The majority of entrepreneurs recognize the importance of securing armoured agreements in the creation of societies. Especially bearing in mind that most of these societies are made with partners with strong family ties. However throughout the life of society there are many changes such as the introduction of new partners or even deaths. Situation in which it is important to know the most important aspects of the transmission clauses mortis causa.

Definition of Mortis causa

The expression mortis causa comes from Latin and literally means “by cause of death.” This expression is widely used in law for different aspects of legal acts that must be carried out after the death of a person. In this case we focus on mercantile societies.

These are very important clauses related to the voluntary transmission of participations. As indicated in the law of transmission mortis causa, the acquisition of social participation by hereditary succession grants status as a business partner to the heir or heirs.  In fact, the existing clauses of this law solve the main problems as follows:

• The price of the shares and conditions for the transmission by the agreed initial agreements is determined.
• This law avoids frauds for higher price than the real of the shares thanks to an objective valuation system.
• The value of transmission will be fixed by the auditor of the company and consulted to experts and other understandings.

However, in the event of a member’s death, a preferential acquisition right can also be established where the partners can acquire those shares before the successors themselves. We can help you to form a different regime in the social statutes.

Tips for transmission mortis causa

The status of a member requires formalities of inheritance of inventory of goods and adjudications. And the process time varies in each case so it is important to keep in mind from the beginning of the society all the legal details that we have pointed out and the following tips:

1. To make an important forecast and to collect social statutes to foresee the good resolution of this type of transmission of participations.
2. It is much more positive to have preferential procurement rights for partners. This is more important than it looks in the face of a future. It is avoided that the heir can sell his shares to foreign partners. Situation that could be aggravated if there are minor heirs or if the partner was divorced.

What happens if there is a lack of agreement between the partners in the purchase price?

According to the law in case of lack of agreement to fix the purchase price, an independent expert can be appointed. This will be a guarantee for the three-month period granted for the right of preferential acquisition and for the payment of the cash price to be established. These are the two requirements that should be respected by the statutes when it comes to including a clause specifying a regime of transmission mortis concrete cause.

Mortis cause of corporations

In this case the same principle of free transmissibility is also governed except for establishing some statuary restriction. However, the law requires as collateral for the heirs that the company presents an alternative by means of an acquirer of the shares or its acquisition for a reasonable value. In addition, in case of transmission of shares mortis causa, an independent expert appointed by the directors of the company will set the corresponding value.

In the case of employment companies, the right of preferential acquisition shall be present in the event of the death of a working partner.

Our services for the modification of companies

To make any change in a company, the same public deed and the registration of the trade register must be used. Our experts can help you modify a society even in cases where one of the partners is dead. There are different issues that can make such a simple process quite complex. It can mainly be due to the way in which society was created. That is why it is so important to hire a legal adviser before and after establishing a company.

If you have any doubts about any modification of companies you can contact us. We will accompany you throughout the process. Our team are experts in the most common modifications of society as follows:

• Changes of name or social reason
• Departure and incorporation of partners
• Capital Change
• Statute reform
• Change of limitations in the powers
• Transformation a Society