Transfer of a business share

What it means

A transfer changes the shareholder, not the company: the entity carries on with its IČO, its contracts, its staff and its history. What passes is the business share, under an agreement in the form of a notarial deed or a document authorised by an attorney; officially verified signatures have not been enough since August 2026.

It is neither a sale of the business nor a contribution of assets to the company. The Commercial Code ties the transfer to the memorandum of association: whether a transfer to an outsider is admissible at all, and whether the general meeting must approve it, is settled there first.

A transfer must be told apart from a devolution of the share, which happens without a contract, for instance by inheritance or when a corporate shareholder ceases to exist. Part of a share can also be transferred if the articles allow it, although splitting a share usually needs the consent of the general meeting.

How it works in practice

The agreement is joined by the general meeting’s consent where the Act or the memorandum calls for it; the tax administrator’s consent has not accompanied a share transfer since 2022. The transfer takes effect towards the company when the agreement is delivered to it, so the entry in the commercial register is only declaratory, though it still has to be applied for.

For an individual the proceeds are other income: the deductible cost is the documented acquisition price of the share, and a loss on the sale cannot be claimed. Such income also enters the annual health insurance reconciliation, and the Act provides an exemption on conditions worth testing against the specific deal.

Before a transfer we prepare the figures behind the price for the buyer or the seller: a current balance sheet, the level of retained earnings, amounts owed to shareholders and any tax arrears. The price of a share often differs from the book value of equity, but these numbers are where every negotiation starts.

What to watch out for

The buyer takes the company with its past: arrears on tax and levies, unfiled accounts, disputes and exposure to a tax audit of periods before the deal. The transfer agreement erases none of it, which is why due diligence precedes signature and part of the price is held back or placed in escrow.

On the seller’s side, a common mistake is being unable to prove what was originally paid for the share. Only a documented acquisition cost counts as an expense, meaning the paid-up contribution or the purchase price; without the documents the whole proceeds are taxed. Old statements and contracts therefore belong in the archive for as long as the share is held.