How to dissolve a limited partnership if one partner doesn’t want to
How to dissolve an LLC. if a partner does not want to
A situation that occurs more frequently than we think is that of “blocking” when dissolving a limited liability company ( hereinafter, S.L.). For the dissolution to be a problem, the company must be constituted in such a way that the shares of its partners can give rise to a situation of blocking due to lack of agreement between the partners when they participate in the same percentage, that is, 50% of the shares. shares against the other 50%.
What can we do if it is an S.L. with two partners who participate in it at 50%?
As an elementary basic advice, it is not advisable to set up a company with a 50% distribution of shares among the partners, it being preferable that the distribution of shares is carried out in such a way that we cannot find ourselves in the situation of infinite tie.
If the company is already in a blocking situation, we have three ways to solve the problem. In the first place, the statutes of the company must be reviewed, in case they have contemplated any cause for automatic dissolution. Failing this, an agreement must be reached at the General Meeting. Finally, and always as a last option, you can go to court, where a judge will determine whether or not the dissolution proceeds.
The Consolidated Text of the Capital Companies Law establishes, in its article 360, as full-fledged causes of dissolution:
- The course of the term of duration established in the statutes. In other words, when the company has been incorporated for a defined period of time, unless an extension has been registered in the Mercantile Registry before said date.
- The reduction of the share capital below the legal minimum, set at €3,000.00, if one year after it has not been increased to the legal minimum.
In these cases, the registrar, at the request of any interested party or ex officio, will be in charge of recording it on the sheet open to the company in the Commercial Registry, its dissolution.
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Regarding the dissolution agreed at the General Meeting, in the aforementioned law, specifically in its article 363, the causes of dissolution are established:
- Cessation in the exercise of the activity that constitutes the corporate purpose, which will be understood to have occurred after a period of inactivity of more than one year.
- Conclusion of the company that constitutes its object.
- Impossibility of achieving the social purpose.
- Paralysis of corporate bodies, so that the functioning of the company is impossible. In this case, the fact that 50% of the company shares are in conflict with the other 50% could fit, so that the corporate bodies would find themselves facing a blockage in their operation.
- If the company has losses that reduce the net worth to less than half of the share capital.
- If the share capital is reduced below the legal minimum.
- If the nominal value of the non-voting shares is greater than half of the paid-up share capital, provided that the proportion is not restored within two years.
- For any reason established in the bylaws of the company.
In the event of opting for the resolution of the General Meeting, the dissolution of the company will require that it be approved by the ordinary majority. Any partner may request from the administrators of the company the call of the General Meeting if they consider that any of the causes of dissolution concur. The administrators must convene it within two months.
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If, at this point, none of the above assumptions is applicable to the situation of your company and you are still interested in its dissolution with the opposition of your partner or partners, you will not have no choice but to go to court, the judge being in charge of assessing the reasons and making the decision on the dissolution of the company after carrying out all the pertinent tests in this regard.
It should be noted that before making the dissolution of a company effective, it is necessary to meet certain requirements such as: not having debts of any kind with the Administration (taxes, Social Security,… ), you do not have to have debts with suppliers and creditors. In addition, the assets available to the company after making all pending payments must be distributed among the partners.
Once these requirements have been met, you can go to the notary or to court (in the case of disagreement between the partners) to make the liquidation of the company effective.
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Regarding the fiscal impact of company dissolution, in general, four taxes must be taken into account:
- Corporate Tax: The assets owned by the company and that will be distributed among the partners must be valued at market price, integrating the difference between their market value and book value.
- Personal Income Tax: The assets of the company that are distributed among the partners will mean an increase in their savings base that must be declared by said partners.< /li>
- VAT: The assets that are transferred to the equity of the partners are taxed with this tax.
- Tax on Patrimonial Transfers and Documented Legal Acts: the assets and rights of the company will be taxed at 1%, since its dissolution is also understood as a corporate operation.< /li>
Alba Sacido
Member of the Commercial Law Department
11/08/2019
