Did you know that the amendment to the Commercial Code will enter into force on October 1, 2020? This is an extensive amendment and business entities should familiarize themselves with it in advance, otherwise they risk deleting from the Commercial Register or blocking business transactions. The above-mentioned amendment includes several points, and we will explain several of them in the first part of the article concerning this amendment.

1. Agreement of the Real Estate Owner

Upon registration of the registered office of a legal entity, it will be required to have the signed and notarized agreement of the owner of the real estate. Because of the lack of transitional provisions, this requirement also relates to legal entities already registered in the companies register; they are obliged to provide this agreement by 30 September 2021 at the latest, with the exception of when they themselves are the owners of the real estate in which their registered office is located. In the event of failure to fulfil this obligation, the court may delete the company from the Companies Register even without a petition to that effect. In our opinion, an act formulated in this way breaches the prohibition of retroactivity. We are communicating with the Ministry of Justice of the Slovak Republic about the interpretation of this provision. We will inform you of the results on our website. 

2. Removal of the Term “Branch”

The term “Branch” (Slovak: “Odštepný závod”) is to be removed and the term “Organizational Unit of a Business of a Legal Entity” (Slovak: “Organizačná zložka podniku právnickej osoby” – also frequently translated as “Branch”). In the case of a Slovak company’s organizational unit, forming one will no longer require registration in the Companies Register. If the organization unit is formed by a foreign company, it is still required to register it in the Companies Register.

3. Authorization to Act

The limitation on the authority of a director to act on behalf of the company will no longer be entered in the Companies Register (e.g. that director XY is entitled independently to sign contracts up to a maximum of 100 000 euros). The ability to govern the manner in which directors act on behalf of the company will not be restricted (e.g. that two directors act together on behalf of the company). Companies that have a restriction on a director’s authorization to act registered in the Companies Register are obliged to cancel such a restriction by 30.09.2021 at the latest.

4. Deletion of a natural person from the Companies Register of the Slovak Republic.

The possibility for a natural person (a sole trader) to voluntarily register themselves in the Companies Register is abolished and natural persons already registered will be deleted from it. At the same time, branches and organizational units of foreign natural persons will also be deleted.

5.  Obligation to Communicate Electronically with the Companies Register

Submissions to the Companies Register will be made exclusively in electronic form. Submissions in other forms will not be considered.

6. Currency Conversion

Companies which, by 1.12.2020 have not fulfilled their obligation to convert the currency of their basic capital and shares from Slovak crowns to euros will be deleted from the register.

Warning! All obligations arising from the amendmentto the Commercial Code must be updated by the end of October 2022. Failure to meet the deadline may result in a fine of up to € 3 000, or deletion from the Commercial Register. Of course, our experts from the legal department are ready to give you a helping hand in this area. Write to us at vgdsklegal@vgd.eu and we will solve all your obligations for you.

We believe that you have found a lot of useful information in the article. We are also preparing the second part for you, where we will clarify other points concerning this amendment. Although, we recommend you to follow our website, Facebook page or Linked-In for more up-to-date information.