The question of whether a business share in an s.r.o. (Slovak limited liability company) falls within the community property of spouses (bezpodielové spoluvlastníctvo manželov, "BSM") has undergone a long evolution in the case law of the Supreme Court of the Slovak Republic. Today the legal position is settled: if a business share was acquired during the marriage at least partly from joint funds, its economic value belongs to BSM. On settlement, the share is allocated to the spouse who is the member of the company, and the other spouse is entitled to financial compensation based on the market value determined by an expert opinion. Dealing with the share (e.g. its sale) requires the other spouse's consent, and a preventive safeguard is to agree a narrowing of BSM by notarial deed before the share is acquired.
The question of whether a business share in a limited liability company belongs to the community property of spouses (bezpodielové spoluvlastníctvo manželov, "BSM") is one of the most debated topics in property settlements after divorce. For many years there was no uniform answer – the case law of the Supreme Court of the Slovak Republic evolved, changed and often contradicted itself. That is precisely why it is important to know how the courts' legal position has become settled and what it means for spouses dealing with the settlement of a business share.
The key moment was the judgment of the Supreme Court of the Slovak Republic of 31 March 2006, published as reported decision R 27/2007. This judgment delivered a fundamental legal conclusion: if a spouse acquires a business share during the marriage and uses, at least in part, funds belonging to BSM to do so, the economic value of the business share becomes part of BSM. The court also emphasised that on settlement it is not the "value of the share" that is allocated, but the business share itself, which can be allocated only to the spouse who is a member of the company. The other spouse is then entitled to compensation. This decision clearly confirmed that it is the economic value of the share, not the member's personal rights, that belongs to BSM.
Despite this, a decision emerged in 2009 that called this conclusion into question. The Supreme Court of the Slovak Republic, in case file no. 6 Obdo 30/2009, stated that . This decision, however, was not sufficiently persuasive, because it failed to engage with reported decision R 27/2007, which carried higher legal authority and represented the clearest position up to that point.
The situation stabilised only with the 2020 decision of the Supreme Court of the Slovak Republic (file no. 8Cdo/196/2018), which returned to the conclusions of reported decision R 27/2007. The court reconfirmed that a business share acquired during the marriage at least partly from funds belonging to BSM forms part of the settlement of BSM. It also emphasised that BSM includes other property rights, not only tangible things, and that the member's personal rights – such as managing or controlling the company – do not belong to BSM. The Slovak Commercial Code does not exclude the inclusion of a business share in BSM, so the application of the Slovak Civil Code is appropriate.
When settling a business share, its value must be determined. The case law is consistent that the state of the business share is assessed as of the date BSM ceased to exist, but its ordinary (market) value is determined as of the date of settlement. It is most often established by an expert opinion, which takes into account the quantity and quality of the share, the company's economic situation and market conditions.
An important question is also how the business share may be dealt with during the marriage. The sale of a business share goes beyond ordinary matters within the meaning of § 145(1) of the Slovak Civil Code, so the consent of both spouses is required. If consent is lacking, the share transfer agreement may be relatively invalid. Although the consent need not always be in writing, in the event of a dispute the transferring spouse will have to prove that the consent existed. It is therefore advisable to obtain it in written form with an officially certified signature.
The safest way to ensure that neither the business share nor its proceeds belong to BSM is to conclude an agreement narrowing the scope of BSM under § 143a of the Slovak Civil Code. The agreement must take the form of a notarial deed, operates only prospectively, and must be concluded before the business share is acquired. If the spouses also wish to exclude the proceeds of the share – such as profits, dividends or other distributions – this must be expressly stated in the agreement.
Are you dealing with the settlement of the value of a business share after divorce, or do you want to exclude a business share from BSM? Contact us – we will assess your case individually and find the most suitable solution.
