The Company Director Checklist – Slovakia
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INTRODUCTION
A company director means a very wide term within the Slovak legal regulation, therefore it is necessary to distinguish
between a director in the position of (i) a statutory body (or a member of statutory body) of company as defined in Act No.
513/1991 Coll, the Commercial Code, as amended (the “Commercial Code”), or (ii) a managing employee as defined in Act
No. 311/2001 Coll, the Labour Code, as amended (the “Labour Code”). This Company Director Checklist has been
prepared and designed as a practical guide to provide a brief introduction and summary on directors’ duties, as the
statutory body or members of statutory body of limited liability company or joint stock company under the Commercial
Code. In general, the statutory body, i.e. the executive director in the limited liability company or a board of directors in the
joint stock company, directs activities of the company and makes decisions in all matters not vested to competencies of
company’s other bodies (e.g. shareholders’ general assembly or supervisory board) and acts for and on behalf of the
company. Therefore, any reference to the “director” mentioned in this Checklist shall refer exclusively to the director being
in the position of the statutory body or member of the statutory body as provided above.
Disclaimer: As mentioned above the summary provided herein merely addresses main general descriptions of legal
regulation of position of the directors and may not be considered as a comprehensive legal advice to a particular case. All
information contained herein are based on the laws of the Slovak republic valid as of 1 June 2011.
Action/Issue
Comments/Notes
Before Appointment
1. Understand
Why you have been selected and what you can A director represents a company and its interests
bring and how you can contribute to the towards third persons. The director manages
company;
activities of the company, acts for and on behalf of
Interests of the company and its shareholders in the
company
and
decides
on
all
matters
connection with the main business activity of the concerning the company. He is liable to perform
company;
his function with due professional care. Therefore,
Rights and duties and overall responsibilities
the director before accepting the appointment into
linked with the function;
the function shall bear in mind and consider, inter
Corporate structure and governance procedure alia, the following:
2. Meet
and preferences;
responsibility to act in interests of the company
The conditions of a contract to be agreed upon
and all its shareholders;
between the company and the director in order
his professional qualification and experience in
to perform his function.
respect of business activities of the company;
details on the corporate structure and
governance procedure and structure as
provided in the corporate documents of the
company.
Other
directors
(i.e.
managing
employees, The communication with the mentioned person(s)
financial director(s) or recently retired directors);
is advisable in order to understand and familiarize
Company lawyer;
with the history and current position on the market,
Senior and top management team;
background, relationships within the company,
Auditor(s);
business activities and strategy and day to day
Action/Issue
Comments/Notes
Employees’ representative.
operation of the company necessary to duly
perform the function of the director in compliance
with
statutory
requirements
provided
in
Commercial Code (for further details please see
section No. 7 below).
3. Review
Past five years historical financial statements of
Review of financial statements in order to
the company;
acquaint
Company’s Memorandum of Association or
company;
Foundation Deed and Articles of Association, if
Review of corporate documents for any
applicable;
restrictions or prohibitions applicable to the
Minutes
of
the
general
assemblies
the
economic
situation
of
the
of
function of director (eg his rights stipulated in
shareholder and adopted resolutions for prior
the Commercial Code) and any specific
year within the company;
provisions related to the director;
Relevant official publications for prior year, if
Review of minutes of general assemblies and
applicable.
resolutions
recently
adopted
in
order
familiarize with the current situation and issues
within the company;
Review any relevant publications in the
Commercial Bulletin of the Ministry of Justice
of the Slovak Republic or other official or
unofficial sources necessary for assessment of
general market situation of the company.
Ongoing Duties
Action/Issue
4. To whom duties are
owed?
Comments/Notes
The company;
According to the provisions of the Commercial
The shareholders;
Code (Section 135a and 194), the director is liable
In certain specific cases to creditors.
to perform his function in compliance with
company’s interests and interests of all its
shareholders. Creditors of the company may claim
compensation of damage from the director in case
their debts cannot be satisfied from the company’s
assets due to breach of duties of the director.
5. Nature of duties.
The
director
shall
ensure
the
correct Under Section 135 and 192 of the Commercial
administration of prescribed records (eg list of Code,
the
director
shall
submit
shareholders) and accounts, and to inform the ordinary/extraordinary or consolidated financial
shareholders on the business situation of the statements for approval to the general assembly
company. The director also decided on business
of the company, proposal on division of profit or
operation of the company and related business payment
plans and objectives of the company;
of
memorandum
loss
of
in
compliance
association
or
with
the
articles
of
The director is also obliged to file an application association of the company, if applicable. In the
for registration of changes with the Commercial case of mandatory audited financial statements,
Register, if such changes occurs;
also an annual report must be submitted to the
The director shall also file the prescribed general assembly.
corporate documents with the Collection of Deed
of the Commercial Register;
The director shall be liable for damage caused to
The director is also obliged to provide written the company by breaching his duties when
information on substantial plans of business performing his function. When determining the
Action/Issue
Comments/Notes
operation and administration of the company for liability of the director, the provision of Section
next period to the supervisory body of the 261(3)(a) of the Commercial Code shall apply,
company, if applicable, as well as to provide to providing that
the relationship between the
the supervisory body information on presumed company and its director is always a business
development of the financial situation of the relationship. Therefore, the liability for damage
company;
cased by the director will be governed by the
The directors is also entitled to inform the provisions of the Commercial Code. Should the
supervisory body without undue delay on any company have more than one director, they are
material circumstances which may affect the liable jointly and severally. The company, a
development of business activity of the company shareholder acting on behalf of the company or a
and its financial situation, particularly its liquidity.
creditor, as the case may be, may claim for
damages towards all directors or only towards one
of them.
