The basic codex arranging the field of commercial law and the conditions of doing business in the Slovak Republic is Act No. 513/1991 Coll. Commercial Code, as amended (hereinafter only the “Commercial Code”), which is systematically divided into four parts. The Commercial Code contains the legal arrangement for commercial companies, associations, and commercial binding relations, including individual types of contracts, but it also establishes the commercial register, the business of a foreign entity and economic competition.
General conditions of doing business in the Slovak Republic
Doing business is, according to the Commercial Code, understood to be systemic activities performed independently by an entrepreneur on his/her own behalf and on his/her own responsibility for the purpose of achieving a profit. Only activities satisfying the stated features may be qualified as doing business.
The Commercial Code defines four groups of business, specifically:
- a) a person recorded in the commercial register (especially commercial companies and associations),
- b) a person who does business on the basis of trade licence authorisation,
- c) a person who does business on the basis of other than a trade licence, arranged by special provisions (e.g. free professions, such as: veterinarians, tax consultants, attorneys; likewise banks, insurance companies, securities traders and others belong here),
- d) a natural person who performs agricultural production and is entered into the record according to a special provision. (These persons perform activities on the basis of Act No. 105/1990 Coll. on Conducting Private Business, are entered into special registers, which are kept by a municipality).
The Trade Licencing Act, which arranges the conditions of doing business on a trade licence, is linked to the arrangement in the Commercial Code. According to the Trade Licencing Act a trade licence is understood to be systematic activities operated independently, on one’s own behalf, at one’s own responsibility, for the purpose of achieving a profit and under the conditions provisioned by the Trade Licencing Act. The Act also contains negative definitions, that is, what is not considered to be a trade licence.
The Ministry of Justice of the Slovak Republic regularly updates the list of so-called free trade licences; this is a list of activities which can be performed for which no special authorisations are needed, but only the fulfilment of general conditions of the Trade Licencing Act. The operator of a trade licence may be a natural person, age 18 years or older, who is qualified for legal acts and of respectable character; the same is true for a legal entity, in which the natural person who is its statutory body must satisfy these conditions.
With a business of a foreign entity or organizational element of the business of a foreign entity the head of this business or element of the business of a foreign person must satisfy the stated conditions.
For the performing of other activities specific authorisations are necessary: a document on professional qualification, entry in the special record of fulfilment of other conditions provisioned, whether by the Trade Licencing Act (e.g. fixed and crafts trade licences) or special legal provisions.
Among the basic features of each entrepreneur is in particular its commercial name and seat. The entrepreneur lists these data alongside others (identification number of the person, number of the record in the register, legal form) in official communications, on all documents as well as on the home Web page, if one has been set up.
The seat of a legal entity and place of doing business of a natural person is the address which is recorded in the commercial register, the trade licence register or other record, as the seat or place of doing business.
The commercial name represents the name of the entrepreneur who performs the business activities. The Act does not specify what should form the root of the commercial name; this is left to the decision of the entrepreneur, but it does specify the basic criteria which need to be taken into consideration with the creation of a commercial name. The commercial name cannot be compatible with the commercial name of another entrepreneur and cannot evoke a false image regarding the entrepreneur or the subject of his/her business. The commercial name of a natural person is that person’s name and surname and may also contain an addition differentiating the person of the entrepreneur or type of business (e.g. Jozef Novák, Jozef Novák – roof coverings). The commercial name of commercial companies, cooperatives and legal entities which are recorded in the commercial register always contain the name under which they are recorded into the commercial register. The commercial name of a legal entity which is recorded into the commercial register is the name under which it was organized. In the case of legal entities it also contains an addendum with the labelling of the legal form of the business (e.g. Opal v.o.s.).
The Commercial Register and the Trade Licence Register
The Commercial and Trade Licence Register are the most commonly used records in relation with performing business activities. The legal arrangement of these registers is contained in Act No. 455/1991 Coll. on Trade Licencing (the Trade Licencing Act), as amended, and in Act No. 530/2003 Coll. on the Commercial Register and on changes and supplements of certain acts, as amended.
The Commercial Register is a public list of data provisioned by law, a component of which is also a collection of documents. An entry, change and deletion of data from a Commercial Register is performed by so-called registration courts, which are district courts in the seat of a regional court, namely for legal entities which have their seat in the district of this regional court. Registration courts are: District Court Banská Bystrica, District Court Bratislava I, District Court Košice I, District Court Nitra, District Court Prešov, District Court Trenčín, District Court Trnava, District Court Žilina.
The Trade Licence Register contains a set of data on entrepreneurs determined by the Trade Licencing Act. An entry, change and deletion of data are performed by district offices through the information system of the trade licencing businesses, the administrator of which is the Ministry of Interior of the Slovak Republic.
Business of a foreign entity
Foreign persons/entities may do business on the territory of the Slovak Republic under the same conditions and in the same range as a Slovak person/entity, so long as the nothing else follows from the law. According to the Commercial Code a foreign entity is understood to be a natural person with residence or a legal entity with its seat outside the territory of the Slovak Republic. It is possible to speak about the business of a foreign entity on the territory of the Slovak Republic, if it has a business or one of its organizational elements located on the territory of the Slovak Republic.
Foreign entities are obligatorily recorded into a commercial register. Authorisation of a foreign entity to do business on the territory of the Slovak Republic arises as of the day of entry of the business or organizational element to the commercial register and expires on the day of its deletion. The registration obligation does not relate to natural persons doing business on the territory of the Slovak Republic who are recorded into the commercial register, so long as they have residence in one of the member states of the European Union or Organization for Economic Cooperation and Development. A foreign entity may for the purpose of doing business share in the founding, become a partner or member of a Slovak legal entity or establish one him/herself.
A foreign entity, like a Slovak entrepreneur, is obligated to state its basic data (commercial name, seat or place of doing business, legal form and identification number, if one has been assigned, indication of the register in which the business is recorded and the number of the record) on its commercial documents and in official communications. Likewise, it shall enter the indication of the foreign commercial register or another record to which it is recorded and data on the entry in this register or the record, if the law of the state which administers to it requires such an obligation.
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