Sale of company shares (participaciones)

What is the sale and purchase of company shares?

The sale and purchase of shares (participaciones sociales) is a contract by which a partner (the seller) transfers all or part of their holding in a limited liability company (SRL) to another person (the buyer), who acquires the rights and obligations attached to that holding.

This transaction involves a change in the company's membership and must be carried out in accordance with the rules laid down by law and the company's articles of association.

When and how does the sale take place?

• When a partner wishes to sell or transfer their shares to a third party or to another partner.
• The other partners' pre-emption right must be respected if provided for in the articles of association or by law.
• The transfer is usually formalised by means of a public deed (escritura pública) before a notary, particularly to provide legal certainty and effect against third parties.
• The transfer must be registered at the Companies Registry (Registro Mercantil) and the company's register of partners must be updated.

What does carrying out the sale before a notary involve?

• Formalising the contractThe notary drafts and authorises the public deed containing the sale agreement.
• Certifying identity and capacityThe notary checks the identity and legal capacity of the parties.
• Reviewing the articles and conditionsThe notary makes sure that the transfer complies with the provisions of the articles of association and the law.
• Publicity and legal certaintyThe deed can be registered at the Companies Registry, ensuring it is public and effective against third parties.
• Internal registerThe register of partners is updated with the change of ownership.

Formal requirements before the notary

• Personal identification documents of the seller and buyer.
• Deed of incorporation of the company and its articles of association.
• Sale agreement with a clear price and conditions.
• Express consent of the parties.
• Payment of the related taxes (such as Transfer Tax – Impuesto sobre Transmisiones Patrimoniales).

Main legal effects

• Change of ownershipThe buyer becomes the owner of the shares and acquires voting and economic rights.
• Rights and obligationsThe buyer takes on the obligations and benefits attached to the shares.
• Limitations and restrictionsAny provisions in the articles of association limiting transferability must be respected.
• Register updateThe company updates its register of partners and the change is registered at the Companies Registry so that it is effective against third parties.

Advantages of a notarised sale

• Legal certaintyThe public deed provides certainty and prevents future disputes.
• TransparencyIt ensures that both parties know and accept the conditions.
• PublicityRegistration at the Companies Registry protects the buyer's rights against third parties.
• Makes transactions easierIt makes it simpler to obtain financing or to make a future transfer.