Three established a business and entered into a partnership agreement, under which it was agreed that a company will be established and only one of them will be registered as a shareholder. The company accumulated a municipal tax debt and the municipality demanded that the shareholder and the other partners pay the company’s property tax debt personally
The Court held that under certain circumstances a local municipality may collect a city tax debt directly from the controlling shareholders of a private company, where a controlling shareholder is defined as any person holding 10% or more of the shares. For example, when the company is liquidated or discontinued its business activity without paying the tax debt, it can be viewed as if the company transferred its assets to the controlling shareholders without consideration and the tax debt can be collected from them. In this case, the company operated as a kind of partnership and after it ceased its activity, it did not pay for the municipal taxes. After a while, the sole shareholder of the company retired from the partnership. The Court ordered the shareholder and his partners to pay the company's city tax in accordance with their holdings stipulated in the partnership agreement. As of the date of the retirement of the shareholder, the other partners will bear the full debt of the payment as they have the closest link to the property.