Unless the s.r.o. has a sole shareholder, a declaration of bankruptcy over a shareholder’s assets has the same effect as court termination of their participation. The same applies if bankruptcy proceedings are discontinued or the petition is refused for insufficient assets. Participation ends and a settlement claim enters the bankruptcy estate instead of the share. If bankruptcy is later cancelled for other reasons and the company has not yet disposed of the share, participation may be restored.
How does bankruptcy affect the shareholder’s position?
A shareholder’s personal bankruptcy significantly affects their participation in the company. Under Section 148(2) of the Commercial Code, unless it is a single-member company, a declaration of bankruptcy over the shareholder’s assets has the same effect as court termination of their participation. The same applies if bankruptcy proceedings are discontinued for insufficient assets or a bankruptcy petition is refused because the shareholder lacks sufficient assets.
What happens to the business share?
Participation ends by law, and the share is dealt with under the rules for a released share (Section 113(5) and (6)). It passes to the company, which may transfer it, or share capital is reduced. A right to a settlement share arises instead (Section 61(2) and (3), and Section 150), representing the monetary value of the participation and becoming an asset available to creditors in bankruptcy.
Can participation be restored?
The law also addresses bankruptcy ending differently from expected. If bankruptcy over the shareholder’s assets is finally cancelled for reasons other than completion of the distribution order or insufficient assets, and the company has not yet disposed of the released share, the shareholder’s participation is restored. If the company has already paid the settlement share, it is entitled to repayment (Section 148(4)). The same rule applies as appropriate when enforcement is discontinued.
What to keep in mind
The position differs for a single-member s.r.o., where this automatic mechanism does not apply. In every case, the changes must be correctly reflected in the Commercial Register and deadlines observed. We help with Commercial Register changes, any transfer of the released share, and disputes over the settlement through shareholder dispute resolution.
This answer provides general information on the law as at 17 August 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
