It is the notarial document by means of which a partner of a commercial company can sell its participation in the capital of the company to a third party in exchange for the price agreed upon.
This is a merely informative and non-binding estimate. This estimate is calculated based on two criteria: 1) our knowledge of the Notarial Tariff and 2) our daily experience in the preparation of this type of notarial document. (Royal Decree 1426/1989, November 17, 1989). and 2) our daily experience in the preparation of this type of notarial document. However, any variation (upward or downward) will be duly justified at the time of issuing the final invoice for the notarial service rendered.
Obviously, for the development of any business economic activity, its promoters require a set of material and human assets that allow its execution, such as physical assets (land, facilities, machinery, commercial premises), capital assets (investments, short and long-term financing) and, of course, labor force (in essence, workers).
The set of all these assets is what, in a generic way, can be defined as the capital stock of a company, that is to say, the set of money, assets and productive elements that its partners contribute to the company for the development of the economic activity that it has as its object.
Thus, the founding partners of the company will contribute to the company a set of assets that will form its capital stock, in exchange for which they will receive a share in it (in the form of participations or shares) according to the proportion of their participation with respect to the total amount contributed.
From a legal point of view, capital stock is considered to be the total contributions of all the partners to the company, which is divided into shares in the case of limited liability companies, and into shares in the case of corporations (Articles 1.2 and 1.3 of the Capital Companies Law). Along the same lines, Article 90 of the aforementioned law provides that the shares in limited liability companies and the shares in corporations are aliquots, indivisible and cumulative parts of the capital stock.
Thus, the shareholders of the capital company contribute assets or rights susceptible of economic valuation (Article 58 of the Capital Companies Act) in the form of monetary or non-monetary contributions (see Articles 61 et seq. of the Capital Companies Act) to make up its capital stock.
The holding of each participation and/or each share of stock, conceived as an incorporeal right (i.e., which does not fall on a physical or real property), therefore confers on its legitimate holder the status of shareholder, i.e., owner of the company, and confers on him the rights recognized by the Capital Companies Law and by the bylaws of the company (Article 91 of the aforementioned law).
It is also necessary to take into account that the initial capital stock of a company may be altered by corporate operations of increase or reduction of capital stock or by structural modifications of the mercantile companies (such as merger, spin-off or transformation), to which a specific section is dedicated.
In any case, and as is logical, in a market economy such as the Spanish one, in which the right to private property and freedom of enterprise is recognized (Articles 33 and 38 of the Spanish Constitution), the condition of partner, and therefore, of owner of the company, is fully transferable, so that by means of the corresponding sale and purchase of shares or stock, individuals or legal entities may transfer the ownership of the capital stock of capital companies, in the manner and with the requirements that will be discussed below.
This instrument, in short, allows individuals or legal entities to invest in capital companies, thus assuming a risk through which they expect to obtain a share in their profits, given the profit motive that presides over the activity of commercial companies.
However, and prior to the analysis of this transfer, it is undoubtedly necessary to understand more characteristics of the capital stock of commercial companies as well as the rights of their shareholders, so that the interested parties can have more elements of assessment on the convenience or not of granting the corresponding deed of sale of shares or stock.
With regard to the minimum share capital of a capital company, it is necessary to bear in mind that in accordance with Article 4 of the Capital Companies Act, the share capital of a limited liability company cannot be less than three thousand euros (3,000.00 euros), while in the case of a public limited company this minimum capital cannot be less than sixty thousand euros (60,000.00 euros). These amounts must be taken into account since it will not be possible to authorize deeds of incorporation of capital companies that have a capital figure lower than that legally established (Article 5 LSC).
Thus, in order to form a capital company, its partners must contribute the indicated amounts in the form of share capital, which may, however, be done successively, if necessary, observing the rules of Article 4 bis of the Capital Companies Act (for further details, please contact the notary's office).
Pursuant to Article 93 of the Capital Companies Law, under the terms established by the aforementioned law, the shareholder shall have, as a minimum, the following rights:
As can be seen, the legislator recognizes the shareholder's transcendental right to participate in the distribution of the company's profits (if any), since the shareholder invests its capital in the company with the intention of obtaining a profit or capital gain. Likewise, the right of the shareholder to continue to form part of the company's shareholding structure is recognized, on a preferential basis, when the company must undertake operations aimed at increasing its resources (such as, for example, a capital increase), the right to participate and to cast his vote in the highest decision-making body in which the most important decisions will be adopted (including, to mention a few, the approval of the annual accounts, the appointment of the administrative body, the amendment of its bylaws, etc.), as well as the right to information (the right of the shareholder to be informed about the company's activities and the right to be informed of the company's activities), as well as the right of the shareholder to be informed of the company's activities.) as well as the right to information (see articles 196 and 197 of the Capital Companies Act) through which they may require the directors to submit reports and clarifications on relevant issues of the company.
