Other restrictions
In addition to the requirements to obtain consent from the company, administrative authorities or third parties, there are several additional issues to be considered in the case of transactions involving individuals.
Consent of spouse
It is generally in the interest of the other party to the transaction to obtain consent from the spouse if:
- A party to the transaction (either the seller or the buyer) is a married individual, and
- The subject of the transaction (if the individual is the seller) or the funds applied to the purchase price (if the individual is the buyer) are part of the joint marital assets of the party and his or her spouse
Unfortunately, the buyer has a very limited possibility of determining or verifying on the basis of documents provided by the seller what is the seller’s marital status and whether the given transaction requires the consent of the seller’s spouse. Thus it is reasonable to expect that the seller will provide representations and warranties in the sale agreement with respect to the seller’s marital status, and if the seller is married, also concerning the nature of the marital property regime observed by the couple.
In the case of an asset deal, particularly where the subject of the transaction is an enterprise or real estate, under Art. 37 §1 of the Family and Guardianship Code the lack of spousal consent may result in the invalidity of all or part of the transaction.
With respect to a share deal, consent of the spouse is not a condition for the validity of the transaction, but it should be pointed out that lack of such consent may significantly impede or prevent altogether enforcement of claims against the spouse who is a party to the transaction (e.g. for contractual penalties in the sale agreement or warranty claims for defects). This results from limitations on satisfying claims out of the joint assets of spouses where one spouse incurs an obligation without the consent of the other spouse, as specified in Family and Guardianship Code Art. 41.
The consent by the spouse generally requires the same form as that provided for the transaction affected by the consent. In order to avoid doubts as to the authenticity of the consent, however (i.e. to be sure it is given by the right person), it is in the interest of the other party to the transaction for the consent to be issued in all cases in a form at least as rigorous as a notarised signature.
Under Family and Guardianship Code Art. 38, a transaction concluded with an individual involving assets or rights specified in Art. 37 §1 will be effective notwithstanding the lack of spousal consent if the other party acted in good faith (e.g. did not know and could not have known that the party was married). Regulations concerning protection provided to a good-faith purchaser (Civil Code Art. 169 ff.) will apply as relevant.
It should also be pointed out that if consent of the seller’s spouse is not obtained, the buyer’s enforcement of claims against the seller (e.g. for contractual penalties provided for in the sale contract or claims for warranty for defects in the subject of the transaction) can be rendered difficult or impossible. This is because of the limitations provided in Art. 41 §2 of the Family and Guardianship Code on satisfaction out of the spouses’ joint marital property of an obligation incurred by one spouse without the consent of the other spouse.
Consent of co-owner
When shares or assets are acquired from individuals, it often happens that there are two or more co-owners authorised to dispose of the property. This is particularly the case where they inherited the property but did not divide the property or eliminate co-ownership.
In this situation, Civil Code Art. 199 is relevant. It provides that disposal of jointly owned property requires the consent of all of the co-owners.
If all of the co-owners do not appear at the signing of the transaction documents, it is necessary to obtain their prior consent to dispose of the joint property. Such consent should be given in a form at least as rigorous as that provided for the agreement transferring ownership of the property (e.g. with notarised signatures in the case of transfer of shares in a limited-liability company, or in the form of a notarial deed if the transaction involves real estate).
To avoid doubts or potential future disputes concerning the target and the effectiveness of the acquisition, it is in the interest of the buyer to assure that the consent reflects as fully as possible the terms agreed between the parties, particularly that the consent clearly indicate the buyer and the main terms under which the transaction is to be carried out (particularly the price).
Estate and gift tax
In addition to the issue of co-ownership of the property, particularly when the seller is an individual and the transaction documents are to be made with notarised signatures or in the form of a notarial deed, it is crucial to pay attention to Art. 19(6) of the Estate and Gift Tax Act of 28 July 1983.
Under this act, if the subject matter of the act in which a notary participates involves inter alia disposal of property obtained through inheritance, gift or bequest, the notary may conduct such activity only after the notary has first been presented with:
- Written consent of the head of the tax office, or
- A certificate issued by the head of the tax office confirming that (i) the acquisition was free of tax, (ii) the tax due was paid, or (iii) the tax obligation is time-barred
The foregoing list of consents and formalities required for the effectiveness of transactions is not intended to be exhaustive. In addition to the issues addressed above, under the specific conditions of the given transaction it may be necessary to comply with other requirements under generally applicable law, as well as contractual or organisational requirements