Judgment of Supreme Court, Civil Chamber

23 January 2009

Case No. III CSK 271/08

Invalidity of share transfer agreement

Effect of entry of shareholder in register despite invalidity of share transfer agreement

1. Invalidity of an agreement is effective against all persons in the sense that any interested person may rely on the invalidity or assert it as a defence or as grounds for a claim.

2. Under Supreme Court Resolution of 22 September 1993, Case No. III CZP 118/93 (OSNC 1994 No. 5 item 99), the court should refuse to accept a new list of shareholders for the register of a limited-liability company if the change in shareholders is based on an invalid share transfer agreement.

3. Although an entry in the share ledger is only declaratory in nature and does not vest the party with the rights of a shareholders, nonetheless a party entered in the share ledger is a shareholder vis-a-vis the company and has a right to share in the profits (Commercial Companies Code Art. 191).