With regard to the type of shares, it should be noted that in most companies, all of them have the same type and, therefore, attribute the same rights to the shareholders (Article 94.1 of the Capital Companies Law). However, the law allows the existence of shares or stocks that attribute different rights to their holders, in which case it is possible to speak of classes of shares for each of them (article 94.2 of the aforementioned law).
<ejemplo>“Así pues, a modo de ejemplo, una sociedad podrá tener acciones de clase “A” y clase “B”, que atribuyan a sus titulares mayores o menores derechos de voto o sobre los dividendos que a la otra clase”.<ejemplo>
In any case, the company must give equal treatment to all shareholders who are in identical conditions (Article 97 of the Capital Companies Act).
With regard to the shares, in accordance with Article 104 of the Capital Companies Law, the limited liability company is obliged to keep a register of shareholders, in which the original ownership of the shares and the successive transfers (voluntary or forced) that occur over time, as well as the constitution of real rights and other encumbrances on the shares, must be recorded.
In limited liability companies, only the person who is registered in said book will be considered a shareholder, whose entries will indicate the identity and domicile of the holder of the shareholding, and all shareholders will have the right to examine its contents, the keeping and custody of which will correspond to the administrative body (Article 105 of the Capital Companies Act).
In the case of corporations, shares may be represented by certificates (Articles 113 to 117 of the Capital Companies Law) or by book entries (Articles 118 and 119 of the aforementioned law).
Having made this approach to the concept of capital stock and to the aliquot, indivisible and cumulative parts into which it is divided, i.e., the shares in the limited liability company and the shares in the corporations, it is now time to address the understanding of the deed of sale of such shares or shares.
As it has been tried to point out initially, the reality of the mercantile traffic and of the economic and investment relations require that our legal system designs instruments directed to convey the transfer of the ownership of the capital stock of the mercantile companies, in order to favor the investment and the creation of wealth. It is therefore to this need that the deed of sale of shares or stockholdings responds, by virtue of which the transfer of ownership of the shares or stockholdings from their former owner to their new owner will be instrumented.
In the following, with the individualized analysis of the specific regime for the transfer of shares and stock, given the notable differences between the two, the user will be able to understand the importance of this instrument and its practical applicability.
In the analysis of the transferability of corporate shares, there are several specific issues to be considered, which will be discussed below:
1) Form of documenting the transmission:
Pursuant to Article 106 of the Capital Companies Law, the transfer of the shares, as well as the constitution of the real right of pledge over them, must be recorded in a public document, so that in this case the legislator is quite clear, requiring the public deed to convey the sale of the shares of a limited liability company.
2) Restrictions on the free transferability of inter vivos shares:
Having solved the formal issue (i.e. the need to grant the corresponding deed), it is necessary, secondly, to analyze what conditions and limitations the law establishes for the transfer of the shares. At this point, the reader should not lose sight of the eminently closed nature of the limited liability company, in which the legislator tries to prevent access to its shareholding to persons outside the initial shareholding composition, an idea which, as will be seen, presides over the regulation on this matter.
Thus, by virtue of Article 107 of the Capital Companies Act, unless otherwise provided in the bylaws, the voluntary transfer of shares by inter vivos acts between shareholders, as well as those made in favor of the spouse, ascendant or descendant of the shareholder or in favor of companies belonging to the same group as the transferring company, shall be free.
Outside these restricted cases, i.e., in all other cases, the transfer of the shares of the limited liability company is subject to the rules and limitations established in the bylaws and, in the absence thereof, to those established by law.
2.1. Statutory limitations: In this respect, the doctrine has traditionally distinguished four main types of clauses:
In any case, these statutory clauses must be subject to the limitations imposed by Article 108 of the Capital Companies Act, which establishes that:
2.2. Legal limitations: Once the statutory limitations have been overcome, the law (Article 107.2 of the Capital Companies Act) also requires compliance with a series of formalities that must be fulfilled in order for the transfer of the shares to take place, namely:
Finally, it should be noted that the transfer of shares that do not comply with the provisions of the law or, as the case may be, with the provisions of the bylaws, will not produce any effect against the company (Article 112 of the Capital Companies Act).
