THE MINISTRY OF JUSTICE OF THE SLOVAK REPUBLIC HAS SUBMITTED A DRAFT LAW ON THE TRANSFORMATION OF COMMERCIAL COMPANIES AND COOPERATIVES AND ON THE AMENDMENT AND ADDITION OF CERTAIN LAWS TO THE INTERDEPARTMENTAL COMMENT PROCEDURE

#74The Ministry of Justice of the Slovak Republic has submitted a draft law on the transformation of commercial companies and cooperatives and on the amendment and addition of certain laws to the interdepartmental comment procedure

The draft law responds to the need to ensure the transposition of Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 2019 amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers or acquisitions and divisions (hereinafter referred to as "directive") into the Slovak legal order.

Also, the goal of this proposal is to produce a uniform, comprehensive and clear legal regulation, which fully replaces the current legal regulation.

Act No. 513/1991 Coll. The Commercial Code, after several amendments and ongoing amendments to the directives, is chaotically organized and fragmented. The draft law and the transposition of the directive give room for the Commercial Code to undergo a proper revision.

The main objective is to provide adequate and, above all, stronger protection to owners of business interests or shares, company creditors and employees.

The translated Bill introduces new terminology. Transformations and cross-border transformations will represent new changes in the company, especially regarding the company's capital, the creation of new companies and the dissolution of previous ones, and the subject of the obligation will change to the creditor. We also have the introduction of new institutes:

1. secession – an institute corresponding to a partial division, when the divided company does not cease to exist, and its part is separated into another company.
2. cross-border division – this is a division of a company where the successor company is a newly established company and there is a cross-border element in the form of at least one participating or successor company registered in another EU member state,
3. cross-border change of legal form – the company changes its registered office from one member state to another, and at the same time its legal form also changes in accordance with the law of the state after the change of legal form.