A business share is a property right that grants its holder certain rights in the company, such as voting rights, the right to a share of profits, and the right to liquidation quota. The Companies Act (hereinafter ZGD-1) stipulates in Article 481 that business shares can be transferred and inherited, meaning they are subject to general inheritance rules. Unlike the inheritance of other types of property, the inheritance of business shares involves not only the transfer of property value, but also the continuity of business operations and the preservation of (family) wealth.

The Inheritance Act (hereinafter ZD) prescribes general rules for the transfer of property after the death of the decedent, while the specificities related to business shares are regulated by ZGD-1. The inheritance of business shares can take the form of testamentary disposition or inheritance based on law.

The particularity of business share inheritance is that it transfers not only property value, but also management rights in the company. The Inheritance Act stipulates that the deceased’s estate passes by law to his heirs at the moment of his death. This means that the deceased’s heirs have entered into his legal position as a member at the moment of death, that is, into all rights and obligations that the member had in accordance with the articles of association. If there are multiple heirs, an inheritance community is formed where the heirs jointly manage the business share.

In the event that the deceased does not make a will and legal inheritance occurs, where there are usually multiple heirs, the operation of the company may be complicated precisely due to the inheritance procedure following a member. Members have extremely important tasks according to ZGD-1, including deciding on the adoption of annual reports and use of balance sheet profits, demands for payment of basic contributions, return of additional payments, division and termination of business shares, appointment and dismissal of management, measures for review and supervision of management work, appointment of proxies and business representatives, enforcement of company claims against managers or members in connection with compensation for damage incurred during establishment or management, representation of the company in court proceedings against managers, and other matters as determined by this law or the articles of association.

Until division, heirs manage and dispose of the inheritance jointly, which means that all heirs jointly manage one business share that belonged to the deceased member. In practice, the most common problem arises because this means that all heirs of the member, who have only one vote together, must decide unanimously on all questions at the assembly. This can complicate the company’s operations, yet the company has no right to resolve this situation and must wait for the inheritance procedure to end and the court to issue a decision on inheritance.

Division of business shares is generally not permitted, but ZGD-1 in the fourth paragraph of Article 483 allows exceptions for alienation, division of spouses’ joint property, or inheritance; however, the articles of association may prohibit the division of business shares. Article 505 of ZGD-1 provides the possibility for members to decide (at the assembly) on the division and termination of business shares, but only if the articles of association do not already contain provisions on company management (second paragraph of Article 504 ZGD-1). The legal regulation reflects the legislator’s will to leave the choice to members whether they want to have a closed or open company. Their choice is expressed in the provisions of the articles of association, whereby provisions on the prohibition of business share division or on the assembly’s authority to decide on business share division must be clear and unambiguous.

In the event that an heir would cause damage to other heirs or the estate through their actions, the heirs may propose to the court to appoint a temporary guardian of the estate, who is entitled to sue or be sued on behalf of the heirs, to collect claims and pay debts, and generally to represent the heirs. In this way, heirs can protect themselves and prevent one of the heirs from harming the estate and consequently the company.

However, during the inheritance procedure, when heirs jointly manage the business share, this represents a major challenge for other members and the company’s management, as the entire company, including employees, is at great risk regarding future operations.

The articles of association may contain provisions that regulate the transfer of business shares in the event of a member’s death. Such provisions are especially important in family businesses where they want to maintain control over ownership within the family, so members can prepare in advance for the above situations and regulate this in the articles of association.

Given the above, the inheritance of business shares is a legal procedure that requires careful planning and knowledge of Slovenian legislation. Timely action and proper preparation of documents can significantly facilitate the transfer of ownership and ensure the continuity of business operations.