Abstract
The Business Corporations Act introduced changes to the way free business shares and settlement shares in the Limited Liability Company (""spolecnost s rucenim omezenym"") are regulated. Under this new regulation, the free business share does not belong to the company itself, but to the member who left the company.
The leaving member is entitled to receive the proceeds from the sale of his share. However, according to the statute, he is also entitled to receive a settlement share.
It is not clear which of these rights should be subject to taxation. We suggest that the legislator chooses one of two concepts.
If the business share remains a property of the leaving member, he should be entitled to the proceeds from its sale. If the ownership of this share is transferred to the company or if the share is canceled, the leaving member should receive a settlement share.
A related problem arises regarding unwanted tax benefits granted to those former members who have outstanding debts against the company. We suggest the elimination of these benefits by changing the text of the Business Corporations Act.