Legal Q&A · Company & shareholders

Can I apply to expel another shareholder from an s.r.o.?

Law as at 17 August 2026

Answered by , Czech and Slovak attorney, admitted to the Slovak and Czech Bars (SAK 300422 · ČAK 19654).

Short answer

You cannot apply personally as a shareholder. The company seeks court expulsion of a shareholder who seriously breaches their duties. A managing director acts for it, but shareholders whose contributions represent at least half the share capital must consent to the application. The offending shareholder must first have been called on to comply and warned in writing of possible expulsion. An expelled shareholder is entitled to a settlement share.

Who applies to expel a shareholder?

The common idea of simply removing a fellow shareholder runs up against the law. Under Section 149 of the Commercial Code, the company seeks court expulsion, rather than an individual shareholder acting personally. A managing director files for the company, but shareholders whose contributions represent at least half the share capital must consent. Without that consent, the application cannot be filed.

When will the court expel a shareholder?

The court may expel only a shareholder who seriously breaches their duties. A single trivial incident is insufficient; the breach should be repeated or continuing. The law also requires the shareholder to have been called on to comply and warned in writing of possible expulsion. These steps must be provable, making the demand and warning crucial. Failure to use the required written form may defeat the entire process.

What happens to the expelled shareholder’s share?

The share passes to the company and is handled under the rules for a released share (Section 113(5) and (6)). The company may transfer it, or share capital is reduced. The expelled shareholder becomes entitled to a settlement share (Section 150). This court-ordered expulsion differs from expulsion for failure to pay a contribution under Section 113, which has its own procedure.

How to proceed

Expulsion is a last resort involving uncertain litigation. Prepare the evidence and shareholder consent decision thoroughly before filing. We act through shareholder dispute resolution, prepare consent through our general meeting service, and establish preventive mechanisms, such as clear duties and sanctions, in the memorandum of association.

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.

More legal questions

All questions and answers
  1. Am I liable for company debts as an s.r.o. shareholder? The company answers for debts with all its assets. As a shareholder, you guarantee them only up to your unpaid contribution recorded in the Commercial Register. If the contribution is fully paid and its payment is recorded in the Commercial Register, you have no statutory guarantee liability for company obligations. Personal risk may arise separately from a guarantee signed for a bank or supplier, or from your role as managing director.
  2. Do I pay income tax when transferring or selling a business share in an s.r.o.? For an individual selling a business share, the difference between proceeds and acquisition cost or contribution is taxed as other income under Section 8 of the Income Tax Act. For shares acquired from 1 January 2004, the holding period alone generally does not confer an exemption; older shares are assessed under transitional Section 52(21). The standard exemption up to €500 and any historical limit must be checked against the date and method of acquisition. A legal entity has an exemption under Section 13c after holding at least 10% for 24 months. A gratuitous transfer is generally outside the recipient's income tax, and a business share transfer is not subject to VAT.
  3. How do I transfer a business share in an s.r.o. to another person? A business share is transferred by written transfer agreement. From 17 August 2026, the agreement must be a notarial deed or authorised by a lawyer; officially certified signatures were sufficient before then. Transfer to another shareholder normally requires general meeting consent. Transfer to someone outside the company is possible only if the memorandum of association permits it. Enforcement against either transferor or acquirer blocks the transfer. It takes effect against the company when the agreement is delivered to it.
  4. Must I pay tax on income from selling a business share in an s.r.o.? Generally, yes. An individual’s income from transferring a share in an s.r.o. or limited partnership, or cooperative membership rights, is other income under Section 8(1)(f) of the Income Tax Act. Tax applies to the difference between income and expenses, with the capital contribution or acquisition cost treated as an expense. A loss cannot be claimed, and the exemption is limited.

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Mgr. Patrik Tulinský, LL.M. Czech and Slovak attorney · SAK 300422 · ČAK 19654

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