25.05.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:024, Edited:18.08.2017 SHHow 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 SHNew 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 claimant24.03.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:022, Edited:21.09.2017 SHUnified register of all bank accounts in the Czech Rebublic (CZ)In the Czech Rebublic the Central Registry of bank accounts for all entities shall be established as of 1st January 2018. The register will include data on all bank account details of each client in every bank in the Czech Republic. The government has cited the reason for instututing this database as the simplification of the procedure of public authorities when obtaining individual bank accounts of specified persons and shall help to expose criminal activity. Up to now it was necessary to contact each credit institution individually and to apply for production of account statements. Following the new measure it will be sufficient to ask the Czech National Bank for the information from the Central Registry. The information thus reported shall identify the data about the client, name of the bank institution, bank account number, date of opening and closing the bank account, date of commencement and termination of the client´s authorization to handle the financial resourses on the account. The Czech National Bank is obliged to update and report all changes on the bank accounts of all their clients on a daily basis. The information will be stored for a period of 10 years from the date on which the given account was cancelled.Act No. 300/2016 Coll., on Central Bank Accounts Registry, came into force, as a piece of legislation recommended by the European Union aimed at prevention of misusing the financial system (in connection with terrorist financing and money laundering). Only the public authorities specified in §6 are allowed to request information from the database (tax authorities, law enforcement authorities, intelligence services....) . The evidence does not include information about account movements or balances. The system shall be monitored by the parliament. The system is based on the model of other EU member states such as France and Spain without breaching of the banking secrecy. 24.03.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:019, Edited:21.09.2017 SHContract on the Conclusion of the Future Contract (SK)The participants do hereby commit, that they will conclude a contract at an agreed time and the content of the contract shall be approximately agreed upon. The contract on the Conclusion of the Future Contract must be in writing.The contract on the Conclusion of the Future Contract must contain:identification of the contracting parties, time period for conclusion of the future contract (otherwise it is not valid) and the generally specified subject of the future contract. After the future contract has been signed, both contracting parties obtain the right to request for the contract conclusion according to the previous negotiations. If one contracting party fails to fulfil their obligation, the other party may request the court to determine the content of the contract or to demand compensation. In the event that the parties are unable to agree on the content of the Future Contract, the participants may appoint a third person who determines it. The right to demand the determination of the contractual content from the third person expires one year from the time when one party invited the other party to conclude the future contract. Commitment to conclude the future contract shall expire in two cases: - if neither of the contracting parties invite the other party to conclude the contract at the agreed time- if the circumstances have changed in such a way that the conclusion of the contract is not reasonable.If the participants don´t know exactly which type of contract to conclude in the future, they can agree on the conclusion of an untitled contract. Contracts on the Conclusion of the Future Contract are governed by Commercial law (§289) and Civil law (§50a). There is only one significant difference: in case the contract is concluded by the Civil law, it requires mutual binding of both contracting parties. In case the contract is concluded by the Commercial law, it can be concluded only in favour of one contracting party. This party is entitled to demand conclusion of the future contract but it´s not obliged to demand the conclusion. Author Dr. Soňa Šallai20.03.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:018, Edited:21.09.2017 SHBasic information about shares in Slovak legal system (SK)This is only a general informative article about shares. Forms, records, classes or rights attaching to the shares are specifically regulated in individual jurisdictions. We would be very pleased to provide you with the detailed information personally. What are shares ?Shares – securities which represent the rights of the shareholder to participate in the management of the company and the share of its profit according the law and the articles of the joint-stock company. The rights of the shareholder toward the company shall be applied only by the person, who is entitled to execute these rights on a specified date which is established by the law or by the articles of association… Read more in attached PDF document.03.03.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:013, Edited:24.03.2017 ELChange 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 www.orsr.sk) 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 ELHow 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 ELChange 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 (www.katasterportal.sk), 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:010Why 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 Šallai23.02.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ARTID:009, Edited:24.03.2017 ELNew 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:005A 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 Šallai10.02.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:004Solutions 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 officeCyprus 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 Šallai09.02.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:003Cooperative 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:002Which 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 Šallai22.12.2016 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ARTID:001Hybrid 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 www.cdcp.sk. 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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