Donation of shares of a limited liability company (SARL / EURL)

Verified 09 September 2026 - Entreprendre Service Public / (Prime Minister)

The donation of shares consists for a partner (the donor) in transferring to a beneficiary (the donee) the rights he holds in the share capital of the company. This operation must comply with a number of steps and conditions.

Step-by-step approach

Where the donation is made to a heir apparent of the donor, it may take the form of a simple donation or of a donation-sharing.

They are both donations, i.e. transmissions during the donor's lifetime (unlike a legacy for example).

Warning  

A donation of shares must be made by deed notarial. It cannot therefore be granted by means of a manual donation.

Where possible, the donation-sharing includes certain advantages and particularities, in particular :

  • It constitutes an early division of the donor's estate, during his lifetime: the assets are thus allocated in advance. This limits possible conflicts linked to an indivision and facilitates the settlement of the estate upon the death of the donor
  • The attribution to the donee is final and may not be the subject of report when settling the donor's estate
  • It is a hybrid act comprising a donation and a sharing but this sharing is generally exempt from taxation (sharing rights). Only the donation is subject to the donation rights, thus allowing a fiscal economy.

Donation-sharing, however, involves some constraints :

  • It can only be granted for the benefit of heirs presumption the donor, or the children of such heirs
  • It is not possible to donate property undivided by means of a donation-sharing
  • It is preferable to make a donation-sharing egalitarianin which each heir-apparent of the donor (usually his or her children) receives property of equal value. For example, a person who does not receive the shares may receive a sum of money of the same amount.

When the donee is not presumptive heir, only simple donation is possible.

Example :

When a donor with two children gives his shares to a brother or an uncle, only the simple donation is possible. The children of the donor are indeed heirs presumption because they are online direct. As such, they have priority over online heirs collateral (brothers and sisters, uncles and aunts, nephews and nieces, cousins...).)

1Verification of the requirement for an approval

The rules vary depending on whether the donee is already a partner or not.

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Donation to an Associate

In SARL, the shares are freely transferable when they are made for the benefit of a partner. No approval is therefore not required if the donor gives his shares to a person already associated.

However, the statutes of the business may contain a approval clause. This means that the donation between partners is then subject to the approval of the other partners (by means of a decision taken according to the statutory terms (majority or unanimity).

Donation to a third party at the business

Under the rules on accreditation, any person who is not associated step is considered a third party at the business (it can be a person unrelated to the business, or even an employee or manager of this business).

Any donation of shares granted to a third party to the business must therefore be approved.

By exception, some third parties to the business are dispensed of approval:

  • The donor's spouse (spouse). Entered into a civil partnership partners and cohabiting partners are therefore not exempt from accreditation
  • One ascending of the donor (parents or grandparents for example)
  • One descendant of the donor (a child, grandchild, etc.)

It is nevertheless possible to provide in the statutes that the latter are the subject of an approval procedure.

Warning  

Where the donor is married under the legal community or entered into a civil partnership under indivision, the donation of shares can be canceled within 2 years from the donation if the spouse or partner has not authorized it. In practice, this authorization is given directly in the deed of donation.

2Notification of the donation project

The draft donation must be notified to the businesses (i.e. to his legal representative) and to each partner individually, or by meaning, or by LRAR: titleContent.

This notification can be made by both the donor and the donee.

It shall also contain at least the following information:

  • Identity and address of the donee
  • Number of shares given

3Decision of the business

Consultation of partners

Following the notification of the donation project, and within a maximum of 8 days, the partners are in principle called by the manager at a general meeting (or consulted in writing if the articles of association so provide).

Authorization to approve a donee is valid only if it is decided at a double majority :

  • The decision must be made by a majority of partners (in number). The transferor is then entitled to vote
  • These partners must hold at least half of the shares.

This rule also applies to approvals provided for in the articles of association in the case of donations to a spouse, ascendant or descendant (it is also possible in this situation to provide for a smaller majority).

Authorization or refusal to authorize the donee

In order to be valid, approval or refusal must comply with certain rules and conditions.

Approval shall be granted

Approval must be given in clear, unambiguous terms and in a unconditional (partners may not make their approval conditional on any requirement).

Approval shall cover the total shares the donation of which is envisaged (unless the donor and the donee)

The approval decision must be preserved in order to be able to justify compliance with the approval procedure. In practice, it is generally observed in a minutes of general meeting or in the document noting the consultation of the partners.

