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  06.07.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:033, Edited:21.08.2017 SH Reserve Fund of the Slovak LTD company  (SK) The   LTD   company   is   not   obliged   to   establish   any      reserve   fund      (RF)   at   the   time   of         incorporation,      however      it   must   create   it   within   its   first   year   when   it   reaches   at   least   5   per cent of its first net profits.   In this way the company replenishes the reserve fund in each  year until the  achieved amount is 10 per cent of its equity.  Example:    ABC   company   was   established   in   2014.         Its      basic   capital   is   in   the   amount   of            5,000.00         EUR.         At   its   formation   the   company   has   decided   not   to   create   a   reserve fund      .   In   2015,   the   Company   had      losses   and      therefore      wasn´t   oblidged   to   create      a   reserve      fund.   However   in   2016,   the   company   made   a   profit   in   the   amount   of   2,000.00 Eur   .   Firstly,   the   company   had   to   tax   the   sum      at   22%,   so   the   remaining   amount      was   1,560.00   Eur.   From   this   sum,      the   company   had      to   earmark   the   minimum   5%         -   which   is 78.00   Eur.   This   value   represents   the   sum   that   is   paid   to   the   reserve   fund   for   2016.   Every   year,   in   which   the   company   makes   a   profit,   a   minimum   of   5%   is   paid   to   the   reserve fund,   until   it   reaches   at   least   500.00   Eur   (500.00   Eur   represents   10%   of   the   amount   of   the   basic   capital   of   the   company   ABC   s.r.o.).   Unless   the   company   has   losses   again   in the next year, it won´t pay any money to the reserve fund. It   is   possible   to   replenish   the   reserve   fund   with   a   higher   sum   (members   can   define   the   sum   in   the   Partnership   agreement   or   in   the   Articles   of   associaton).   The abovementioned   example   contains   only   the   minimum   percent   laid   down   by   law.      Also   it   is   possible   to   create   the   reserve   fund   immediately   at      the   company´s   beginning.   The reserve   fund   may   be   created   at      any      rate   from   the   members´contributions   provided   beyond   its   contribution.   If   this   option   is   pursued,      the   Partnership   agreement   shall include   the   period   within   which   the   members   are   obliged   to   provide   the   agreed   allowances.   The   reserve   fund   exclusively      serves   to   cover      the   company´s   losses   and   it doesn´t   have   to   be   created   only   with   money   and   it   doesn´t   have   to   be   held   in   a   special   bank   account   (as   of   2002).      The      disposal   of   the   reserve   fund   is   determined   by   the     directors unless the partnership agreement states that the decisions concerning   the reserve fund will be made by the general assembly. Problem   from   practice:   The   reserve   fund      is   created   from   the   profits      established   in   the      duly   approved   financial   statement.   However   the   general   assembly,   which   approves the   financial   statement,      always      meets   in   the   following   year.   For   example   if   the   financial   statement   for   2015   is      approved,   the   general   assembly   meets   sometime   at   the beginning   of   2016.      Therefore   ,   some   clients   have   problems      because   they   don´t   know,   whether   the   reserve   fund   shall   be   created   in   2015      or   2016.         In   this   regard   we   wish   to point   out   that   the   contribution   to   the   reserve   fund   is   always   bound   to   the   year   in   which   the   profit   was   made-   in   this   case   it´s   2015   (even   if   the   general   assembly   approves the financial statement in 2016).     16.06.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:031 How to set up a Slovak company – the whole process (SK) The   best   way   to   make   a business   in   Slovakia   is   a formation   of   a business   company.   There   are   five   types   of   companies   but   we   recommend   establishing   a Limited   Liability Company   –   mainly   because   of   its   many   advantages:   limited   liability   of   the   shareholders,   simple   structure,   very   low   formation   fees   and   operating   costs   and   high   flexibility. 99% of all business companies in Slovakia are LLCs. The following steps are necessary in order to form a company: 1.   Registered   office/seat:   at   the   beginning   you   need   to   have   a registered   office   for   the   company   (the   address   which   will   be   published   in   the   Business   Register   and   where   all the   correspondence   will   go).   This   can   be   obtained   by   signing   a contract   with   some   provider   of   registered   offices.   After   signing   the   contract   and   paying   for   the   office,   the provider will give you a document called Consent of the Owner. 2.   Trade   notification:   you   have   to   register   your   company   at   the   Trade   Licensing   Office,   where   you   get   identification   number.   This   office   will   allow   you   to   perform   business activities   of   your   choice   (of   course   there   are   different   conditions   for   different   activities,   therefore   it   is   recommended   to   consult   before   with   a lawyer).   Trade   Licensing   Office will   give   you   a Trading   License   after   2   –   3   days.   It   is   possible   to   ask   Trade   Licensing   Office   to   also   register   the   company   with   the   Tax   Office   so   you   don´t   have   to   do   this   on your own afterwards. 3.   Business   Register   (managed   by   registered   courts):   after   getting   the   Trading   License   you   have   to   register   your   company   with   the   Business   Register.   