What happens when your business partner in Spain dies? Who inherits the shares of the company? Who will make decisions from that moment on? Spanish regulations can be complicated. If you want to go through the legal process without issues and have peace of mind, contact us and we will help you to solve all the issues related to probate and business or shared ownership of properties in Spain.
UK regulations in opposition with Spanish ones
When starting a partnership in the UK, there are two main options: tenants in common and joint tenancy.
On the one hand, tenants in common can own different shares of the property and you can pass on your share of the property in your will; thus when the time of probate comes, the property does not automatically go to the other owners if you die.
On the other hand, ‘joint tenancy’ means that the partners have equal rights to the whole property and the property automatically goes to the other owners if you die. As a result, you cannot pass on your ownership of the property in your will.
In Spain, you may not find terms like tenants in common and joint tenants, but in practice it works in the same way as in the UK. There are many different society or partnership figures in Spain, but in general you can expect that, when an owner of property with additional owners dies, the property goes to the heirs. This can mean that the property goes to several heirs, making the ownership of the property more fragmented and perhaps more difficult to manage.
However, the society statutes? state that the surviving owners will have the right to acquire the property in the time from the date of death they have to do so (don’t understand this?), which may be interesting for society management because it will mean more stability and fewer changes.
In any case, this is something the owners have to decide when starting the partnership, but we can help and inform you about this and even get it done for you. Take into consideration that, under Spanish regulations, many private contracts can be done publicly with the intervention of a notary. When making the society statutes?, a notary is a great help to make these regulations legal and acceptable in Spanish jurisdiction.
Make sure to have everything well stated in your partnership and avoid future problems for both you and your heirs. Contact us now!
Do the living owners inherit the shares that belonged to the deceased?
No. The living partners have the right to buy the shares at market price after the date of death. If it is not clear, the heirs and the partners may choose an expert to state that price.
Who of the living owners has the right to get the shares of the deceased owner?
Chances are that the partnership has more than two partners, and once one of them dies there are several people with rights to acquire the property. How is this decided?
The partners will have the right to acquire the shares in the same proportion they hold normal property shares. For example, someone with 50% of the shares will have the right to acquire the 50% of the shares of the deceased owner.
Do the heirs have the right to receive contributions done by the deceased owner?
It is very common for partners to contribute to the society when it is launched and over time capital increases. Could the heirs claim the reimbursement of those contributions?
No. Once done, the contributions are under the ownership of the business. The partners only have the right to participate in its profits (or debts) in the same proportion they have the shares.
What happens in the meantime?
While the heirs complete the probate, there is a special inheritance community in which all the heirs participate. How does this affect the decisions in the company?
If the heirs agree, they can name a representor who will be able to vote on company decisions without needing to ask for permission from the other heirs. If the heirs don’t agree who is the representor, many issues may arise and the best would be to seek help from a notary to assist you on how to proceed.
We have experts in Spanish and UK regulations. Take advantage of them for everything related to your probate in Spain. Doing things properly from the beginning can save you a lot of money, time, and worries.
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