In 2019, almost all companies will be obliged to register the so-called beneficial owner of their company with the Commercial Register. As 2018 ended, accounting periods in most companies ended as well, triggering several legal and administrative duties. These cannot be avoided, however, a new Law against Bureaucracy is now in force which can save companies at least some time and costs. On 14 January 2019, a new amendment to the Trademark Act was introduced, which provides a good opportunity to register new types of trademarks (e.g. sound protection) which could not have been registered before. Moreover, since the beginning of 2019, a special levy now applies for food retail businesses.
Obligation to register beneficial owners to the Commercial Register
In 2017, the Act on the Register of Public Sector Partners (ARPSP) entered into force in Slovakia. The Act introduced the obligation to register and publish entities which receive or intend to receive funds from public resources (so-called public sector partners) and the beneficial owners of these public sector partners in a specific Register of Public Sector Partners (RPSP). The register is public and, in principle, anyone wishing to participate in procurement must be registered. Further, according to new act, beneficial owners must also be registered in the Commercial Register.
In connection with amendment of the Anti-money Laundering Act, and under the amendments to the Commercial Register Act, almost all companies are obliged to file a notification regarding registration of their beneficial owners to the Commercial Register by 31 December 2019. This applies to both new and existing companies. Failure to do so can result in a fine of up to EUR 3,310, so it is better not to wait until the last moment.
It is also important to note that if a company has already registered its beneficial owners in the Register of Public Sector Partners (RPSP), this registration does not substitute the obligation to register beneficial owners in Commercial Register and vice versa.
Unlike in the RPSP where beneficial owners' data is published, the data will not be publicly available via the Commercial Register (online or in Commercial Register extracts), but will primarily serve only the public authorities purposes.
The law defines beneficial owner. However, this will need to be assessed for each company separately, taking into account, i.a. the company form, as well as its structure, deed of incorporation, statutes, and current individuals and entities managing or controlling the company.
A special application form is now available for registering beneficial owners in the Commercial Register, and there is no registration fee. We are experienced in performing similar corporate operations, so please contact us should you have any questions.
A novelty in Slovakia is also the Law against Bureaucracy which aims to make more effective use of information technology in public sector administration. In its current wording, the Law will in particular improve information flow between the authorities, as a result of which the authorities should obtain information from the Commercial Register, Trade Register, Criminal Records Register and Real Estate Register. It is expected that this Law will save citizens and companies over EUR 10 million. In addition, it is planned that the Law will be gradually extended to other areas of contact with public authorities later.
New types of trademarks
Effective as of 14 January 2019, a new amendment to the Slovak Trademark Act introduces, i.a., the opportunity to register new types of trademarks. The requirement of graphical representation of trademarks is removed, therefore, in line with European case law (Sieckmann case C-273/00), it will be possible to register any type of trademark subject to meeting the relevant legal requirements (especially distinctive character, and the ability to be represented in the Trademark Register). This will allow companies to register various new types of trademarks, such as sound (potentially holograms).
All opportunities to improve a company's position ahead of its competition should be taken. Our law firm has successfully represented a number of major companies in registering trademarks and we are happy to assist you with the registration process as well.
New levy for retail businesses
Since 1 January 2019, retail businesses now have to consider a new special levy. According to the new Act on levy for retail businesses No. 385/2018 Coll., the levy of 2.5% from net turnover shall be paid for every pay-out period of three consecutive calendar months of the relevant accounting period. The levy applies to those retail businesses which fall under the definition stipulated by law, i.e. a group of business operations with the same (interchangeable) trade name operated by the same entrepreneur (or joint entrepreneurs) in the food sector with at least 25% of the net turnover coming from the sale of food to end-consumers, and having operations in at least 19 districts of Slovakia, and with operations which have a unified design and joint marketing activities. Thus, the levy is primarily targeted at larger supermarket chains. The explanatory statement to this law stipulates that the profit from this levy should be, i.a., dedicated to improve the position of Slovak food producers and farmers.
General meeting, approval of financial statements
As the calendar year ended, accounting periods in most companies ended as well, triggering several important duties for companies. First and foremost, certain documents must be prepared and discussed at the annual General Meeting (GM). The executive directors shall submit to the GM for approval the financial statements and proposals for distribution of profits in accordance with the deed of incorporation and statutes. If the company is obliged to issue an annual report (in cases where the financial statement has to be approved by an auditor), the executive directors shall submit to the GM for review an annual report attached to the financial statements. These must be approved by the GM and subsequently published. Even though these are not new obligations, we wish to kindly remind you that they must be complied with by the prescribed deadlines in order to avoid possible sanctions.
Bird & Bird is an international law firm offering its clients complex services, including advisory in the area of corporate law. Our team of experienced lawyers has a deep understanding of the key sectors. If you are interested in a consultation, please do not hesitate to contact us.
This article is of informative character only and includes just a basic overview of the most common situations. Therefore, it does not have to cover the conditions of specific cases and does not constitute legal advice.