To   properly   do   this following   attachments   are   necessary:   Trading   License,   Consent   of   the   Owner,   Memorandum   of   Association,   Statement   of   the   Depository,   Specimen   Signature   and   Statement of   the   Founder   (stating   that   you   as   a foreign   person   are   not   obliged   to   provide   the   court   with   the   consent   of   the   Slovak   tax   authority).   Naturally   depending   on   the   specific nature   of   your   business,   also   other   attachments   might   be   needed.   The   registered   court   will   issue   a Business   Extract   in   a few   days   which   serves   as   a legal   evidence   of existence of your company. What do you need to set up a company? You   will   need   your   ID   card   and   a   Criminal   Record   (no   older   than   6   months)   translated   into   Slovak   language.   If   the   founder   is   a legal   entity   also   business   documents   are requested (this depends on the specific country where the entity was established), in most cases these documents need an Apostille. Author Dr. Soňa Šallai     15.06.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:030, Edited:18.08.2017 SH The  authenticity of electronic invoice (SK) When   using   electronic   invoicing,   it´s   necessary   to   ensure   authenticity   ,   content   integrity   and   legibility.   The   authenticity   means,   that   it´s   indisputable   who   supplied   the   goods or   services.      According   to   the   methodological   guidelines   of   Financial   Directorate   of   the   Slovak   Republic,   the      supplier   who      issues   an   invoice   ensures   the   authenticity   of   its origin by registering it in accounting records. „Integrity   of   the   content“   means   that   the   content   required   according   to   this   guideline   has   not   been   altered   (converting   of   the   format   doesn´t   mean   that   the   content   is changed) .  All   electronic   invoices   shall   be   legible   for   the   recipient.   If      they   are   issued   in   a   structured   format   (eg   XML)   it´s   necessary   to   convert   them   to   a      legible   form.      In   case   of   an audit, you must be able to render the invoices legible when requested to do so. VAT Act gives three possible alternatives how to reach authenticity. The tax payer can choose between these options:  1 . Control   mechanism   of   business   process   management:   This   is   achieved   by      attaching      other   supporting   documentations   to   an   invoice   (order,   delivery   note,   contract, proof of payment etc.) It doesn´t imply that they need to be clipped together, but they shall be archived together and marked in order to easier match them up.  2 . The invoice shall be signed by the qualified digital signature. 3 . Electronic   data   interchange   EDI:   EDI   is   the   computer-to-computer      exchange   of      business   data.      The   agreement   on   EDI   shall   explicitly   provide   the   terms   and   conditions for such invoices. 4 . Other   ways:   possible   combination   of   abovementioned   ways   or   the   taxable   person   can   use   other   technologies   of   protection   including   scanning   the   invoice   or   using web portals. In these cases we recommend observing  the first point as well. In   conclusion,   in   compliance   with   the   directive   on   invoicing,      the   tax   administrator   is   not   allowed   to   restrict   the   tax   payers   regarding   which   option   they   choose.   We recommend that you choose themethod , which is the most effective  one for  you and your business partners giving consideration to the amount of released invoices.    14.06.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:029, Edited:18.08.2017 SH What is considered to be a valid electronic invoice ?  (SK) Since         1.1.2013      both   paper   and      electronic   invoices   are   recognized   equally   .   They   are   bound      by   equal   requirements   stated   in   VAT   directive   Sec.74.      Some   enterpreneurs believe, that there is  specific  format for electronic invoices  as provided by law. It´s not true. Electronic invoices are the following: invoices in any electronic format  including PDF or XML (recipient can convert the invoice to another format that is more convenient for him)  invoices drawn up as paper invoices and then scanned invoices sent by e-mail as attachments invoices received by fax in electronic format invoices signed by qualified digital  signature or without it Some notes to electronic formats of invoices: it   depends   on   you   which   format   of   electronic   invoice   you   choose.   it   is   neither      determined   by   the   directive   (2006/112   ES   amended   by   the   directive   2010/45/EU)   nor   by the state. if you sign the invoice by qualified digital  signature and then its format is changed, it´s necessary to enter it in the check list. invoices   can   be   also   sent   in      structured   messages   in   XML   or   EDI   formats.      Except   for   the   compliance      of   all   particulars   of   invoices,   set   out   in   the   provisions   of      Section 71 (3) of the VAT Act, every  invoice must be legible and have a-legible format. The   invoice   may   be   sent   electronically   with   the   consent   of   a   business   partner.   As      of      2013,   the   acceptance   does   not   need   to   be   made   in   writing.   It   can   be      expressed   by   e- mail   or   in   the   agreement,   The   consent   to   using   electronic   invoices      is   also   implied   by   payment   of   such   invoice.   If   the   recipient   does   not   agree   with   sending      the   electronic     invoices for any reasons, you are oblidged to send him the invoice in paper form.   14.06.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:028, Edited:18.08.2017 SH What does DECLARATION OF TRUST involve ?   (INTL) This   term   is   usually   mentioned      in   the   context      of   an   offshore   company   where   a      „nominee“   is   appointed   to   perform   duties   relating   to   administration   and   voting   rights   of   the beneficial   owner.   