The director may be also held criminally liable for
action/behaviour which contravenes provisions of
Act No. 300/2005 Coll. the Criminal Code, as
amended (the “Criminal Code”). The director, in
connection
with
his
function
performed
the
company, may be held liable mainly for economic
and
financial
criminal
offences
(e.g.
fraud,
fraudulent insolvency, abuse of creditor, abuse of
competition, non payment of taxes etc.)
Action/Issue
6. What is the duty of
Comments/Notes
The director is obliged to execute his powers In accordance with Section 135a and 194 of the
due professional
with due professional care and in accordance Commercial Code director is obliged to obtain and
care?
with the best interest of the company and all its take into considerations in decision making all
shareholders. The Commercial Code, therefore, relevant and objectively plausible and available
objectively
requires
the
presumption
of information related to the subject matter of the
professionalism in relation to the performance of decision, which may determine his final decision.
function of director.
The
director
may
not
disclose
confidential
information and facts which disclosure to third
persons could damage the company or threaten
its interests or interest of its shareholders, and
may not prefer its own interests, interests of third
persons or interests of only some of the
shareholders of the company to the interests of
the company when executing his powers.
It is possible that the interest of particular
shareholders may differ, therefore the director is
bound by the will of the majority presuming that
the minority rights are not violated.
7. How much can you
The law does not provide prohibition to delegate For example, the director is entitled to ensure the
delegate or rely on
certain tasks to others (e.g. on basis of special administration of special required evidence and
others?
power of attorney, special contracts etc.), account by other third parties (e.g. such as
however the director will in any case remain external
accounting
company,
external
Action/Issue
liable for performance of his function.
Comments/Notes
administration services company etc.), however
this arrangement does not release the director
from the liability for damaged towards the
company.
8. What is the position
The Commercial Code stipulates mandatory Under Section 136 and 196 of the Commercial
on conflict of
provision regulating non-competition obligations Code, unless the memorandum of association or
interests?
of the director, while the memorandum of articles of association do not provide for further
association or articles of association may provide restrictions, the director cannot conclude in his
for further requirements in this respect, not own name or in his own behalf any transactions
regulated by the Commercial Code.
relating to the business activity of the company,
intermediate the business of the company for
other persons, participate in the business of
another company as a shareholder with unlimited
liability, perform the activity as a statutory body or
member of statutory body of another legal entity
with a similar scope of business, except for the
case when the company has a share in such legal
entity.
Special Circumstances
9. What is the position
The insolvent company is obliged to file a motion
The director has the obligation to file a motion
if the company may
for declaration of bankruptcy within 30 days as of
for declaration of bankruptcy in the name of
be insolvent?
date on which it learned or by observance of due
the insolvent company.
professional care it might learn on its insolvency.
The director may be also liable for damage
Action/Issue
Comments/Notes
The company is insolvent if it cannot pay its
caused to the company by filing a motion for
debts when they come due and has more than
declaration of bankruptcy, however the court
one creditor or if the company became over-
declares that the company is solvent.
debted (its due liabilities exceed it assets).
The director as the statutory body of the
insolvent company is obliged to provide
cooperation to the bankruptcy trustee during
the bankruptcy proceedings.
The director has also obligation to participate
in the creditor’s committee upon written
request of the latter, as well as the director is
obliged to participate in the creditor’s meeting.
10. What special
The director has obligation to publish public float
responsibilities and
in case of increase of registered capital of the
liabilities are
company by public float.
associated with a
float?
11. What special
The Commercial Code does not provide any
responsibilities and
special responsibilities of director connected with
liabilities are
the takeover. The director shall at any time
associated with a
perform his function with due professional care,
takeover?
therefore shall not represent particular interests
Action/Issue
Comments/Notes
of only one shareholder or part of shareholder, or
its own interests, and shall always proceed with
the best intentions and practice which are in the
interest
of
the
company
or
majority
of
shareholders without violating the rights of
minority shareholders.
12. What special
The Commercial Code does not provide any
responsibilities and
special responsibilities of director connected with
liabilities are
a joint-venture. Please see our response in the
associated with a
section No. 11 above.
joint venture?
Self Defence
13. Exemptions from
liability.
The Commercial Code provides for specific Exemptions when the director is not deemed to be
reasons for exoneration of the director from the liable for damage caused to the company are as
liability for damaged caused to the company.
follows:
if he demonstrates that he acted with due
professional care, in good faith and in the best
interests of the company,
if he was simply implementing a resolution of
the general assembly of the company (unless
such resolution was in breach of binding legal
regulation, the memorandum of association of
Action/Issue
Comments/Notes
articles of association of the company).
However, the right of the company to claim for
damages towards the director cannot be excluded
or reduced (by the provisions of memorandum of
association or articles of association of the
company), and may be waived by the company or
contractually settled between the company and
the director only after three years from the date
when the damage occurred and only if the general
assembly of the company approves the same. Any
agreement concluded between the company and
the director excluding or limiting the liability of
director is prohibited.
14. Insurance.
Insurance of company directors falls into the At
the
present
time,
almost
all
insurance
category of non-compulsory insurance; therefore companies licensed to provide non-life insurance
it is the director himself who decides whether or carry liability insurance in their product portfolio.
not to subscribe for liability insurance.
The conditions of the policy, the amount of
insurance premium and other relevant issues
depend on the particular insurance company and
on the special provisions of the insurance policy.
Action/Issue
15. How do I resign?
Unless provided otherwise in the memorandum
of association or articles of association, the
resignation of director shall be effective as of the
first day of meeting of the body competent to
appoint or elect the new director following the
day of submission of resignation from the
function; if the director resigns from his function
directly at the meeting of the body competent to
appoint or elect the new director, the resignation
is effective immediately.
Comments/Notes