Another interesting question that should undoubtedly be analyzed is the possibility of the shares acquired being acquired by the company to which they refer. This possibility, known as treasury stock, is regulated in the case of limited liability companies in Articles 140 to 143 of the Capital Companies Law.
They establish that the limited liability company may only acquire its own shares in the following exceptional cases:
In any of these cases, once acquired by the company itself, these shares must be amortized or disposed of (in this case respecting the legal and statutory regime) within three years at a price never lower than their fair value.
Although far from the object of the deed of sale of shares, it is necessary for the reader to be aware that the Capital Companies Act (articles 109 and 110 respectively) establishes a series of specifications for the indicated modalities of transfer.
Thus, with regard to the compulsory transfer of the shares, it is necessary to know that, in the event that in the context of an enforcement proceeding there is a seizure of the company's shares that concludes with an auction of the same, at the time prior to the approval of the auction and the awarding of the shares, this situation will be notified to the company and this in turn to all the shareholders so that, if there is a preferential acquisition right, they may exercise it within a period of one month, subrogating themselves to the position of the auctioneer.
With regard to the system for the transfer of shares upon death, it should be noted that the acquisition of a shareholding by inheritance confers on the heir or legatee the status of shareholder. However, the bylaws may establish in favor of the surviving shareholders and, failing that, in favor of the company, a right of acquisition of the shares of the deceased shareholder, valued at the reasonable value they had on the date of the death of the shareholder, the price of which will be paid in cash.
In order to assess the different cases that can be found in reality with regard to the transfer of shares of public limited companies, as has been done previously, we will proceed to differentiate individually each of the different situations with their own substantive nature, so that interested parties may be aware of the main characteristics of each of them:
Thus, in the event that the shares are represented by certificates (which in turn may be registered or bearer shares, as mentioned above), the transfer of the shares will have the following variants:
A. Securities not printed or delivered: The law enables corporations whose shares are represented by securities to print them by the corporation itself (i.e., to incorporate them into physical documents with the requirements of Article 114 of the Capital Companies Law) or not.
If they are not, which is the case in most corporations, the transfer of the shares will proceed in accordance with the rules on the assignment of credits and other incorporeal rights (Article 120.1 of the Capital Companies Act), for which it will be necessary to resort to the provisions of Article 1,526 of the Civil Code in relation to its Articles 1.218 and 1.227, from which it follows that: "The transfer will not take effect against third parties unless its date must be considered as certain, which will happen when the corresponding public document is granted, which will be proof of the fact that motivates its granting, of the date of this and of the declarations that the contracting parties have made".
Thus, from the joint interpretation of all these precepts, it can be stated that in the case of shares represented by registered certificates not yet printed or delivered (which is the case in the vast majority of corporations), the transfer of such shares must be instrumented through the corresponding public deed in which the essential characteristics of the legal business, such as the contracting parties, the object, the price and other conditions of the transaction, are set forth.
In any case, once the transfer has been accredited, the administrators must immediately record it in the book-register of registered shares.
B. Printed and delivered securities: In the event that the shares of the company, represented by securities, have been printed and delivered to the shareholders under the terms of Article 114 of the Capital Companies Law, the following situations can be differentiated:
This transfer must then be accredited to the company by showing the certificate to the administrators, who, after verifying the regularity of the chain of endorsements, shall record the transfer in the book-register of registered shares.
In the event that the shares are represented by book entries (typical of large listed companies), their transfer will take place by book transfer, whose registration in favor of the acquirer in the accounting register by the entity in charge of keeping the register will produce the same effects as the tradition of the securities (article 11 of Royal Legislative Decree 4/2015, of October 23, which approves the revised text of the Securities Market Law).
Our legal system, as already indicated, conceives the corporation as an open corporation whose shares are governed by the principle of free transferability of shares.
However, the legislator has established a series of cases in which the bylaws may restrict the transferability of the shares of the corporation (Article 123 of the Capital Companies Law), specifically:
Finally, in this regard, interested parties should also bear in mind that the shareholders may enter into reserved agreements among themselves, under Article 29 of the Capital Companies Act, limiting the transferability of the shares among themselves, but such agreements shall not be enforceable against the company.
The regulation of the so-called treasury stock in corporations, and for the purposes of the present case, in the form of derivative acquisition (since this could be embodied in a deed of sale of shares), can be found in Articles 144 and following of the Capital Companies Act, which establishes that the corporation may acquire its own shares or the shares of its parent company in the following cases:
In addition, the corporation may also acquire its own shares and the shares created or the shares issued by its parent company, when the following conditions are met:
In any case, in these two cases, the par value of the shares acquired directly or indirectly, added to those already held by the acquiring company and its subsidiaries and, if applicable, by the parent company and its subsidiaries, may not exceed twenty percent.