That   means   that   the   nominee   director   (corresponding   to   managing   director   of   a   limited   liability   company   in   Slovakia)      or   shareholders      (corresponding   to member   of   a   Ltd   in   Slovakia)      are   appointed   due   to   the   fact   that   the   real   beneficial   owners   or   managers   may   remain   anonymous.   In      this   arrangement   ,   the   whole   company is entrusted to the unknown director who performes all legal acts. Read the attached PDF document (the docu is being processed)     10.06.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:026, Edited:18.08.2017 SH When is it possible to pay  company´s profit out  among the company members ?  (SK) Members   of   an   LTD   have   the   right   to   share   in   the   company´s   profits   .   Unless   otherwise   provided   in   the   partnership   agreement         this   share   is   determined   by   the      paid contribution . Profit distribution  shall be realized within the legal terms and it can be subject to the following conditions: 1.   Distribution   of   profit   must   be   preceded   by   approval   of   the   General   Assembly   of   the      financial   statement.   The   General   Assembly   shall   have   the   right   to   distribute   all   or   part of the profits among the members.  2.   A   company   may   distribute   only   the   net   profit   reduced      by   obligatory      reserve   fund   and   unpaid   losses   from   the   previous   periods,   i.e.   settlement   of   losses   from   previous periods   take   precedence   over   distribution   of   profit.   LTD   companies   are   oblidged   to   establish   a   reserve   fund      in   the   amount   of   10%   of      its   basic   capital.   Joint-stock   companies are oblidged to establish a reserve fund  in the amount of 20% of  its basic capital.  Example:   XY   Ltd   has      two   members   whose   contribution   to   the   basic   capital   is   5,000.00   Eur   paid   by   the   equal   contribution   in   amount   of   2,000.00   Eur.   While   the   company hasn´t   modified   profit   contribution   in   its   partnership   agreement,   the   profit   shall   divide   profit   equally.   The   company   has   reached   net   profit   in   amount   of   8,000.00   Eur.   The company   is   obliged   to      create   the   reserve   fund   in   accordance   with   the   provisions   of      article   124   of   Commercial   Code   and   supplements   the   reserve   fund   on   an   annual   basis by   sum   of   5%   of   the   net   profit,   resulting   from   an   annual   financial   statement.   In   2017,   after      duly   approved      financial   statement   for   2016,   the   company   supplemented   the reserve   fund   by   sum   of   400,00   Eur.   The   rest   of   the   net   profit   was   divided   among   two   members   in   amount   of   7,600.00   Eur   (provided   that   they   don´t   have   to   settle   a   loss from the previous periods).    3.   On   the   contrary,   if   in   the   past,   the   company   reached   a   profit   which   wasn´t   divided   among   the   members   and   the   company   hasn´t   used   the   money      in   any   other   way,   the company   can   pay   out   the   profit   only   by   including   it   to   the   actual   profit   and   then   it   can   be   divided   among   the   members.   Undivided   profit   from   the   previous   years   and   money from   other      capital   funds   can´t   be   paid   out      through   other   financial   implementation   during   the   year;   the   company   may   perform   the   payment   only   by      paying   out   the   profit from  the company after duly appoval of the annual financial statement.  4.   Paying   out   the   profit   is   not   possible,   if   the   company   went      bankrupt   due   to   this   payment   or   its   basic   capital   (according   to   the   financial   statement)   is   lower   than   the   total sum of basic capital and reserve fund.  5. Advanced payment for profit shares during the accounting period  is  not allowed. It is also unlawful to pay out the interest out of the members´ contributions. If   the   profit   share   is   paid   out   contrary   to   the   rules,   the   members   are   obliged   to   pay   the   funds   back   .   Paying   the   funds   back   is   guaranteed   by   the   directors   announced approval   of   such   payout   .      Directors      are   obliged   to   pay   attention   to   these   duties.   If   the   company   is   liable   to   be   harmed   in   the   context   of      such   proceeding   due   to   breaching the duties to execute their duties professionally, directors  bear full responsibility for it owing to absence of .    06.06.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:025, Edited:18.08.2017 SH New general data protection regulation in the EU - GDPR   (EU) All   over   the      EU,   regulations   regarding   data   protection   regulation   have   been   introduced.   These      regulations   outline      the   rights   of   website   providers,   webshops,   employers,     providers   of   marketing   services,   biometric,   camera   and   access   systems   and      retailers.   General   data   protection   regulation   pertains      not   only   to   the      category   of   personala data.   It   also   relates   to   cookies,         geolocations,         e-mails,         IP         addresses,      genetic   data.   Beyond      these,      the   territorial   scope   of   GDPR   is   widening   .      It   applies   to   those   providers, who   process   the   personal   data   outside   the   EU   and   the   providers   outside   EU   who   process   personal   data   of   the   European   citizens   (mainly   when   they   provide   services   or   sell goods ). We are bringing you  some new institutions: Right   „to   be   forgotten“:    Personal   data   provided   for   a   specific   purpose   by   the   person   whom   it   concerns         that   which      is   no   longer   necessary,      can   be   erased.   The      person   may ask for data erasure anytime, if the person decides to withdraw the consent to provide the personal data. Right   to   data   transmission:    It   provides   the   person   in   concern   the      right   to   ask   the   provider      for   his   own   personal   data.   