Only the spouse who personally acquired shares is a partner in the company – Supreme Court ruling

Pursuant to the Supreme Court ruling of 8 May 2019 (case ref. V CSK 109/18), a spouse who did not participate in the transaction of acquiring shares in a limited liability company (spółka z o.o.) cannot exercise rights related to those shares, even if statutory marital community property applies within the marriage.

In such a case, only the acquirer is considered a shareholder of the company. The spouse of the acquirer does not obtain shareholder status, in particular, this does not arise from community property. Consequently, the spouse of the acquirer is not entitled to a claim for admission as a shareholder.

The Supreme Court, based on the facts of the case, presented the specific situation of shares held in the spouses’ joint property from two perspectives — the Family and Guardianship Code and the spouses’ relationship with the company:

The Court, taking into account that the acquisition of 96 shares by the deceased K. J. in E. Limited Liability Company with its registered office in K. took place during his marriage to the applicant, stated that from the perspective of the Family and Guardianship Code, these shares entered the joint marital property. However, since only K. J. personally carried out the acquisition of these shares, only K. J. is to be regarded as the shareholder exercising the rights arising from those shares vis-à-vis the spółka z o.o. E.

Such an interpretation of the provisions on shares in a limited liability company forming part of the spouses’ joint property leads to the need to treat these shares differently from the perspective of the Family and Guardianship Code provisions, which constitutionally guarantee protection of marital community property and grant the other spouse rights to these shares that, upon dissolution of the marriage, transform into co-ownership, generally amounting to 1/2 of these shares. On the other hand, from the perspective of the spouses’ relationship with the company whose shares are involved, only the spouse who performed the transaction with the company exercises the rights arising from the shares.

This legal assessment of the rights holders to shares within the marital community property results from the lack of coherent regulation between the provisions of the Family and Guardianship Code and those of the Commercial Companies Code. That shares acquired during the marital community property enter the joint property is indisputable from the perspective of the constitutional protection of each spouse’s property. On the other hand, it is impossible to impose on the company to which the shares belong, and on the spouse who is not a party to the transaction with the company, the status of shareholder.

Therefore, according to the prevailing stance in the Supreme Court’s case law, only the spouse who was party to the transaction with the company should be regarded as a shareholder. Until the legislature explicitly regulates the exercise of rights from shares differently, such a position may not fully protect the interests of the other spouse, particularly where the spouses are in conflict. Currently, however, there is no basis for the other spouse to claim admission as a shareholder or to guarantee the same rights in exercising powers from joint shares as the spouse who concluded the transaction with the company.

In the case at hand, this means that only the deceased K. J. was entitled to exercise rights arising from the 96 shares in E. spółka z o.o. Accordingly, he effectively disposed of these shares by a donation agreement dated 17 February 2010 in favour of his daughter M. W. Contrary to the cassation complaint’s allegations, the applicant’s consent, given in the form required by Article 180 of the Commercial Companies Code in conjunction with Article 63 of the Civil Code, was not required for the disposal of these shares.

The situation of inability of the other spouse to dispose of the shares may change only after the death of the shareholder spouse. Shares in a limited liability company are inherited on the basis of the deceased shareholder’s will as well as by law. In the case decided by the Supreme Court, the owner of the shares died before the shareholders’ meeting adopted the resolution on the profit distribution for the financial year. According to the Supreme Court’s position, this meant that those entitled to the dividend for that year are the shareholders who held the shares on the date the profit distribution resolution was adopted. Since the person died earlier, they were no longer a shareholder on the dividend distribution date, and their place in the company was taken by the heirs. Therefore, the right to the dividend was acquired not by the former shareholder – the deceased – but by their heirs. The dividend was due to them.

If the shareholders wished to maintain control over the inheritance process of shares, they should limit or exclude the possibility of the deceased’s heirs joining the company in the company agreement. Regulation of inheritance of shares thus remains in the interest of shareholders, heirs, as well as the limited liability company itself. The consequence of lacking appropriate provisions in the agreement may be conflicts with heirs and paralysis of the company’s functioning.