[ESTABLISHING A BUSINESS ENTITY IN SLOVAKIA] 421
As regards joint stock companies, the general rule is that no shareholder can exercise its right to the detriment of another shareholder’s rights and legitimate interests and that the company must treat every shareholder equally. Slovak law specifies qualified shareholders and grants them specific rights. These qualified shareholders are defined as having at least 5% of the registered capital. Such shareholders are entitled to: i) request the convening of a general meeting (however, other shareholders are not obliged to participate in the general meeting); ii) request that a specific point be added to the general meeting’s agenda; iii) request the supervisory board to review actions of the board of directors in the designated matters; iv) request the board of directors to claim the payment of the outstanding part of the issue price from shareholders in default, v) request the board of directors to claim from shareholders the restitution of performance provided contrary to the law. In addition, the minority shareholders may make use of the general rights that the Slovak Commercial Code grants to all shareholders (right to be informed by executive directors, right to demand cancellation of a resolution of a general meeting if statutory or agreed conditions were breached, etc.). 4. Foreign investment, capitalization requirements, residency and material visa restrictions No significant barriers to entry for an offshore party There are no significant barriers for an offshore party to be a shareholder in the above company types. However, some restrictions
may apply to certain types of businesses (e.g., certain regulated activities may be reserved for Slovak or EU nationals or nationals of a country which has concluded a reciprocal treaty with Slovakia). Capitalization obligations The capital requirements for limited liability companies are set out under Section 1.1.1 of this summary and the capital requirements for joint stock companies are set out under Section 1.1.2. Apart from the minimum registered capital, there is another requirement, which is the creation of a reserve fund. A reserve fund is obligatorily created by both limited liability companies and joint stock companies. The Slovak law also contains specific limitations for the companies that are considered to be “in crisis”. A company is “in crisis”, if (i) it technically meets the conditions for bankruptcy or its bankruptcy is imminent, or (ii) its equity to liabilities ratio is less than 8 to 100. The threat of bankruptcy is not directly connected with the immediate threat of insolvency or restructuring proceedings, but it is connected with several consequences. One of the consequences is that a company, if it is in crisis, or if it would fall into crisis as a result of such performance, may not return the “performance replacing its own resources”. “Performance replacing own resources” includes providing credit or loan or other similar performance with the same economic effect to the company during its crisis (or even before its crisis, if the payment term was postponed or extended during the company’s crisis) by inter alia a person/entity whose direct or indirect share represents as least 5 percent of the registered capital or on the voting rights or he/she has a similar influence on the company or a person acting on their behalf and some other qualified persons (statutory representatives and related
ILN Corporate Group – Establishing a Business Entity Series
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