The   provider   is   obliged   to   provide   it   in   a   legible,     structured format. The person is entitled to transmit  the data to another provider. Right   to   announce      security   incident:    If   there   is   a   breach   of   security   of   personal   data,   the   provider   shall   report   this   breach   without   undue   delay      (no   later   than   72   hours)   to the competent Supervisory Authority. Companies   which      process   personal   data   on   a   large   scale   (eg.   marketing,   market   research   etc)   are   obliged   to   appoint      an   independent   and   responsible   person   -   the      Data        Protection      Officer.      GDPR   determines   the   requirements   for   SK   enterpreneurs   as   well   so   that   they   can   modify   the   general   data   protection      despite   the   fact   that   Slovakia   has had   the   strictest   legislation   in   this   area.      Regardless   of   whether      your   company   processes   the   personal   data   in   large   scale      itself      or   a   third   party      has   been   appointed      (   this categhory   applies   to   the   enterpreneurs   mentioned   at   the   beginning   of   this   article),   you   should   modify   your   genaral      data   protection      in   accordance   to   the   provisions   of   GDPR or contact our lawyer, who will explain the details to you.    25.05.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:024, Edited:18.08.2017 SH How to register business establishment correctly (SK)   To   start   with,   obtaining      a   business   license   for   business   establishment   isn´t   required   by   any   law.   A      business   establishment   isn´t   bound   to   a   specific   trade.   If   you   perform      a business   activity,   which   can´t   be   executed   from   your   home      or      place   of   business,   then   the   registration   of   the   business      establishment      will   be   required   by   local   authorities         –        especially when your  business activity  concerns   handlinggoods or producing  goods. The   registration   of   the   business   establishment   (   and   its   liquidation   as   well)   shall   be   performed      at   the   Trade   Register   Office.   The   notification      of   the   establishment   can   be exectuted   only   after   the   registration   of   the   commercial   company   at   the   Registrar   of   Companies.   The   registration   of   the   establishment   shall   be   performed   on   the   first   day     businessis conducted at the latest. It´s necessary to register the establishment at the Trade Office and Tax Office within 30 days. When   using   the      electronic   register   ,   a   tax   code   is   required.   The   enterpreneur   can   ´t      performed   his   business   activity   unless   a   permit   is   issued      by      Public   Health   Authority   in the   Slovak   Republic.      After   making   anevaluation   of   positive   and         negative   factors   affecting      public   health,   the      Office      gives   its   approval   to      operating   procedures   document. The   operating   procedures   document      is   necessary   for   swimming   pools,   personal      care      facilities   (e.g.   hairdresser´s   ,   tanning   salons),   facilities   with   catering   service   etc.      The operating   procedures   shall   be   announced   at   the   municipal   authority   (   due   to   the   fact   that   these   obligations   are   provided   by   the   municipalities   individually   it   does   not concern to every establishment). In   addition   to   these   measures,   it´s   necessary   to   ensure   OHS   (occupational   health   and   safety)   training   and      fire   prevention   training   (if   the   employer   has   more   than   5 employees   and      complies   with   further   legal   requirements   he   is   oblidged   to   perform   more   duties.   Due   to   their   wide   range,   they   can´t   be   inluded   in   this   article);      if   the company employs more than 3 employees, it has to be announced to RTVS (Broadcasting and media production) and he has to pay licence fees . Other requirements depend on specific business activities, eg. contact with the consumers, production or sales of food, webshop, smoking ban.     11.05.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:023, Edited:21.08.2017 SH New Procedure  for  debt recovery in Slovakia should be quicker than payment order (SK)   The   new   Debt   Recovery   Act   307/2017         which   went   into   effect   on      1.   February   2017,      will   help   the   appropiate   officers      of   the   court      as   well   as      citizens   to   accelerate      the     processing   of      requests      for   payment   orders.      The   new   act   introduces         an   electronic      alternative   to   the   standard   payment   order.   It   may   be   only   filed      electronically   and   the only competent Court is  the District Court of Banská Bystrica. The   biggest   advantage   of   the   whole   process   is   its   simplicity-      you   only   have   to   attach   the   invoice   or   similar   document      related      to   the   submission      and      declare   that   the   data concerning   the   claim   enforcement      is   listed   in   your   bookkeeping   .   In   the   case   of   the   complainant   being   a   VAT   payer,   he   can   include   a   declaration      in   his   proposal   ,   stating   that the   data   is   listed   in   the   accounting   statement.         If   the   proposal   in   incomplete   orincorrect   ,   the   court   will   request   that   the   claimant      complete   or   rectify   the      proposal   within      5 working   days.      Upon   the   satisfaction   of   all   specified   conditions,   the   court   shall   issue   the   payment   order   within      10   working   days   and   shall   oblige   the   defendant      to   pay      his liability      within   15   days   of   receipt   of   the   payment   order   (the   payment      order   may   be   serviced      only      by   electronic   means)   .      