In today's post, we will discuss a topic that seems simple at first glance, but in practice it often turns out to cause many problems, doubts and ambiguities.

So what is necessary to properly and efficiently sell shares in a limited liability company?

First, the buyer should review the company's articles of association. This is important because the articles of association may contain provisions restricting the transfer of shares. For example, they may stipulate the right of priority for other shareholders or require the company's consent for a shareholder to transfer shares. Similar restrictions may also be included in the investment agreement, which is often signed in larger share transactions. It is also important to check whether the seller has signed any lock-up agreements, i.e., restricting the transfer of shares.

If the transfer of shares is not restricted, the parties may sign a sales agreement.

It's important to remember that, as a rule, a share purchase agreement in a limited liability company must be in writing with signatures certified by a notary to be valid. The exception, where a notary's presence is not required, is when selling shares in a company whose agreement was concluded using a template agreement. In such cases, the shareholder can also sell shares using a template available in the IT system.

The share purchase agreement should contain at least the following provisions:

• designation of the parties to the agreement,
• subject of the agreement,
• number of shares being the subject of the transfer,
• nominal price of the share,
• price for the shares and the terms and deadline for its payment,
• indication of the moment of transfer of ownership of the shares.

Of course, it is worth ensuring that the contract, in addition to the above, contains additional arrangements and declarations of the parties, such as, for example, the seller's confirmation that the shares are free from third-party claims and that he can freely dispose of them, the buyer's declaration that he has familiarized himself with the company's documentation, and additional terms of sale.

After concluding the agreement, the parties should notify the company of such a transaction. Therefore, it is advisable to prepare at least three copies of the agreement, one of which should be submitted to the company. Upon receiving this information, the company will be entitled to submit an application to amend its entry in the National Court Register. Importantly, however, in the case of a share sale, this entry is declaratory in nature, thus serving as confirmation of the sale.

The parties to the transaction must also remember that the sale of shares triggers the obligation to pay personal income tax (PIT) by the seller (if the seller is an individual) or corporate income tax (if the seller is a legal entity). On the other hand, the buyer must also be aware of the civil law transaction tax (PCC) at 1% of the market value of the acquired shares.

This alert is for informational purposes only and does not constitute legal advice.

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