\/strong><\/p>\n\n It is necessary to take into account that all heirs will act in the ordinary administration of the company until the entire succession proceedings have been settled, and if there are more than one heir. However, it is very often the case that these persons will not be able to find a consensus on any decision and the paralysis of the company will persist, and not only will it not be possible to elect a new member of the statutory body, there is unlikely to be a consensus on other key issues in the functioning of the company. <\/p>\n\n It is therefore advisable to put in place certain safeguards during the lifetime of the testator to avoid the above situations. It is of course possible to set up these safeguards as a precautionary measure already in relation to the statutory body of the company, but for the most part this means granting executive powers already during the lifetime of the testator, which is not often a desirable option. <\/p>\n\n It seems much more appropriate to set up a provision in relation to the share in the company whereby it is possible either (i) to define the ownership of the share in one of the arrangements for death <\/strong>(most often a will or a succession agreement) or (ii) to appoint a trustee of the estate<\/strong>. The administrator of the estate is called by the testator for the whole estate or, where applicable, for part of it. It is therefore possible to appoint such administration in respect of some or all of the shares owned by the testator. The appointment of the administrator of the estate requires the form of a public deed and, on the basis of this appointment, he is entitled to the ordinary administration of the company, i.e. in particular to exercise all the rights and obligations of a shareholder in the company, which includes, among other things, the selection and election of a new member of the company’s statutory body, and the conduct of business in relation to the company’s business partners or its employees. <\/p>\n\n Clients can therefore be strongly advised to take the above situation into account when conducting business through their single-member capital companies and to choose an appropriate solution that fits the circumstances and relationships within the company.<\/p>\n\n If you are interested in more information in this context, or for assistance in finding a suitable solution for your company, please do not hesitate to contact us.<\/p>\n\n This article is for informational purposes only and does not constitute legal advice or guidance for any particular case.<\/p>\n","protected":false},"excerpt":{"rendered":" In the case of single-member capital companies, i.e. those which have the same natural person as the sole shareholder and member of the statutory body, in practice we encounter a situation where no insurance is set up in case of the death of this person, so as to avoid paralysis of the company and to […]<\/p>\n","protected":false},"author":1,"featured_media":5519,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"footnotes":""},"categories":[320,487],"tags":[494,347,536,537,535,538],"class_list":["post-5989","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","category-corporate-agenda","tag-entrepreneurship","tag-law","tag-management-en-2","tag-risks","tag-single-member-company","tag-strategies"],"yoast_head":"\nThe issue of the death of a shareholder in a company<\/h5>\n\n
Options for introducing measures<\/h5>\n\n