Article

On October 22, 2019, the National Council of the Slovak Republic approved Bill No. 390/2019 Coll., amending Act No. 513/1991 Coll., the Commercial Code, as amended, and amending certain other acts. This amendment to the Commercial Code, effective as of October 1, 2020, significantly impacts several areas of commercial law. In this article, we will outline some of the key changes that may affect you as well.

Liquidation of a Company

• In our opinion, the most significant change introduced by this amendment concerns the process of liquidation and dissolution of a company.

1. Under the new rules, a company enters liquidation only upon the entry of the liquidator in the Commercial Register, whereas under the previously applicable legislation, the decisive moment was the dissolution of the company, i.e., the decision of the general meeting or the court to dissolve the company.
2. Closely linked to liquidation is the obligation to deposit an advance for liquidation in the form of funds that may be used to cover expenses and the liquidator’s remuneration. This advance will be deposited in notarial escrow. The amount of the advance has been set at 1,500 EUR.
3. Once the company enters liquidation, the liquidator is required to immediately notify all known creditors of this fact and invite them to file their claims, and is also required to publish such a notice. Following the amendment to the law, the court will be authorized to order the liquidator to repeat the call for the filing of claims.
4. Within 45 days of the company entering liquidation, the liquidator is required to prepare a list of the company’s assets and a list of the company’s claims, and both of these lists must be filed with the registrywithin the same timeframe.
5. Upon the company’s entry into liquidation, all of its unilateral acts—such as powers of attorney, procurations, authorizations, and various others—shall cease to exist. The sole exception remains powers of attorney for representation in court proceedings—these are not affected by the amendment and remain in force even after the company enters liquidation.
6. The previous legal framework did not establish a minimum duration for the liquidation process in any way. However, with this amendment, the legislature has stipulated that liquidation may only be concluded after six months have elapsed from the date the company enters liquidation.

Consent of the Property Owner

• This amendment also introduces an additional bureaucratic burden, specifically in the form of the requirement for an officially certified signature of the property owner (co-owners) for the registration of this property as the company’s registered office in the Commercial Register.

Paper Versus Electronic Format

• According to this amendment, starting October 1, 2020, the Commercial Register and the Collection of Deeds will operate exclusively electronically, meaning that any submissions will be admissible only in electronic form and via the designated forms. All necessary attachments must also be submitted electronically. Objections to the refusal of registration will also be filed only electronically.

Personal Data

• As of October 1, 2020, it will be mandatory to enter the birth number or, if a person has not been assigned a birth number, the date of birth into the Commercial Register. However, this information will not be published. If you do not have such data entered in the Commercial Register, you must do so when filing your next application for registration, no later than September 30, 2021.

UPDATE: The aforementioned deadline was subsequently extended by an amendment to the law until September 30, 2022.

Restrictions on the statutory body’s authority to act

• Any restrictions on the statutory body’s authority to act will no longer be registrable in the Commercial Register; therefore, limiting actions to a specific monetary amount or disposing of real estate subject to the approval of the general meeting will no longer be possible. Similarly, by September 30, 2021, statutory representatives will be required to bring the entry of this information in the Commercial Register into compliance.

Impact of Enforcement Proceedings on Business Operations

• A person against whom enforcement proceedings are pending will not be able to become a managing director or a partner in a limited liability company. Likewise, they will not be able to transfer their business share to another partner or another person, nor acquire another business share.

Dissolution of the company

• If the company fails to file its financial statements with the Commercial Register within 9 months of their preparation, it will be in default. If the company is in default for more than 6 months, the court will order the dissolution of the company. Another ground for dissolution is a situation where the company’s governing bodies are not established in accordance with the company’s founding documents. If, according to the articles of association, the company is required to have two managing directors, but only one managing director has been appointed for more than three months, this constitutes grounds for the ex officio dissolution of the company.