{"id":4235,"date":"2021-05-25T14:26:04","date_gmt":"2021-05-25T12:26:04","guid":{"rendered":"https:\/\/old.prosman-pavlovic.sk\/?p=4235"},"modified":"2021-05-25T14:26:05","modified_gmt":"2021-05-25T12:26:05","slug":"legislative-objective-of-the-recoding-of-company-law","status":"publish","type":"post","link":"https:\/\/old.prosman-pavlovic.sk\/en\/legislative-objective-of-the-recoding-of-company-law\/","title":{"rendered":"LEGISLATIVE OBJECTIVE OF THE RECODING OF COMPANY LAW"},"content":{"rendered":"\n<ul class=\"wp-block-gallery columns-1 is-cropped\"><li class=\"blocks-gallery-item\"><figure><img loading=\"lazy\" width=\"749\" height=\"400\" src=\"https:\/\/old.prosman-pavlovic.sk\/wp-content\/uploads\/2021\/05\/Legislative-objective-of-the-recording-of-company-law-prosman-pavlovic.jpg\" alt=\"Legislative-objective-of-the-recording-of-company-law-prosman-pavlovic\" data-id=\"4253\" data-link=\"https:\/\/old.prosman-pavlovic.sk\/?attachment_id=4253\" class=\"wp-image-4253\" srcset=\"https:\/\/old.prosman-pavlovic.sk\/wp-content\/uploads\/2021\/05\/Legislative-objective-of-the-recording-of-company-law-prosman-pavlovic.jpg 749w, https:\/\/old.prosman-pavlovic.sk\/wp-content\/uploads\/2021\/05\/Legislative-objective-of-the-recording-of-company-law-prosman-pavlovic-300x160.jpg 300w\" sizes=\"(max-width: 749px) 100vw, 749px\" \/><\/figure><\/li><\/ul>\n\n\n\n<p>On 11.01.2021, the\nMinistry of Justice of the Slovak Republic (hereinafterreferred to as\n&#8220;<strong>MS SR<\/strong>&#8220;) submitted to the interdepartmental comment procedure\nthe Legislative Intention for the recodification of company law. This intention\nis based on the idea of comprehensive and overall recodification of civil law,\nwithin which the legal dualism of the regulation of obligation law in the legal\norder of the Slovak Republic is to be abolished. This legislative effort is\nintended to result in a coherent and uniform civil code, as the primary code of\nprivate law, alongside which a new law on companies should be adopted, as is\ncurrently the case in the Czech Republic. This intention, albeit without a\nparagraph wording, provides an introductory and framework view of the\nforthcoming changes in company law.<\/p>\n\n\n\n<p>The MS SR is aware of the inadequacy of the current general legislation of legal entities and reflects this deficiency also in the legislative framework. The purpose of the recodification in this section is to establish a general legal basis for legal persons. A significant part of the legal institutes that can be found today contained in <a href=\"https:\/\/www.slov-lex.sk\/pravne-predpisy\/SK\/ZZ\/1991\/513\/\">the Act no. 513\/1991 Coll. The Commercial Code<\/a> as amended, will be part of the general regulation of legal entities in the forthcoming new Civil Code. Company law is thus to be narrowed in the new Companies Act, in particular to the joint regulation of capital companies, which is intended to cover the obligations and responsibilities of members of company bodies, the rights and obligations of shareholders, the rules on the protection of capital and creditors of companies and the specific obligations of companies and their statutory bodies in relation to the impending bankruptcy of a company.<\/p>\n\n\n\n<p>It is envisaged to\nprovide for more detailed legislation on liability relationships which are\npurely corporate in nature, such as transfers of participation in a company,\ndispositions with rights relating to shares, regulation of accessory agreements\nsuch as<em> tag along, drag along<\/em> or <em>shoot-out<\/em>.<\/p>\n\n\n\n<p>A complete novelty\nshould be the introduction of concern law, which is intended to regulate\nrelations within a group of companies subject to unified management. The\nproposed legislation is intended to include requirements for the publicity of\nthe concern group (control contract) as well as the conditions under which a\nmember of the body of the controlled person may also take into account the\ngroup interest to the detriment of the company of which it is a member of the\nbody, so as not to damage the creditor or public obligations and with the\nobligation to compensate within the group. This can be seen as a step forward,\nas there is currently a noticeable public approach to viewing the concerns as\nseparate entities. This will reflect the economic reality of the related\ncompanies, which form economic units despite being formally separate subjects of\nlaw. The possibility for creditors of subsidiaries to assert claims against the\nparent company should continue to lie in the sphere of liability of parent company\nfor its own unlawful conduct.<\/p>\n\n\n\n<p>It is proposed to abandon\nthe regulation of simple company for shares, which has brought into our\nlegislation, among other things, the creation of specific types of shares\nissued by the company. It originated as a hybrid between a limited liability\ncompany and a joint stock company, the purpose of which was to streamline and\nfacilitate the entry of venture capital into joint venture structures and start-up\nstructures. Since the new legislation aims to provide a wider scope for the\nautonomy of the founders of different types of companies, a simple company for\nshares will be unnecessary. However, many of the institutes and provisions of a\nsimple company for shares are to be incorporated into the provisions of a\nprivate joint stock company or limited liability company. Simple company for\nshares that were already established will be able to be transformed into\nlimited liability companies, and those that do not wish to use such a\ntransformation will be governed by the provisions of the joint-stock company&#8217;s\nlegislation.