Slovak Company Law in the Digital Era

Slovak Company Law in the Digital Era Presented by: Dr. Mrázová Date: 9 May 2024 Is Slovak Company Law Ready For a Digital Age ? - Key Questions: • Is current company law regulation sufficient and able to respond to new digital trends and requirements of legal practice? • How the digitalization has already changed and will change (not only) the Slovak company law? - The practical importance of the technological developments was particularly highlighted during the global pandemic. - MS has introduced multiple interim measures, which made the use of digital tool more accessible during the company's lifecycle. - National legislative approaches of each MS differ significantly. The European Solutions For Digitalisation - Partial efforts to create a harmonized framework on the use of digital tools (Directive 2007/36/EC: exercise of shareholders' rights in listed companies, Directive 2017/1132: interconnection of business registers,...) - Digitalization Directive (Directive (EU) 2019/1151 of the European Parliament and of the Council of 20 June 2019 amending Directive (EU) 2017/1132 as regards the use of digital tools and processes in company law - - Scope of the Digitalization Directive is limited: • Online formation of companies • Online registration of branches • Online filling of documents and information It does not extend to all areas of a company's life cycle. EU Rules On Online Formation Of Companies - Digitalization Directive harmonizes various aspects of online formation of companies, but only to the certain extend - - Minimum sets of harmonized rules: • Fully online formation as an alternative to standard formation • The accessibility is guaranteed to founders who are EU citizens • The procedure for specific corporate legal forms System of safeguards to effectively counteract the misuses of digital tools and fraud in company law - No harmonization of incorporation rules (e.g. rules on templates of AOA) Slovak Solution: Simplified Formation Of Limited Liability Company - On 1 February 2023 came into effect Amendment to the Slovak Commercial Code introducing simplified online formation of limited liability company - Since 1 October 2020, the registration of any legal form of company to the Business register can be filed solely online (all documents in electronic form practice ?) - Two alternatives for limited liability company: • Standard formation with online registration • Simplified formation with an electronic template of article of association - Special substantive requirements (Sec. 110a (2) Commercial Code) - Additional procedural requirements (Sec. 7a (1) Act on Business Register) Registration Of Limited Liability Company By Notary - Since 1 November 2023 it is possible to file a petition for the registration of limited liability company by notaries as external registrars: • Verify the fulfilment of all legal requirements • Execute the entry to the Business Register - Exceptions: transformation, cross-border transformation, change of legal form - From January 2025 notary services extended with a possibility to register other corporate forms Virtual Shareholders' Meeting In Private Companies - EU Level • Enabling electronic participation in shareholders' meetings only for listed companies (Directive EU 2007/36) • The Informal Company Law Expert Group (ICLEG) Report (August 2022): private companies - Slovakia • No general provisions on virtual shareholders' meeting- assumed it is forbidden for private companies • Exception: listed joint-stock companies • Interim measures during pandemic not in force now • Recodification proposal:  Waiving the requirement of personal participation  Technologically neutral provisions Virtual Registered Office As A New Innovative Development? - Currently, all Member State require a physical location for a registered office - Slovakia: „virtual seat" has different meaning - EU: Initiative Upgrading digital company law (2021) mentioned the concept of virtual registered office the ground-breaking digital development? - EU Commission: Impact assessment report (SWD(2023) 178 final) Introduction of the measures for virtual registered offices at EU level was discarded for reasons of political and legal feasibility • Concerns: facilitation of the operation of shell companies, fraudulent behaviors and money-laundering, raising questions of applicable law and serving of official documents