If one spouse acquired a business share before the marriage, the share itself remains their sole property. Whether the increase in the company's value (its appreciation) during the marriage falls within the community property of spouses (BSM) has no express basis in statute. Case law and legal doctrine liken it to a rise in the market price of real estate and do not include the appreciation itself in the BSM. The solution for spouses is a preventive agreement extending the BSM, in the form of a notarial deed, in which the appreciation of the share is expressly included in the BSM and the method of calculating it is defined.
If one spouse acquires a business share in a limited liability company (s.r.o.) before the marriage is concluded, it follows from the statutory wording of § 143 of the Slovak Civil Code that this share is their sole property. But what happens if the company develops successfully during the marriage and its value rises sharply? Is the appreciation of this "premarital share" itself subject to the settlement of the community property of spouses (bezpodielové spoluvlastníctvo manželov, 'BSM') after divorce?
The question of the appreciation of a business share solely owned by one spouse as a potential component of the BSM has not yet been resolved in the case law of the Supreme Court of the Slovak Republic. Legal doctrine and judicial practice, however, provide important answers in this area.
Including the mere appreciation of a business share solely owned by one spouse in the BSM estate has no basis in the provisions of the Slovak Civil Code. Although it is true that the proceeds, accretions and fruits of an asset (whether or not the asset itself belongs to the BSM) form part of the BSM and must be settled, a rise in a company's value must be assessed differently.
The question must be likened to the appreciation of solely owned real estate or a movable item. The subject of BSM settlement does not include the difference between the price of real estate solely owned by one spouse at the time the marriage was concluded and at the time it ended. If the appreciation of a business share were to form part of the BSM, then every appreciation of any movable or immovable asset solely owned by one spouse would have to form part of the BSM. , we would then also have to compensate out of the BSM estate any decrease in the value of one spouse's sole property as of the date the marriage ended.
In judicial practice we therefore repeatedly see that the appreciation of one spouse's business share during the existence of the BSM is not included in the BSM estate. Although in many proceedings this approach appears unfair from the perspective of the other spouse, who contributed to the share's appreciation indirectly (for example, by caring for the household or supporting the business), the conclusion that this appreciation should be included in the BSM has no clear basis in the law in force.
This legal position does not prevent the spouses from resolving the situation by contract. The solution is to conclude a written agreement extending the BSM in the form of a notarial deed. By such an agreement, the spouses may validly extend the scope of the BSM, for the future, to include:
If you decide on such a step, it is advisable to set out expressly in the agreement the method for calculating the value of the business share. At a minimum, this is done by stating the baseline value of the business share as of the date the agreement is concluded, or as of another relevant reference date. Such an agreement may, however, be concluded only after the marriage has come into existence; the law does not permit it to be concluded before the marriage. The agreement operates only for the future, so its effects do not extend to appreciation that occurred before it was concluded.
Do you feel that the growth of your spouse's business is also your joint success, yet in a potential divorce you would come away short-changed? Book a professional legal consultation in good time and we will examine your real options.