The   defendant   may   submit   a   statement   of opposition   exactly   in   the   same   way   as   in   a   standard   payment   order   .   In   the      statement   of   opposition,      the   defendant      shall   express   whether   or   not      the   invoice   was   delivered to   him,   how   he   dealt      with   the   invoice   and   whether   or   not   the   invoice   was      recorded   in   his   bookkeeping   (if   not,   why   not),   or   if   the   invoice   was   recorded   in   his      accounting statement.  If the defendant  finds  it difficult  to pay the whole amount  of money at once, the law allows him a payment schedule  under following conditions : he hasn´t submitted a statement of opposition to the payment order, maximum  amount of installments  is 10 , the total amount doesn´t exceed 2,000.00 EUR , he proves that the first installment of at least 50.00 EUR  has  already been paid to the claimant   03.03.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:013, Edited:24.03.2017 EL Change of the business name of a limited company (SK) The   business   name   of   a   company   registered   in   the   Trade   Registry   is   possible   to   change,   but   the   addendum,   indicating   the   legal   form   of   the   company   must   be   retained- either in the form of abbreviations, or a verbal expression. To   change   the   company´s   name   is   primarily   necessary   to   check   if   someone   has   already   used   the   new   name   that   you   have   selected   (checking   is   available   on   the   webpage   of the   Trade   registry   and   then   it   is   possible   to   handle   a   proposal   to   change   the   registered   name   to   the   Registry   Court.   The   annex   to   the   proposal   for   the   change   of registration   is   the   memorandum   of   the   General   Assembly   or   the   decision   of   the   sole   shareholder   (depending   on   how   many   shareholders   are   there   in   the   company)   about the   change   of   the   Articles   of   Association,   which   the   change   of   name   comes   from.   To   accept   this   decision   it   needs   the   approval   of   at   least   two-thirds   majority   of   all   the   votes of   the   shareholders,   unless   the   General   Assembly   is   entitled   to   decide   about   the   change   in   the   Articles   of   Association.   If         this   competency   is   not   entrusted   to   the   General Assembly,   and   the   Articles   of   Association   can   be   changed   only   with   approval   of   all   partners,   so   the   trade   name   may   be   changed   only   by   unanimity.   Notarized   verifying   of   the executive´s   signature   is   not   requested.   After   that   the   executive   of   the   company   has   to   draw   up   the   Articles   of   Association   under   the   new   trade   name,   and   save   in   a collection   of   documents   within   30   days   of   receipt   of   the   decision   on   the   change.   Finally   it   is   important   to   change   all   the   business   documents   and   the   webpage   according   to §3 of the Commercial Code.   01.03.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:012, Edited:24.03.2017 EL How many of Limited Liability Companies can one person own (sole ownership) – according to the Slovak and Czech Law (CZ, SK) It   is   set   in   the   Slovak   Republic   from   2002,   that   a   natural   person   may   be   the   sole   owner   of   maximum   of   three   companies   according   to   section   105a   of   the   Commercial   Code (OBZ)   -   it   is   so   called   restriction   on   chaining.      This   restriction   is   set   only   for   Limited   Liability   Companies,   thus   natural   person   can   be   a   sole   shareholder   in   many   other Corporations   or   Simple   Joint   Stock   Companies.   In   practise,   sometimes   entrepreneurs   seek   to   work   round   this   restriction   by   assigning   for   the   sole   shareholder   a   commercial enterprise,   of   which   they   are   the   sole   owners.   Commercial   Code   also   calculates   with   this   behaviour   and   it   constitutes   that   single-member   companies   may   not   be   the founder   of   another   company   (or   become   its   sole   partner   for   the   entire   existence   of   the   company).   The   Registry   Court   is   compulsory   to   verify   the   restriction   of   chaining.   In case there is a breach-through, the Court is authorised to wind-up all the companies, which breaks this restriction, without any proposal. If the entrepreneur feels limited by the restriction on chaining, and tends to have more companies where there is no sharing among partners, there are some solutions: 1.       Instead   of   a   Limited   Liability   Company   he   may   establish   a   different   type   of   company,   the   best   is   the   Simple   Joint   Stock   Company   which   is   the   closest   of   all   types   to   LLC but it is not covered by that rule. 2.      He   is   able   to   establish   instead   of   a   Slovak,   a   Czech   LLC   :   the   new   Civil   Code   in   the   Czech   Republic   and   the   Law   on   the   establishment   of   companies   (ZOK)   have   allowed   to establish a corporation by a sole member  with an only restriction- so that the companion is unable to cancel his participation unless he assigns his successor. In   the   explanatory   memorandum   to   the   Law   (ZOK)   the   Czech   legislator   explains   the   effort   to   simplify   the   restrictions   on   the   single-member   companies,   due   to   seeing   no purpose in burdening on companies.   A Czech LLC is able to act independently or to establish a branch in Slovakia. 3.      To   gain   a   minority   shareholder   (partner)   with   a   contribution   of   750,-   Euros            (minimal   legal   contribution   in   a   LLC)      but   simultaneously   to   set   up   the   Basic   Stock   and   voting rights   in   Deed   of   Foundation      in   a   way,   he   absolutely   controls   the   decisions   of   the   company.   Certainly,   it   is   necessary   to   respect   the   legal   protection   of   the   minority shareholder and do not misuse the position.   