Futej & Partners

An amendment to the Commercial Code, introducing several important changes concerning the liquidation of companies, will come into force on October 1 2020. The amendment seeks to improve transparency in the business environment by taking aim at tax fraud as well as the deceptive practices associated with company liquidations.

Act No 154/2019 amending the Commercial Code, which came into force on July 1 2019, introduced new rules for remunerating members of the bodies of publicly-listed companies and for significant business transactions with related persons. The changes are intended to bolster the standing of shareholders.

A long-standing burden on the courts in the Slovak Republic is the large number of old enforcement proceedings. Old enforcement proceedings are referred proceedings that commenced before April 1 2017, when a large amendment of the Code of Enforcement Procedure entered into force. While the new rules from this date give bailiffs strict limits for the new enforcement proceedings – two-and-a-half years for debtors who are legal entities and five years for debtors who are natural persons – no such limits existed for the old enforcement proceedings. This fact, plus the fact that old enforcement procedures could not be terminated for insolvency of a debtor without the creditor's consent, explains why there are still 2.6 million old enforcement procedures in the courts. These old enforcement procedures formally continue even though the debtor is, in most cases, insolvent and no assets are being recovered from them. If these cases continue to be completed at their present rate without state intervention, the old enforcement procedures would remain in the legal system for another 12+ years. To end this unsustainable situation, the government proposed an act on the termination of the certain enforcement procedures (Act) aimed specifically at the old enforcement proceedings, which will enter force on January 1 2020.