The amendment to the Commercial Code, effective as of October 1, 2020, brought about many significant changes. One of these was an amendment concerning organizational units of companies. In addition to simplified designation of organizational units—where a branch or other organizational unit of a company will no longer be registered in the Commercial Register as a separate category of organizational units—the amendment also introduces a change regarding the ex lege removal of entities from the Commercial Register.
As we mentioned in our previous article, on September 22, 2019, the National Council of the Slovak Republic passed Act No. 390/2019 Coll., amending Act No. 513/1991 Coll. the Commercial Code, as amended, and amending and supplementing certain laws. This amendment, effective as of October 1, 2020, significantly impacts various areas of commercial law. One of these is the legal status of an organizational unit of an enterprise, which is the subject of this article.
The amendment to the provisions of the Commercial Code (Section 7) defines the term “organizational unit of an enterprise” as follows: “(1) An organizational unit of an enterprise means an organizational unit of an enterprise under this Act or a special act. When operating an organizational unit of an enterprise, the business name of the entrepreneur is used with the addition that it is an organizational unit of the enterprise. (2) An organizational unit of a legal entity may be entered in the Commercial Register upon application.”It follows from the above that the amendment simplifies the designation of organizational units, whereby a branch or other organizational unit of an enterprise will no longer be entered in the Commercial Register as a separate category. Branches or other organizational units of an enterprise that are already registered in the Commercial Register under the current provisions of the Commercial Register Act will continue to be considered organizational units of the enterprise. It further follows from the cited provision that there is no legal obligation to register an organizational unit of an enterprise in the Commercial Register. This means that the registration of an organizational unit of an enterprise in the Commercial Register will be voluntary.
However, the amendment also introduces a change regarding the deletion of entities from the Commercial Register. This applies to entities:
- originally registered in the Commercial Register, natural persons, enterprises, and organizational units of enterprises owned by foreign natural persons,
- which entered liquidation before October 1, 2016, and are presumed to be in bankruptcy if the liquidator fails to fulfill the obligation introduced by the amendment to file a list of assets in the collection of documents by December 31, 2020,
- that have not fulfilled the obligation to convert the nominal value of contributions and the nominal value of share capital from Slovak korunas to euros by December 1, 2020,
- enterprises of foreign legal entities, organizational units of enterprises of foreign legal entities, and organizational units of enterprises of Slovak legal entities that fail to confirm the data entered in the Commercial Register or propose a change to the data entered in the Commercial Register in accordance with a special law by September 31, 2021.
It clearly follows from the above that entities wishing to have their organizational units registered in the Commercial Register must confirm the registered data or propose a change to the registered data in accordance with a special law by September 30, 2021. Otherwise, the organizational units of foreign legal entities and the organizational units of Slovak legal entities, along with the data pertaining to them, will be deleted from the Commercial Register as of September 30, 2021.
The team at Hronček & Partners, s. r. o. is ready to provide you with comprehensive legal services in this area. Please feel free to contact us at any time.