25.02.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:011, Edited:24.03.2017 EL Change of the company´s seat (SK) If you decided to change your company´s headquarters (seat), you shall need to following documents: A   warrant   (PoA):    Necessary   in   the   case   that   an   application   to   the   commercial   register   is   not   handed   in   personally,   but   through   another   person   (usually   one   that   has   a qualified electronic signature) The   resolution   of   General   Assembly   or   The   decision   of   a   single   member:   The   resolution   of   General   Assembly   is   provided   in   case   the   company   has   at   least   two partners.   The   decision   of   a   single   member   is   used   for   companies   with   a   sole   shareholder–it   is   the   only   difference,   otherwise   these   documents   are   equal.   In   the resolution   or   decision   must   be   clearly   set   the   will   to   change   the   seat   and   the   address   of   the   new   headquarters   must   be   stated.   The   resolution   must   be   signed   by   the President of the General Assembly, as well as the decision of the sole partner, but a notarial certificate of signature authentication is not required. Consent   of   the   property   owner:   This   document   is   a   compulsory   attachment   to   the   proposal   for   the   Commercial   Registry   The   property   owner,   in   which   there   will   be the   residence   of   the   new   seat   of   the   company,   is   obliged   to   express   his   consent   with   the   locating   of   the   headquarters   (in   case   the   property   is   owned   in   common   by     spouses   ,   both   are   obliged   to   give   the   consent).   The   consent   with   the   locating   may   be   given   by   the   property   tenant,   but   he   is   obliged   to   have   an   authorized   permission from   the   owner   (or   to   give   their   consent   to   placement   directly   expressed   in   the   lease   agreement).   Then   it   is   necessary   to   enclose   for   the   Commercial   Registry   the consent of the tenant and the lease agreement with the property owner. Property   deed:   It   is   necessary   to   provide   an   actual   extract   from   the   Property   Deed   on   which   the   seat   of   the   company   will   be   located,   but   it   is   enough   to   provide   the informative   extract   from   the   webpage   of   Land   Registry   (,   there   is   no   need   to   apply   for   the   PD   at   the   proper   District   Authorities,   and   to   pay   the charge. The   full   text   of   the   Articles   of   Association:   By   any   change   of   the   company   there   is   always   issued   a   new   Articles   of   Association,   or   a   new   Deed   of   Foundation,   where there   is   a   need   to   incorporate   these   changes,   sc.   In   that   case   it   should   contain   the   new   seat   of   the   company.      Such   an   Article   of   Association   is   obliged   to   be   signed   by the executive(s) of the company, but there is no need for notarized verifying of the executive´s signature. After   having   all   these   documents   prepared,   the   proposal   for   the   change   in   your   company   can   be   handed   in   at   the   competent   District   Court,   which   is   as   well   the   Court Registry.   The   competent   Court   for   proposals   is   always   the   one   mentioned   in   current   file   mark   of   the   company,   so   it   is   not   the   District   Court,   in   which   jurisdiction   the   new seat will be located.   24.02.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:010 Why choose Slovak company? (SK) Foreign   persons   may   conduct   business   activities   in   the   Slovak   Republic   under   the   same   conditions   and   to   the   same   extent   as   Slovak   citizens.   They   only   need   slightly different documents submit to authorities. ( read more here  ) Slovak   Limited   Liability   Company   (spoločnosť   s ručením   obmedzeným   –   SRO)   can   be   formed   within   ten   days,   the   process   is   very   easy   and   the   maintenance   of   the company   is   among   the   cheapest   within   the   European   Union.   The corporation   tax   rate   of   21%   is   lower   than   in   the   most   of   european   large   countries,   so   you   can   use   the advantage   of   low   tax   and   still   make   your   business   in   the   area   of   the   whole   European   Union.   There   is   no   problem   with   the   registered   office   and   forwarding   the correspondence   to   any   chosen   address.   Furthermore,   the   accounting   services,   which   are   obligatory,   are   also   cheaper   than   in   the   majority   of   the   EU   Member   States   and   VAT registration is possible if you are willing to deposit advances. Limited   Liability   Company   is   very   simple   and   flexible   -   every   necessary   change   can   be   done   within   one   week.   There   are   not   any   restrictions   regarding   the   commercial activities in other countries, except the third countries (outside the EU), but this issue can also be solved. For   the   clients   who   already   conduct   their   entrepreneurial   activities   outside   Slovak   Republic   (SR)   but   wish   to   expand   to   SR   or   nearby   countries,   there   is   a possibility   of forming   a branch .   It   is   even   more   simple   than   forming   a new   company.   The   branch   does   not   have   a legal   capacity,   its   internal   relationships   are   managed   by   the   law   of   the country   where   the   main   company   (its   founder)   was   incorporated.   The   branch   has   to   pay   taxes   and   keep   accounts   here,   but   it   does   not   have   to   have   any   registered   capital and the property of the branch is the property of its founder. Jurisdiction   of   Slovak   Republic   offers   two   more   capitals   companies:   a   Joint   Stock   Company    (akciová   spoločnosť   -   AS)   and   a   Simple   Joint   Stock   Company    (jednoduchá spoločnosť   na   akcie   -   JSA).   