As a last issue to be dealt with, as has been done in the area of shares, it is also interesting to briefly study the regime of mortis causa and forced transfer of shares (Articles 124 and 125 of the Capital Companies Law).
With regard to the first type, the aforementioned rule establishes that the statutory restrictions on the transferability of shares shall only be applicable to acquisitions through death when so expressly established in the bylaws.
In these cases, in order to refuse the registration of the transfer in the book of registered shares, the company must present the heir with an acquirer of the shares or offer to acquire them itself for the reasonable value at the time it requested the registration.
Likewise, the procedure described above will be applicable when the acquisition of the shares has occurred as a result of a judicial or administrative enforcement procedure.
Another of the limitations that those interested in granting this type of instrument must take into account is that the transfer of the corporate participations or shares cannot be verified until the deed of incorporation of the company or, as the case may be, of the capital increase, is duly registered in the Mercantile Registry, as this is imperatively imposed by the legislator in Article 34 of the Capital Companies Act.
This limitation must therefore be taken into account for the deeds to be granted.
Another question that many interested parties ask when they go to the notary's office is whether the purchase and sale of shares must be registered in a public registry, such as the Mercantile Registry.
This answer must be answered in the negative, since the legislator has not imposed the obligation, or even the mere possibility, that this type of acts have access to the aforementioned Registry. Likewise, in case there were any doubts, the General Directorate of Legal Security and Public Faith has confirmed this interpretation by deciding that this type of operation will not have access to the Registry of Movable Goods either (see resolution of April 29, 2003).
In any case, it should be taken into account that if, as a consequence of the corporate transaction, all the shares or equity interests of the company become the property of a single person, the company in question will become a sole proprietorship, a characteristic that can be registered in the Mercantile Registry, to which an entry is expressly dedicated in this website.
Another of the main questions that the interested parties ask themselves when carrying out this type of operations is the tax cost that they may entail.
From the point of view of indirect taxation (i.e., VAT or Transfer Tax), it should be noted that, broadly speaking, and without prejudice to certain exceptions, the transfer of shares or stock will be exempt from the aforementioned taxes.
However, in the area of direct taxation, the purchase and sale of shares in companies will be taxed on the capital gain that may have been generated by the seller, all in accordance with the provisions of Law 35/2006, of November 28, 2006, on Personal Income Tax.
In any case, given the complexity of tax regulations, it is always advisable for interested parties to seek the advice of tax experts who can plan the operation for tax purposes in the way that best suits the parties in question.
In order to execute a deed of sale of shares or stock, it is only necessary to contact the notary's office (by calling our office telephone number or email address mercantil@jesusbenavides.es) and make an appointment on the day and time that is most convenient for the grantors.
On the agreed date and time, the grantors must simply go to the notary's office with the necessary documentation (see section on necessary documentation) to sign the corresponding deed, which will be drafted based on the minimum legal content required and the forecasts and needs of the clients in question.
In any case, if the interested parties need assistance in relation to the models of certificates resulting in the adoption of the corporate resolutions necessary for the act in question, they can contact the notary's office for help and advice in this regard.
Outside our business hours, you can also contact us. The corresponding department will get back to you as soon as possible:
It is enough that the persons (buyer and seller) who wish to formalize the purchase and sale of participations or shares go to the notary's office with their National Identity Card. In case that some of them were a foreign person it will have to present before the notary his original and in force passport. In addition, it will be essential to provide the NIE together with the mentioned passport.
The selling party will have to provide the authentic copy of the titles of ownership of the participations or shares to which the deed will refer, such as for example a deed of incorporation, of increase of social capital, of purchase and sale of previous shares or participations, of donation, of exchange, of acceptance of inheritance, etc. In short, to exhibit before notary the notarial document through which it acquired the participations or shares that it wishes to sell.
The deed of incorporation of the company whose shares or stocks are the object of the sale and purchase, containing its current Articles of Association, must be provided. If applicable, any other deeds affecting the nature and particular circumstances of the company, such as a change of corporate name, corporate purpose, registered office, transformation, amendment of the corporate bylaws, etc., must also be provided.
Proof of the means of payment used to accredit the payment of the agreed price must be provided, such as proof of bank transfer, a photocopy of the check used, etc. It should be noted that if the amount of the purchase/sale is greater than 1.000€, and any of the intervening parties is a professional or businessman, it is essential and inexcusable to provide proof of the means of payment.
