• Responsibility of statutory bodies
• Residency permit requirements
• Agreement on execution of function
• Duty of professional care/responsibility for damages

Statutory bodies/members of statutory bodies of business companies

Responsibility of statutory bodies

The Amendment introduces a new regulation of responsibilities of statutory bodies of the business companies, including new regulation of actions for compensation of damage caused to the company against members of its corporate bodies that may be initiated by shareholders of the company as well as by creditors of the company.

Under Section 13 para.4 of the Amendment, any limitation of powers and competencies of statutory body to act for and on behalf of the company is not effective towards third persons, even despite its publication.

Residency permit requirements

Further, under Section 30 para.3 of the Amendment, in case of a foreigner, from either EU or OECD country, who is registered in the Commercial Registry as a person entitled to act in the name and on behalf of the company (as its statutory body) a long-term residence permit for the Slovak Republic will not be required any more as of the moment of publication of the Amendment in the Collection of Laws (unlike the most of provisions of the Amendment that are to become effective from January 1, 2001).

Agreement on execution of function

Under the Section 66 para.3 of the Amendment, the relation between a company and a member of its corporates body or shareholder/partner of the company while arranging matters of the company is accordingly governed by provisions of the Commercial Code regulating the mandate agreement, unless stipulated by the ''agreement on execution of function`` or by law otherwise. The agreement on execution of function has to be made in written form and has to be approved by the GA of the company or by all shareholders with unlimited liability for obligations of the company. In case of joint stock companies, the articles of association may stipulate that the agreement on execution of function between the company and the member of the Board of Directors (the ''BoD``) shall be approved by the Supervisory Board (the ''SuB``).

Duty of professional care/responsibility for damages

The Amendment introduces several changes into the legal regulation of statutory bodies such as the executive in limited liability companies (the ''Executive``) and the BoD in joint stock companies as well as into the regulation of responsibilities of these persons. The legal regulations of the above in limited liability companies and in companies limited by shares have been substantially harmonised by the Amendment. Under Section 135a (as for Executives in limited liability companies) as well as Sec. 194 para.5 et seq. (as for the BoD in companies limited by shares) of the Amendment, members of the statutory bodies are obliged to perform their powers with professional care in accordance with interests of the company and all its shareholders. Members of the statutory bodies that breach their duties are obliged to compensate the damage caused to the company, being responsible for the damage jointly and severally. A member of the statutory body is not responsible for damage caused to the company providing that he/she proves that he/she acted with professional care and in good faith that he/she is acting in the company's interest. Members of the statutory bodies are also not responsible for damage caused to the company while executing decision of the GA. This exemption does not apply if the decision of the GA was in contrary to legal regulations or the Articles of Association (the ''AoA``). If a limited liability company created the SuB, executives of such company are not released from their responsibility for breach of their duties even if their actions were approved by the SuB. Furthermore, any agreements between the company and a member of its statutory body excluding or limiting responsibility of the member of the statutory body are prohibited. The AoA also cannot limit or exclude responsibility of the members of the statutory body.

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