A   Joint   Stock   Company   needs   to   have   the   registered   capital   of   €   25.000,-   and   the   formation   process   takes   longer   (this   depends   also   on   the   way   the shares   are   issued).   This   type   of   company   is   suitable   for   capital   intesive   projects   since   there   is   no   limit   for   the   number   of   shareholders   (the   maximum   number   of shareholders in SRO is 50), it has more serious „image“ and offers much more space for acquiring the funds from investors as well as financial institutions. A   Simple   Joint   Stock   Company   is   an   effective hybrid   between   SRO   and   AS.   Its   registered   capital   is   at   least   €   1,-   and   the   formation   process   is   also   faster   than   with   AS,   what makes it an ideal option for those who would like to benefit from seriousness and investment impact of AS and flexible management and low cost of SRO. Slovak   jurisdiction   offers   valuable   types   of   business   companies   with   the   possibility   to   expand   beyond   the   borders   –   whether   by   establishing   other   entrepreneurial companies within the EU or in third countries or just by acting on their own behalf as reputable european legal entities.    Author Dr. Soňa Šallai     23.02.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:009, Edited:24.03.2017 EL New compulsory evidence in the Czech Republic  (CZ) Since   January   this   year   in   the   Czech   Republic   shall   apply   the   amendment   to   the   law   253/2008   Sb   will   be   applied   -so-called   'the   law   against   money   laundering   '.     The   amendment   reflects   the   European   Union's   efforts   to   prevent   the   use   of   the   financial   system   for   the   financing   of   terrorism   and   money   laundering   (Directive   no. 2015/849, so called “the fourth of AML” directive).    Thus   formed   the   obligation   for   Court   of   registration   of   companies   to   keep   a   record   of   the   actual   business   owners   and   trustee   funds   and,   on   the   other   hand, companies   and   funds   are   obliged   to   report   the   persons   with   significant   influence.   There   shall   be   signed   in   the   evidence   all   personal   information   of   the   owners,   their voting   rights   and   other   matters,   which   explain   the   way   of   participation   of   the   person   in   the   ownership.      The   real   owner   is   deemed   to   be   the   person   who   has   the   most factual   or   legal   influence   over   the   management   of   the   legal   entity.      Since   2018   there   will   be   possible   internet   access   to   this   register.   Legal   entities   will   be   required   to continually update this evidence, including the reports of the reasons why they consider the proposed persons for the actual owners. In   addition   to   this   registration   other   obligations   relating   to   the   entrepreneurs   will   change,   for   example   by   cash   transfers   in   amount   of   EUR   10.000,-   and   more,   each entrepreneur   is   obliged   to   check   his   client   (sc.      information   about   the   nature   of   the   business,   the   ownership   of   the   client,   the   ongoing   monitoring   of   the   business relationship, reviewing sources of property which applies to trade...).   18.02.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:005 A branch of an enterprise (SK) One   of   the   options   how   a   foreign   person   can   do   business   in   Slovakia   is   a   branch   of   a   foreign   enterprise   (branch   office).   The   branch   itself   does   not   have   a   legal   capacity and   doesn´t   need   a   registered   capital.   Its   internal   relationships,   liability,   management   and   business   activities   are   ruled   by   the   law   of   its   founder   (a   foreign   person   which formes the branch). In   charge   of   the   branch   is   a   head   of   the   branch    (similar   to   a   manager)   appointed   by   the   founder.    The   head   is   entitled   to   undertake   any   legal   acts   relating   to   this   branch on   the   founder´s   behalf.   The   head   of   the   branch   is   available   in   public   Commercial   Register.   The   branch   can   perform   any   entrepreneurial   activity   in   Slovakia   after   gaining a trading license and registering with Commercial Register. After   this   registration   the   branch   becomes   a   tax   payer   and   has   to   keep   accounts   and   submit   tax   return   in   Slovakia.   Naturally   the   branch   pays   a   corporation   tax   only from a profit generated in Slovakia. More details about taxation can be found in Double Taxation Treaties with Slovak Republic and a country of the founder. If the branch does not perform real business activity, it cannot obtain a VAT identification number. If it is economically active and perform business activities, it can obtain a VAT ID but has to pay some deposit (in the amount set by the financial authority). The head of the branch must be EU citizen or citizen of any OECD member state or has a permanent residence permit.  Read more - PDF for download: Author Dr. Soňa Šallai     10.02.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:004 Solutions for internet-based companies (CY) For   companies   specializing   in   programming,   software   and   applications   development,   website   building   or   providing   other   internet   services   is   Cyprus   ideal   tax   and business environment. Benefits of Cyprus jurisdictions: Corporation tax is 12,5% VAT registration is very simple Received invoices from third countries are not affected by the withholding tax LTD can emit securities, whose sales are tax exempted A profit of foreign branch offices is tax exempted Nominees can be used as directors or shareholders Low costs of establishing a real office or also a possibility to use virtual office Cyprus   company   can   form   a   branch   office   or   a   subsidiary   in   any   EU   member   state   if   needed.   