Please note

The transmission may also be considered to be approved where the business has not made known its decision within 3 months of the notification (or within the period possibly extended by the court). This is referred to as accreditation unspoken. The donor can then continue the operation as if the partners had formally approved it.

Approval is refused

When associates refuse to approve the donee proposed, they must, within 3 months of the refusal, have the shares bought back by one or more partners, by an approved third party or, with the consent of the donor, by the business itself with a view capital reduction (the securities are then redeemed for cancelation).

The repurchase price shall be fixed by mutual agreement between the parties. In case of disagreement, it is determined by an expert.

The period of 3 months may be extended only once per court decision, without this extension being allowed to exceed 6 months.

If no redemption occurs within these deadlines, the donor can make the donation initially envisaged.

Warning  

When the donor has held his shares for less than 2 years, the partners or the business shall not be obliged to buy them back in the event of refusal of authorization, unless otherwise provided for in the articles of association.

Whether or not the approval is granted, the decision of the partners must be notified to the donor by LRAR: titleContent.

Response Time

From the notification of the draft donation, the business has a period of 3 months to answer.

FYI  

The statutes may provide for a shorter period in the case of a gift to the spouse (spouse), ascendant or descendant.

This period may be extended only once per court decision, without this extension being allowed to exceed 6 months.

In the absence of a response after the deadline, the donation is considered to have been approved (acceptance unspoken).

The deed of donation of the shares must be drawn up in the form authentic (by a notary), on pain of nullity.

The notarial deed must contain certain mandatory particulars :

  • Names of parties
  • Identity of the business
  • Number and designation of shares given (if numbered)
  • Value of shares
  • Details concerning the approval of partners

A donation of shares involves the transmission of a active, but also of a passive (this corresponds to the debts of the company). The donor thus assigns his rights but also his obligations.

In this context, it is possible to provide for contractual warranty clauses obliging the donor to guarantee accuracy all information provided during the donation. Such a clause commits him to carry out a compensation in the event of an error which may have led to a decrease in the value of the shares given.

Please note

Even in case of transmission without price (a donation), the valuation of shares is an important parameter because it determines for example the amount of any donation rights.

Beneficiaries of guarantee

Although a guarantee clause generally benefits the donee, it is not the only one who can benefit from it: 3 people can indeed claim compensation under a guarantee clause:

  • The donee
  • The business whose securities are given (the business could thus act under this clause and deduct from its outcome the costs associated with possible legal proceedings)
  • One creditor business (for example, the guarantee clause may stipulate that compensation consists in paying the creditor directly if a debt was not included in the company accounts at the time of the donation).

Purpose of the guarantee

For example, the donor may provide a contractual guarantee that the declared assets or liabilities are accurate, that the claims identified as recoverable are accurate, or that the social security contributions due have been paid.

The warranty may cover all information concerning the company and which may have a impact on the valuation of securities transferred : parent company accounts, customers and suppliers, volume of payroll expenses, possible equity investments in other companies, ongoing litigation...

Guarantee of liabilities

In the event of the transfer of shares, the beneficiary bears a major risk. It can indeed see a passive originating in an event whose cause is earlier the transfer (e.g. a fine related to a tax adjustment in progress at the time of the donation), and with the consequence that decrease the value of the securities received.

To be valid, a liability guarantee clause must comply with all of the following conditions :

  • It cannot guarantee that the debts (whatever their origin, legal or contractual)
  • The secured debt must be earlier on or before the date on which the reference accounts were drawn up (those from which the value of the securities was contractually determined)
  • Debt must not be included in accounts to which the donee was able to access (even if the donee was aware of this debt). However, it is possible to provide that the mere knowledge of a debt not entered in the accounts prevents the donee from activating the guarantee.
Asset Guarantee

Such a guarantee allows the donee to be compensated when the registered assets declared at the time of the donation were overvalued due to a cause earlier on transmission, if this error results in decrease the value of the securities received.

It may for example be a fixed asset incorrectly assessed on the balance sheet, the rejection by the tax authorities (after transmission) of a tax credit entered in the accounts of the business at the time of the donation, or any assets on the balance sheet that do not actually exist.

To be valid, the asset guarantee clause must relate to a active business, and guarantee decrease of assets whose origin is an event earlier to transmission.

