Inheritance of a business interest and succession in a company

Inheritance of a business interest and succession in a company

Transfer of a business interest to heirs

Under § 116 of the Commercial Code, a business interest in a limited liability company passes to the shareholder's heirs upon the shareholder's death. The company's articles of association may, however, exclude inheritance of the business interest. In that case, the heirs are not entitled to the business interest or the rights and obligations attached to it, but to a settlement share: monetary compensation for its value, determined by law or by the articles of association.

Which of the two approaches is more suitable depends on the nature of the company. For a family business intended to pass to descendants, allowing inheritance is a natural choice. In a company with several shareholders who are not related, excluding inheritance is often more prudent — otherwise, the remaining shareholders may suddenly find themselves in business with people they do not know and who have no connection to its activities.

The decision on this matter takes the form of a single provision in the articles of association. It must, however, be made while all the shareholders are alive and able to reach an agreement; once the decisive event occurs, the scope for agreement is considerably narrower.

The period of inheritance proceedings

Inheritance proceedings usually take several months, and considerably longer where the estate is more complex. Meanwhile, the company continues to operate — it employs staff, fulfils contractual obligations, issues and receives invoices, and remains subject to statutory deadlines.

The situation is particularly complicated if the deceased shareholder was also the company's sole managing director. The company is then left without a statutory body and cannot act externally. At the same time, there is no one to convene the general meeting that would appoint a new managing director, and voting rights attached to the deceased's interest are subject to special rules until the inheritance proceedings conclude. This situation can be resolved, but doing so under time pressure is considerably harder than preparing in good time.

Measures that can be taken in advance

The first step is to review the articles of association and decide whether inheritance of the business interest is permitted or excluded and, if excluded, how the settlement share will be determined. The second is to ensure that the company does not have just one managing director, or that the articles of association expressly set out a procedure for the event that the statutory body's term of office ends.

The third measure is to make a will. Under § 476 of the Civil Code, a will may be made in the testator's own handwriting, in another written form with witnesses, or in the form of a notarial deed. The last of these has the advantage that the will is recorded in the Central Notarial Register of Wills maintained by the Notarial Chamber of the Slovak Republic under § 73c of the Notaries Act. The register is not public, and information from it is provided to the court and to the notary acting as a court commissioner in inheritance proceedings. The will is therefore always located during the proceedings and cannot be concealed or lost.

Another option is to transfer part of the business interest to the successor during the owner's lifetime. Such a transfer, which must meet formal requirements under § 115(4) of the Commercial Code, simplifies the subsequent inheritance proceedings and allows the successor to become familiar with the company's operations while this can still be done without risk.

Recording the change in the Commercial Register

Inheritance proceedings are conducted by a notary appointed by the court as a court commissioner and conclude with a decision on the inheritance. That decision also serves as the basis for registering the change of shareholder in the Commercial Register. From 17 August 2026, under § 42(2) of Act No. 29/2026 Coll. on the Commercial Register, a notary acting as registrar also makes changes to registered information, so the matter can be concluded without a further separate filing with the registration court.

If the articles of association exclude inheritance of the business interest, a different change is entered in the register — usually a change in the distribution of interests among the remaining shareholders or the disposal of the released business interest in accordance with the articles of association.

Forced heirs

Even where a will has been properly made, descendants enjoy special protection. Under § 479 of the Civil Code, minor descendants must receive at least their statutory inheritance share, and adult descendants at least half that share. If a will conflicts with this rule, it is invalid in the relevant part — this is, however, relative invalidity, since § 479 is listed in § 40a of the Civil Code. The will is therefore deemed valid unless the affected heir invokes its invalidity.

It follows that a will cannot be used to exclude a descendant completely from inheritance; that is the purpose of disinheritance under § 469a of the Civil Code, which is subject to an exhaustive list of grounds. A will is, however, a suitable way to determine who will receive an interest in the company and who will receive other assets — and this practical division is often more important for preserving family harmony than the values themselves.

Legislation cited in this article

Act No. 513/1991 Coll., Commercial Code — § 115(4), § 116, § 117 (released business interest), § 148

Act No. 40/1964 Coll., Civil Code — § 40a, § 460 et seq., § 469a, § 476 et seq., § 479

Act No. 323/1992 Coll., Notaries Act — § 73c (Central Notarial Register of Wills)

Act No. 29/2026 Coll. on the Commercial Register — § 42(2)

This text reflects the law as at 11 September 2026. It is for information only and does not replace legal advice on a specific matter. Current fees are listed in the office's price list.

JUDr. Martin Vlha, PhD., notary · Notary Office Stará Vajnorská 8, Bratislava III