Prohibiting the transfer of shares in a limited liability company

6. September 2018

In a decision on September 19, 2017 (file no. 29 Cdo 5719/2016), the Czech Supreme Court held that shareholders in a limited liability company were free to conclude a Memorandum of Association which absolutely prohibited the transfer of their shares to other shareholders or third parties. This provision would mean the shares were non-transferable.

Such a ban was not permitted, however, if the stock in question were certificated shares. In that case, the transfer could not be prohibited or even limited in any way.

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