Drafting of a guarantee clause

The drafting of the guarantee clause directly conditions its efficiency. The inclusion of certain information is strongly recommended, including the following:

  • Reference date : the date before which the cause of a decrease in the asset or an increase in the liability is considered to have occurred prior to the donation. This date is often the date of transmission, but not exclusively (for example, the parties may decide that the reference date is the date on which the parent company accounts allowing the valuation of the securities were drawn up).
  • Beneficiary of guarantee : the secured person may be the donee, the business or even a creditor
  • Duration of the clause: it may vary in practice between a few months or several years
  • Calculation compensation: the proportion of the decrease in liabilities or assets that the guarantor (the donor) undertakes to assume. This proportion may decrease over time
  • Floor amount guarantee: the amount of damage from which the guarantee may be invoked
  • Ceiling amount compensation: the maximum amount of compensation that the donor undertakes to pay. Beyond this amount, the damage is not covered by the guarantee clause
  • Implementing arrangements : this information specifies how the guarantee can be activated by its beneficiary (justification of the liability, methods of sending the claim for compensation...))

Transmission of guarantees in the event of a donation

In case of donation of shares, the donor has the possibility to transmit to the donee a guarantee of liabilities from which he was able to benefit under the terms of the initial deed of acquisition. The liability guarantee may be transferred even if the initial act did not provide for this possibility.

The tax administration collects a tax when a donation is made: these are the registration fees (also called donation rights or free transfer tax).

Donation fees are in principle due by the beneficiary of the donation (the donee). However, the donor has the option to take them at his expense, without this additional advantage being considered for tax purposes as a gift.

The amount of these donation rights is determined by different parameters:

  1. Value of the donation
  2. Amount of contingent liabilities abatements to be deducted
  3. Tax rate of the donation

The amount of the allowance and the tax rate vary depending on the relationship between the donor and the donee. The tax rate also varies depending on the amount given.

Example :

A partner wishes to give his son corporate titles for a total value of €320,000.

In this situation:

  • The abatement of €100,000 applies. The taxable amount is therefore reduced to 320 000 - €100,000 = €220,000.
  • The tax rate shall be 20%.

The transfer duties therefore amount to 20% from €220,000, or €44,000.

Additional discounts may apply in 2 special cases :

Dutreil Pact

The transmission of family companies is facilitated by the Dutreil system, which entitles the partial exemption donation rights, up to 75% the value of the securities transferred.

In other words, only a quarter (25%) of the value of the company will be taken into account in calculating the amount of donation rights.

A Dutreil Pact may be concluded when the 4 cumulative conditions the following are combined:

  • Conclusion with one or more partners of a collective commitment to conservation securities, for a period of at least 2 years. We are talking about commitment unilateral of conservation when taken by a single partner. This commitment must be in progress at the date of transmission. In addition, it must cover at least 17% financial rights and 34% voting rights of the business.
  • Each beneficiary of the donation commits individually to keep the securities transmitted during 6 years. This period shall start to run from the date of expiry of the conservation commitment made by the donor.
  • One of the beneficiaries or one of the partners signing the conservation commitment (collective or unilateral) must practice in the business and for 3 years sound main activity (or a function of leader in the case of a business submittedIS: titleContent). This period shall start to run from the date of expiry of the conservation commitment made by the donor.
  • The company exercises a industrial, commercial, craft, liberal or agricultural activity. This condition must be met from the conclusion of the 2-year collective conservation commitment until the end of the 4-year individual conservation commitment by each of the beneficiaries.

The Dutreil device also benefits businesses holding animators whose main activity is active participation in the conduct of their group’s policy. On the other hand, companies that have as their object the management of movable or immovable assets (for example, SCI) are excluded of the device.

Please note

This advantage is combined with the legal allowance to which the recipient of the donation is entitled (the amount of this allowance depends on his relationship with the donor).

Early transmission

Where the donor has under 70 at the time of transmission, an additional reduction of 50% a transfer tax applies on the taxable portion of the gift. The application of this reduction is however only possible if the donee undertakes to keep a number of shares for a period of at least 2 years.

Example :

A 67-year-old partner wishes to give his son corporate titles for a total value of €320,000.

In this situation:

  • The abatement of €100,000 applies. The taxable amount is therefore reduced to 320 000 - €100,000 = €220,000.
  • The tax rate being fixed, in that situation, at 20%, transfer duties shall be €44,000 ( 20% from €220,000).

With the application of the reduction of 50%therefore, the fee payable is the sum of €22,000.

This reduction can be combined with any reductions and the benefits of the Dutreil Pact.

The donation of shares must be recognized by a authentic act. The act is null if this condition is not met.