<\/p>\n\n\n\n<p>The legislation of\npublic companies and limited partnerships is to remain almost unaffected. However,\na novelty will also be found for limited partnerships, which under the new legislation\nwill be able to decide whether the equity holding of the limited partners will\nbe incorporated into a security, while at the same time it is to be introduced\nthat the shares of one shareholder shall not be concentrated to one single\nshare.<\/p>\n\n\n\n<p>Capital companies will\nundergo substantial changes. For capital companies, the creation and rules on\nthe protection and preservation of assets will be introduced, which will not\nonly apply to the capital. The aim of this legislation is that the shareholders\nshould only draw from the company&#8217;s assets share in the profits of the company.\nRules should also be introduced to limit transactions in addition to the\npermissible distribution of the company&#8217;s profits. The legislation will also\ndraw attention to transactions between related parties, i. e. between a company\nand its shareholders or between members of the company\u2019s bodies and their relatives.\nEfforts to introduce the application of the discretionary rule \u2013 <em>business\njudgment <\/em>rule \u2013 can also be seen as positive<em>.<\/em> <\/p>\n\n\n\n<p>For limited liability\ncompanies, it is proposed to either reduce the required capital to EUR 1 or to take\ninspiration from the legislation of the Federal Republic of Germany and to take\nover the model of gradually replenishing capital from the economic results\nachieved by the company, in addition to temporarily prohibiting the payment of\nprofit shares. It is also being considered to simplify the very process of\nsetting up a limited liability company by introducing forms of the founding\ndocuments with a lower fee for its registration.<\/p>\n\n\n\n<p>The new legislation is\nintended to abolish the uniformity of the business share and the shareholder in\nthe company will be able to have a number of shares with which he will be free\nto dispose of and to burden them independently. As in the case of a limited\npartnership company, a limited liability company will be able to incorporate a business\nshare in the form of a security. Consideration is also being given to the\nintroduction of preconditions when a business share can be acquired in good\nfaith (holding a business share).<\/p>\n\n\n\n<p>The legislation of\njoint-stock companies will seek to reflect the economic reality of the fact\nthat the majority of joint-stock companies in our conditions do not trade their\nshares on the capital market. It is proposed to cancel the closed number of\ntypes of shares. Joint stock companies will thus be able to issue different\ntypes of shares, which may be accompanied by different rights. When\nestablishing a joint-stock company, it will be possible to choose the creation\nof the company&#8217;s bodies between the general assembly with the management board\non the one hand or the board of directors with the supervisory board on the\nother.<\/p>\n\n\n\n<p>We perceive these\nefforts to improve and update the legal regulation of companies positively,\nsince approximation of the legal regulation of companies to the economic\nreality and market standards of the European Union will undoubtedly help Slovak\nbusiness entities to keep up with trends in the world.<\/p>\n\n\n\n<p>Our law firm will continue to monitor developments in this area of which we will keep you informed.<\/p>\n\n\n\n<p>If you need advice on the matter or the preparation of the necessary documentation, do not hesitate to <a href=\"https:\/\/old.prosman-pavlovic.sk\/kontakt\/\">contact us<\/a>.  <\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Ministry o Justice of the Slovak republic submitted to the Legislative Procedure the Legislative Intent for the Recodification of Company Law. What impact will have the amendment on companies?<\/p>\n","protected":false},"author":3,"featured_media":4253,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[215,195,217,103,104],"tags":[315,314,311,312],"_links":{"self":[{"href":"https:\/\/old.prosman-pavlovic.sk\/en\/wp-json\/wp\/v2\/posts\/4235"}],"collection":[{"href":"https:\/\/old.prosman-pavlovic.sk\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/old.prosman-pavlovic.sk\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/old.prosman-pavlovic.sk\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/old.prosman-pavlovic.sk\/en\/wp-json\/wp\/v2\/comments?post=4235"}],"version-history":[{"count":9,"href":"https:\/\/old.prosman-pavlovic.sk\/en\/wp-json\/wp\/v2\/posts\/4235\/revisions"}],"predecessor-version":[{"id":4263,"href":"https:\/\/old.prosman-pavlovic.sk\/en\/wp-json\/wp\/v2\/posts\/4235\/revisions\/4263"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/old.prosman-pavlovic.sk\/en\/wp-json\/wp\/v2\/media\/4253"}],"wp:attachment":[{"href":"https:\/\/old.prosman-pavlovic.sk\/en\/wp-json\/wp\/v2\/media?parent=4235"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/old.prosman-pavlovic.sk\/en\/wp-json\/wp\/v2\/categories?post=4235"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/old.prosman-pavlovic.sk\/en\/wp-json\/wp\/v2\/tags?post=4235"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}