The   biggest   advantage   of   the   subsidiary   is   the   legal   capacity,   which   means that any its problems or liabilities are not passed on the parent company so the parent (Cyprus) company possesses higher legal protection. Depending   on   the   specific   business   activities   and   requests   it´s   possible   to   arrange   such   a   setting   of   all   the   company´s   factors   (employees,   dividends,   real   estates, patents and trade marks, connections to third countries and so on) which will guarantee the highest possible legal protections, tax optimisation and risk management. Author Dr. Soňa Šallai     09.02.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:003 Cooperative as an alternative to business companies (SK) The   cooperative   has   an   old   history   in   Slovakia   because   it   was   very   popular   many   years   ago.   But   we   think   it   can   be   still   used   as   a   very   good   option   because   of   its   many advantages: limited liability similarly as in limited liability companies:   members of the cooperative are not liable for the obligations of the cooperative low registered capital: 1250,- EUR it is universal: it can conduct also other than entrepreneurial activities flexibility:   unlike   business   companies   which   do   not   allow   its   shareholders   to   withdraw   at   any   time,   membership   in   the   cooperative   can   be   terminated   anytime (this applies to establishing a membership as well) low administrative burden: it isn´t necessary to prepare any official documents regarding the establishment, termination or transfer of the membership anonymity:   members   of   the   cooperative   are   not   listed   in   Business   Register   or   any   other   public   register.   Only   the   cooperative   itself   maintains   a   list   of   them.   The board of directors is publicly available.   05.01.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:002 Which type of company should I choose? (INTL) It   is   natural   that   choosing   from   various   jurisdictions,   types   of   business   companies   and   related   additive   institutes   today   available   can   be   confusing   even   for   an experienced   entrepreneur.   Many   clients   simply   ask   us   which   type   of   company   is   the   best.   Since   a   general   answer   to   this   doesn´t   exist,   we   wrote   this   brief   overview which might help you with your decision. Slovak   Limited   Liability   Company:   currently   the   most   widespread   type   of   company,   ideal   for   catering   and   restaurant   services,   craft   or   art   activities,   sale   and   purchase, body   care   (wellness,   hairdressers,   beauty   salons..).   The   main   advantages   are   limited   liability   of   shareholders,   simple   structure   and   flexible   administrating.   Disadvantages are a bit high tax burden, complicated VAT registration and a lot of bureaucracy which is constantly increasing. Slovak   Simple   Joint   Stock   Company   (JSA):    best   option   for   those   who   would   like   to   use   the   benefits   of   a   Joint   Stock   Company   (no   liability,   very   low   entrepreneurial   risk, a   possibility   to   adjust   rights   attaching   to   shares   and   their   transferability)   but   don´t   want   to   invest   too   much   money   to   the   establishment.   JSA   has   minimum   registered capital   of   1,-   EUR   (Joint   Stock   Company   25.000,-   EUR)   and   even   with   the   fees   for   the   registration   with   the   Central   Securities   Depository   and   Business   Register are   the start-up costs less than one thousand euros. Read more in PDF document. Author Dr. Soňa Šallai     22.12.2016 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:001 Hybrid form of capital company in Slovakia (SK) There   is   a   new   type   of   business   company   available   for   Slovak   entrepreneurs   since   January   –   Simple   Joint   Stock   Company   (JSA).   National   Council   of   the   Slovak   Republic wanted   to   create   a   company   uniting   a   simple   organisational   structure   and   flexibility   of   Limited   Liability   Companies   with   the   low   level   of   risk   and   limited   liability   of shareholders   from   Joint   Stock   Companies.   JSA   can   be   established   by   the   sole   shareholder   whether   it   is   a   natural   person   or   a   legal   entity   while   the   registered   capital   has   to   be at   least   €   1,00.   The   company   can   emit   various   shares,   some   accompanied   by   special   rights   but   all   shares   have   to   be   book-entered   and   registered.   JSA   must   maintain   a register   of   shareholders   and   publish   these   information   on   the   website   of   Central   Securities   Depository   of   SR .   The   Board   of   Supervisors   is   not   obligatory   but   a reserve   fund   is   –   in   the   amount   of   10%   of   the   registered   capital   at   the   beginning.   Statutory   body   is   the   Board   of   Directors   with   an   unlimited   terms   of   office   and   its   members are   not   subjected   to   a   non-compete   obligation.   Shareholders   possess   extensive   options   regarding   the   disposition   of   shares   including   entries   and   withdrawal   from   the investment, possibility to completely exclude the transferability of shares and a Shareholders´ Agreement which allows them to modify remaining rights.  The   explanatory   statement   explains   that   this   new   type   of   company   is   created   as   an   ideal   form   for   start-ups   which   used   so   far   mostly   Limited   Liability   Companies   but   LLC   are not   optimum   solution   for   relationships   with   investors   and   employees.   The   government   reflects   on   the   fact   that   entrepreneurial   environment   in   Slovakia   consists   mainly   of small   and   medium   sized   enterprises   which   have   the   biggest   problems   establishing   themselves   on   the   market   and   gaining   the   capital.   Simply   stated,   we   have   a   Joint   Stock Company with all its advantages available for anyone. Author Dr. Soňa Šallai    
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