DO YOU PLAN TO CLOSE YOUR BUSINESS IN SLOVAKIA? DO SO BEFORE OCTOBER 2020.
We would like to remind you that the Amendment to the Commercial Code (the Act No. 390/2019 Coll.) that will fundamentally change the process of voluntary dissolution and liquidation of Slovak companies will enter into force on October 1, 2020.
Following October 1, 2020, the liquidators of the companies will be burdened with several new obligations and companies intending to close their operations will be required to bear certain additional costs. Therefore, as result of the adoption of the above-mentioned Amendment, the liquidation process will become more complicated, costly and will also last longer.
Below we summarize the most important changes that the concerned Amendment will introduce with respect to the liquidation of Slovak companies:
- effectivity of the company’s entry into liquidation
According to the Amendment, the entry of the company into liquidation will become effective on the day of the registration of the liquidator with the Commercial register (according to the current legislation, the entry into liquidation becomes effective earlier, i. e. on the day on which the decision on winding-up of the company is adopted). This – at first sight – small change may, due to the frequent prolongations of/non-compliance with the statutory deadlines by the registry courts, significantly contribute to the prolongation of the liquidation process of companies and their deletion from the Commercial register.
- obligation of the company to pay an advance payment
The company will have to deposit an advance payment in the amount of EUR 1,500 with the notary prior to the registration of the liquidator with the Commercial register. According to the current legislation, no such obligation is imposed on the companies, i. e. it is a completely new financial burden for the company.
- a new six-month period
The Amendment introduced a new rule according to which the day of termination of the liquidation (on which the liquidator is obliged to draw up a financial statement, a final report on the course of the liquidation and a proposal for the distribution of the liquidation balance) may not be sooner than six months after the announcement of the company’s entry into liquidation.
- new obligations of the liquidator
Liquidators will be obliged to draw up new documents, namely a list of the company’s assets as well as a list of lodged claims and deposit them in the Collection of Deeds.
In this regard we would like to point out that pursuant to the concerned Amendment, liquidations in which the liquidator was registered with the Commercial register by September 30, 2020 shall be completed pursuant to the Commercial Code as amended and effective by September 30, 2020, i. e. pursuant to the currently valid rules, which are in or view more favorable for those interested in voluntary winding up and liquidation of their company.
As already mentioned above, the Amendment will introduce changes, due to which the process of voluntary winding up of the companies and their liquidation will become more complicated for entrepreneurs in Slovakia, both in terms of time and money.
With respect to the above, we recommend all shareholders of companies that intend to close their business activities in Slovakia to take necessary steps to initiate the process of liquidation of their companies as soon as possible, so that the liquidation of their companies may be governed by the currently valid legislation which is more favorable for them.
Should you be interested in winding up and liquidating your company or have any additional questions in this regard, please feel free to contact us anytime.