The tax registration of the donation is therefore directly carried out by the notary to the competent tax authorities (registration tax department or land advertising and registration service).

It is also on this occasion that the notary pays the donation fees (if any) on behalf of his clients.

A donation of shares leads to a new distribution of shares between the members and therefore implies the obligation to edit statuses.

FYI  

Mandatory declaration at the company counter following the amendment of the statutes conditions the enforceability of the donation with regard to third parties.

This approach is broken down into 3 steps: consult and have the partners vote, draw up a record of decision and update statuses.

Consult and vote the partners

In order to amend the articles of association, the decision must be taken by the members, generally in the context of a general meeting, or, in the case of a single-person business, by the sole shareholder.

Please note

The statutes may authorize a statutory amendment to be made by means of a written consultation associates (i.e. a vote by post) or even a act establishing the consent of all partners.

In the event of a general assembly, it must first be convened by the manager of the business.

Once the meeting is regularly convened, the decision to amend the statutes must be adopted according to the majority rules provided for by law or by the statutes.

The rules for adopting a decision vary depending on whether it is an SARL or an EURL:

SARL

In a limited liability company (SARL), the decision to amend the articles of association must be voted on and approved by the members meeting in Extraordinary General Meeting (AGE). When the amendment of the statutes is not adopted at the first meeting, the members are then consulted a second time, in order to allow a new deliberation.

  • For SARL created before August 4, 2005 :
    The decision to amend the statutes of an SARL shall be approved by the partners representing at least the 3/4 of the shares, without any quorum is not required. In other words, no minimum number of members present is necessary for the meeting to be able to deliberate validly.
  • For SARL created after August 4, 2005 :
    The general meeting may validly deliberate only if the members present or represented hold at least 1/4 of the shares at the first meeting, and at least 1/5 of these during the second. If these thresholds are not reached, a new meeting must be convened within a maximum period of 2 months. When a quorum is respected, the decision to amend the statutes must then be taken by a majority of 2/3 of the shares held by the partners present or represented.

Once the resolution is adopted, it must be recorded in a minutes.

It is then necessary to update statuses replacing the old entries with the new ones.

Please note

For more information, see our factsheet on the decision-making in an SARL.

EURL

To change the statuses of a Limited Liability Single Person company (EURL), the decision shall be taken by the single member, who shall exercise all the powers normally conferred on the members of a multipersonal SARL.

The sole shareholder therefore takes the decision to amend the articles of association alone, without quorum or majority requirement.

The manager, whether or not he is the sole shareholder, cannot decide himself to amend the articles of association. However, it may take certain management decisions provided for by law, such as the transfer of the registered office to the same department or a neighboring department, but this decision becomes effective only after ratification by the sole shareholder. In the absence of validation by the latter, the statutory amendment cannot be carried out.

Once the decision is adopted, it must be recorded in writing in a unilateral decision-making document (also known as a unilateral decision of the sole shareholder), document in lieu of minutes of general meeting.

It is then necessary to update statuses replacing the old entries with the new ones.

Draw up a record of decision

The rules for writing a record of decisions differ depending on whether the business is multipersonal (SARL) or single-person (EURL).

multipersonal business

In the multipersonal businesses, decisions amending the statutes shall be recorded in a minutes of general meeting.

The minutes shall include the following information :

  • Date and place of meeting
  • Terms of convening
  • Agenda
  • Identity of the session chair
  • List of partners present or represented with the indication of the number of shares or shares held by each
  • Documents and reports submitted to the Assembly
  • Summary of the discussions
  • Text of resolutions put to the vote (subjects on which decisions are to be taken)
  • Detailed results of votes
  • Mention of the articles of association concerned by the amendment and indication of their new wording
single-person business

In the single-person businesses, there is no meeting, no convening of partners, and no vote to be organized.

The amendment of the statutes results from a unilateral decision of the sole shareholder, which must simply be established in writing.

This decision must be dated, signed and recorded in the register of decisions of the sole shareholder.

The unilateral decision of the sole shareholder shall include the following information :

  • Identity of the sole partner
  • Decision adopted
  • Mention of the articles of association concerned by the amendment and indication of their new wording

Update statuses

Once the decision to amend the statutes has been adopted, the statuses must be updated to take account of the new distribution of shares between shareholders.

It is appropriate to amend the article of the articles of association relating to the distribution of shares in order to indicate the identity of the partners after the donation as well as the number of shares held by each.

Please note

The donation of shares does not change the amount of the share capital. Only the distribution of shares among the partners is updated.

