A "Société civile particulière monégasque" (Monegasque private company) is a very effective estate planning tool and is widely used as such. When considering the involvement of minor children in these companies, several questions come to mind: can minors be shareholders? if so, what share of the capital can they own? and what powers to they have in relation to the company?
In Monaco, a minor's estate is protected by law. This is called "administration légale" (estate administration). The administrator represents the minor in all transactions, except in cases where it is customary for minors to act alone or in cases where the law specifically allows it. The administrators of the child's estate are the persons who have parental authority for them. As administrators, they are jointly responsible to protect and safeguard the interest of the minor.
Depending on the nature of the transaction and the consequences on the minor's estate, it may be necessary to obtain prior authorisation from the Family Court Judge ("juge tutélaire").
In some instances, the interests of the minor can conflict with the interests of the administrator. If that is the case, it is possible to make an application for the appointment of an "ad hoc administrator" who will act on a temporary basis.
Minors can be shareholders (minority shareholders or majority shareholders) of a private company "société civile" as it is not prohibited by law. The company articles must be signed by minor's legal representatives.
If a minor makes a cash contribution to the company's share capital, the Family Court judge's prior authorisation is not needed. However, if the minor's contribution is real estate registered in their name, rather than cash, prior authorisation from the judge is needed.
Often, adult shareholders wish to gift some of their shares to their minor children. Monegasque caselaw states that in such transaction, an ad hoc administrator must be appointed to represent the child in the transaction. The ad hoc administrator can then apply to the judge to accept the gift on the minor's behalf.
In that case, it was stated that the parent's position as donor conflicted with their role as representative of the minor child.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
