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Responsibility of statutory bodies and exemption from liability

Together with approving financial statements, the shareholders' meeting usually exempts managing directors and board members from liability.

This means that the company waives its right to claim damages. Generally, exemption from liability is granted for the previous year. However, exemption from liability is not absolute and its validity remains questionable.

Companies can waive their right to claim damages against managing directors and board members or enter into a settlement agreement with them after three years from establishing these claims but only if the shareholders' meeting approves and if none of the shareholders or minority shareholders raise objections.

If the shareholders' meeting grants exemption from liability before the expiration of the three-year-period, the waiver is invalid. If the company grants exemption from liability as a "preventive" measure this is also invalid under Slovak law. On the other hand, even a valid exemption from liability does not necessarily exempt a managing director or board member from liability. Creditors of the company can raise claims against a managing director or board member individually if their claims cannot be satisfied from company assets.