Once the changes have been made, the updated statuses must be dated and certified as true to the original by the legal representative of the business.

Warning  

The amended statutes must be filed at the registry of the commercial court (regardless of the statutory amendment). This process is carried out via the company formalities window.

Publish a legal ad in a legal ad medium, if necessary

The obligation to publish a legal announcement in a legal announcement medium (Shal) does not apply to all statutory amendments.

Only certain amendments imply such an obligation: this is the case, for example, of a change of manager, or a change of corporate purpose.

The notice is then published in a Shal: titleContent of the department of head office of the business.

Publication must be carried out within a period ofone month from the decision to amend the statutes.

The notice of publication shall contain the following items :

  • Reason or corporate name
  • Legal form
  • Share capital
  • Social object
  • Address of head office
  • Location and registration number at RCS: titleContent or at RNE: titleContent
  • Decision or minutes of the general meeting dated and signed
  • Description of the statutory changes subject to disclosure (e.g. change of manager, change of corporate object or corporate name). The donation of shares, in itself, does not have to be mentioned in the legal announcement.

FYI  

Once the publication is completed, a certificate of publication the notice of amendment shall be issued. This is one of the documents to be sent to the companies' formalities desk in the amendment file.

The donation of shares usually results in a editing of beneficial owners business.

FYI  

The beneficial owner is a person who meets at least one of the following conditions:

  • It holds, directly or indirectly, more than 25% voting rights or business capital.
  • It exercises a power of control over the latter by any other means (such as, for example, the power to appoint or dismiss a majority of the members of the management bodies).

In this case, a amending declaration of beneficial owners must be deposited at the companies' formalities desk.

This declaration is mandatory when a natural person acquires or loses control of the business, or when his holding percentage exceeds the threshold of 25% capital or voting rights.

That is the case if the holding percentage changes :

Example :

Before the transfer, Mr X holds 20% and Ms Y 80%. After the sale of shares, Mr X holds 30% and Ms Y 70%.

The beneficial ownership statement needs to be updated as Mr. X's percentage of ownership has evolved and it is becoming beneficial owner.

A declaration of beneficial ownership may also be required when the holding percentages remain the same, but the persons holding the shares change :

Example :

Before the transfer, Ms Y holds 70% of capital and Mr X 30%. Ms Y sells all her shares to Mr Z, who now holds 70%, while Mr X retains 30%.

The beneficial ownership statement needs to be updated to replace Ms. Y with Mr. Z, without changing the ownership percentages.

Warning  

Failure to comply with this reporting obligation may result in severe penalties of up to delisting business.

After the signing of the deed of donation and the amendment of the statutes, the business must complete certain mandatory formalities to return the donation enforceable with regard to business but also with regard to third parties.

Opposability with respect to the business

Third-party effectiveness against business for example, allows the donee to assert his status as a member, and to benefit accordingly from all the rights attached to it (voting rights, right to dividends...))

In the SARL, this third-party effectiveness can be achieved in several ways:

  • Either by means of a meaning by extra-judicial act of the donation to the business
  • Either by having the donation accepted by the manager directly in theauthentic act
  • Either by filing an original of the deed of donation at the registered office (against the delivery of a certificate by the manager)

Third-party effectiveness

This third-party effectiveness allows the donor to no longer be considered as a partner with regard to third parties. As a result, for example, the donor is no longer liable for the debts of the business to the creditors.

The process for making the donation enforceable against third parties breaks down into several steps:

  • Publish a review in a support for legal announcements (in some cases),
  • Declare the change on the company formalities window

In the absence of publication of these statutes by the manager, the donor or the donee may, after formal notice from the manager and referral to the commercial court, make themselves the deposit of these statutes to the RCS via the company formalities window.

The declaration of the amended statutes at the formalities desk must be made withinone month :

Window of company formalities

The change folder must include the following supporting documents :

  • Copy of the minutes of the meeting which decided to amend the statutes
  • Copy of the articles of association updated in the article relating to the distribution of shares, dated and certified as true to the original by the legal representative
  • Certification of publication of the notice in a Legal Advertising Support (Shal) if necessary
  • Change declaration automatically generated on the company formalities window

Warning  

In an SARL, the partners are not listed on the registration certificate (extract RNE: titleContent or extract Kbis). Consequently, a change of partners does not, in itself, result in the updating of the registration certificate.

However, a new extract may be issued if other changes are declared simultaneously, such as a change of leader or updating the address of the manager, for example.

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