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1-euro company; new obligations for managing directors

From 1 January 2015, businesses in Slovakia can be started with 1 Euro.

If the Slovak National Council repeatedly adopts the amendment to the Commercial Code until 31 December 2014, LLCs with registered capital of less than EUR 25,000 will face many new obligations.

For example, an LLC with registered capital of less than EUR 25,000 can have a maximum of five shareholders (this does not apply to LLCs established before 31 December 2014) and they must mention the amount of its registered capital in all business documents as well as the extent to which the registered capital has been paid up.

1 January 2015 will also bring new obligations for statutory bodies of business companies. If a statutory body finds out that the company is in crisis, it must take certain statutory steps, such as convening a meeting of the supreme body of the company and preparing measures to recover from the crisis. A company is in crisis if it is insolvent or if the ratio between the company’s own capital and its liabilities is less than 4:100 in 2015, 6:100 in 2016 and 8:100 in 2017 and later. A company in crisis must not repay loans or similar payments made to it during the crisis, such as if a company in crisis is financed through its shareholders.

From January the statutory body will be liable for return of assets which the company should have acquired from the shareholders but did not, if those assets exceeded 10 % of the value of the registered capital and no acquisition contract came into force since no expert opinion was prepared with regard to the value of the assets or the contract was not deposited in the Collection of Deeds.

Lastly, a register of disqualifications is introduced, keeping records of those excluded as members of a statutory body, members of a supervisory body, directors of branch offices, directors of enterprises or branch offices of a foreign entity or as proxies. Statutory bodies can be recorded in the registry of disqualifications especially if they fail to file for bankruptcy of an overindebted company within 30 days after they learned or could have learned with the prudence of a diligent businessman about the overindebtedness of the company. A company is overindebted if it has more than one creditor and its liabilities exceed its assets.

 

Source: Act changing and amending the Act No. 513/1991 Coll. Commercial Code as amended and changing and amending certain acts