Three shareholers in a company operated under a detailed shareholders agreement that included a separation mechanism in case one of them retires. Later, the shareholders established another company for a separate business activity, but did not sign a new shareholders agreement for it. When one of them retired from the activity upon reaching retirement age, the two remaining demanded that the separation mechanism from the original agreement be applied to his shares in the later company.
The Court found that the separation mechanism applies only to the first company. As a general principle, a company is a separate legal entity. Therefore, agreements of one company do not automatically transfer to another company, in the absence of an explicit provision in the new company's articles of association or in the set of agreements, even if the shareholders are the same. Here, the shareholders established a new company without incorporating the previous shareholders agreement into its documents. Consequently, the separation mechanism stipulated in the original contract does not apply to the subsequently established company. Thus, the retiring partner is obligated to sell his shares in the first company, but remains a shareholder in the second one.