The Commercial Register
All forms of business entities, including their branches and organisational units, must be registered in the Commercial Register. Registration of individual entrepreneurs is, in general, voluntary.
The Commercial Register is maintained by the courts. A business may only commence operations in Slovakia once the registration formalities have been completed.
The Commercial Register Act which took effect on 1 February 2004 introduced some major changes in the registration procedure:
the Registration Court should complete the registration within five working days of the day of delivery of the application special forms must be used when filing applications for registration in the Commercial Register applications for registration have to be accompanied by the annexes listed in the relevant Decree of the Ministry of Justice.
The act on Bankruptcy and Restructuring, (the "Bankruptcy Act"), fully effective as of 1 January 2006, applies to the settlement of claims against a debtor who has gone bankrupt. The aim of bankruptcy or restructuring is to satisfy the claims of the creditors vis-a-vis the insolvent debtor on a proportional basis. The act brought many important changes, e.g., it stipulates the parties involved and increases their responsibility, reconciles conflicting provisions of international private and procedural law, regulates cross-border bankruptcies within the EU Member States or in relation with third countries, regulates the small-scale bankruptcy, etc.
A debtor is in bankruptcy under the following conditions:
when insolvent (the cash flow test), i.e. the debtor has more than one creditor and is unable to meet its financial obligations for more than 30 days from the date of their maturity. This applies whether the entrepreneur is an individual person or a legal entity. when its due liabilities* exceed its assets (the balance sheet test), i.e. a debtor that is obliged to keep books under the Accounting Act, has more than one creditor and meets the balance sheet test.
An amendment to the Bankruptcy Act was proposed to the Slovak parliament early in 2010, changing the definition of the balance sheet test so that not only due liabilities, but all liabilities except for subordinated debt are taken into account when assessing the debtor’s financial conditions from the perspective of the balance sheet test. This amendment has been returned to the Slovak parliament by the president and is not yet in force, however, it is expected that it will be passed eventually.
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