A new amendment to the Slovak Commercial Code (Act No. 9/2013 Coll.) has been passed by the Slovak legislator (the "CC Amendment"), mainly as a result of implementation of the EU directive on combating late payment in commercial transactions. Effective 1 February 2013, the CC Amendment brings forward the following key changes:
New regulation on late payment in commercial transactions
The most significant changes in this regard concern (i) payment periods and (ii) statutory interest for late payment. The ultimate goal of these changes is to prevent late payments in commercial contracts concluded after 1 February 2013.
According to the previous regulation, the maturity of monetary obligation was left to contractual freedom, echoing the almost unlimited will of the contractual parties. The CC Amendment, although still providing the contractual parties with room to agree upon the payment period, narrows down the choice to a maximum of 60 calendar days from the later of (i) the date of receipt of the invoice by the debtor (or an equivalent request for payment); or (ii) the date of fulfillment of the creditor's claim. Longer payment periods are admissible only if it is not grossly unfair with respect to the creditor’s rights and obligations.
If the debtor falls into arrears with its monetary obligations, interest for late payment applies in the amount as agreed between the parties. In the absence of such an agreement, the debtor is obliged to pay statutory interest for late payment calculated as the sum of the interest rate applied by the European Central Bank to its main refinancing operations effective on the first day of the arrears and the margin rate of nine percentage points. In addition, the debtor shall be liable to pay the creditor a lump sum compensation for recovery costs in the amount of EUR 40.
Special regulation of certain aspects of late payments applies where the transaction includes consumers or public authorities, or payment in installments.
Corporate law-related change - new formal requirement for decisions of the general meeting in a limited liability company
The CC Amendment mandates that the signature of the chairman of the general meeting be officially verified in case this corporate body resolves on (i) the appointment, recall and remuneration of the company's executive director and the appointment or removal of a proxy; (ii) the approval of the agreement on the sale of the enterprise (or part of it); (iii) the increase or reduction of the registered capital; (iv) in kind contributions; (v) winding-up of a company, or its conversion into another corporate form. The same requirement applies to one-man companies in which the decision-making power of the general meeting is exercised by the sole shareholder. In this light, the signature of the sole shareholder -- or in the case of shareholder - legal entity, of its authorized representative -- shall be officially verified.
Nevertheless, it is interesting to note that these formalities do not affect circular resolutions on the above specified matters passed by shareholders outside the company's general meeting (i.e. circular voting of the shareholders).
Other changes
Finally, the CC Amendment introduces certain other changes, namely (i) additional clarity on the process by which employees elect supervisory board members in those joint stock companies in which employees´ participation right applies according to law or articles of association; and (ii) extension of unfair competition protection by ban on usage of business name or designation of enterprise which might cause substitution of the business for a public register.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.