The possibility of the reintroduction of tax licenses motivates some entrepreneurs to look for ways to get rid of an inactive company. UPDATE: The Act introducing tax licenses was approved by the National Council on 19th od December 2023. It introduces tax licenses from 01st of January 2024.
Therefore, we will look at the various ways to get rid of an inactive company in the following article. These are the following options:
- Transfer of business share
- Merger, consolidation, or company fusion
- Ex officio company dissolution
- Liquidation of the Company
- Filing for bankruptcy
Need help with the dissolution of your company? Book a consultation with us to assess the most effective approach in your case.
We will provide a comprehensive consultation to discuss various options available for dissolving your inactive company. This will include an assessment of legal requirements, potential implications, and the most suitable approach based on your specific circumstances.
Transfer of business share
A relatively simple way to get rid of a company is to transfer the business share to another person. The basic legal regulation of the transfer of the business share is governed by the Commercial Code.
We will prepare the documents for the transfer of the business share from EUR 170. The price is always individually negotiated.
The business share represents the rights and obligations of a shareholder and their corresponding participation in the company. The fundamental condition for the transfer of the business share is the existence of a suitable acquirer. If there is an interested party in acquiring the business share, we recommend starting by studying the company's articles of association.
In general, a shareholder, with the consent of the general meeting, may transfer his business share to another shareholder if the articles of association do not specify otherwise. A shareholder may also transfer his business share to a person other than a company shareholder if the articles of association allow it. The articles of association may stipulate that the transfer of the business share to another person requires the consent of the general meeting.
If the memorandum of association does not permit the intended transfer, a resolution to amend the memorandum of association is required.
The Commercial Code also regulates situations where a shareholder cannot transfer the business share. This includes situations where legal proceedings for the company's dissolution are pending, the company is dissolved by a court or based on a court decision, or the company is subject to the effects of a bankruptcy declaration or approval of restructuring. A shareholder cannot transfer his business share to another shareholder or person even if execution proceedings are conducted against him. A person against whom execution is conducted cannot be the acquirer of the business share.
The transfer of the business share can be for consideration or without consideration and is carried out based on a written agreement on the transfer of the business share, with the signatures of the contracting parties duly certified.
After the transfer of the business share is completed, the company continues to exist, but the new shareholder continues to fulfill the obligations associated with its existence.
Merger, Consolidation, or Company Fusion
You can terminate the activities of a company by changing it so that the original company ceases to exist, but instead, a legal successor continues its operations. In this case, you need another company willing to take over your company through a merger, consolidation, or fusion, and you no longer have to continue as a shareholder in the successor company.
In relation to such transformations of companies, a new legal regulation will come into effect on 1st of March 2024.
According to the new legal regulation laid down in Act No. 309/2023 Coll. on changes in commercial companies and cooperatives and on amending and supplementing certain laws:
- Merger is a procedure in which, based on the cancellation of the company without liquidation, one or more companies cease to exist, and the business assets of the disappearing companies pass to another existing company, which becomes the legal successor of the disappearing companies.
- Consolidation is a procedure in which, based on the cancellation of the company without liquidation, one or more companies cease to exist, and the assets of the disappearing companies pass to another newly established company, which becomes the legal successor of the disappearing companies.
- Cross-border merger is a merger where at least one participating company or the successor company is a Slovak company, and at least one participating company or the successor company is a foreign company.
Dissolution of the Company by Court – Ex Officio Dissolution of the Company
Dissolution of the company by the court means its termination without a legal successor. The reasons when the court can dissolve the company are specified in the Section 68b of the Commercial Code.
We will prepare a proposal for the dissolution of your company starting from EUR 170. The price is always individually negotiated.
The court can, even without a proposal, decide on the dissolution of the company if:
- The conditions prescribed by law for the establishment of the company no longer exist,
- The company's bodies are not appointed in accordance with the articles of association, founding agreement, founding deed, statutes, or this Act for more than three months,
- The company does not meet the condition of having a registered office and be able to prove that it has the right to own or use the immovable property registered as the company's registered office,
- The company violates the obligation to create or supplement a reserve fund according to the Commercial Code
- The company is in default with the obligation to deposit the regular individual financial statements and extraordinary individual financial statements into the Collection of documents for more than six months, and the deadline for depositing them into the collection of documents has expired for more than nine months, or
- Other reasons specified in the Commercial Code or a special law occur.
These reasons for the dissolution of the company by the court are presumed if they result from the commercial register or documents deposited in the collection of documents.
If there is any of the above reasons for the court's dissolution of the company, you can submit a motion to the court to initiate dissolution proceedings.
Liquidation of the Company
Liquidation is a process regulated by the Commercial Code, commencing with the decision to dissolve the company and its entry into liquidation. It aims to conclude the company's activities, satisfy the claims of creditors and individuals entitled to the liquidation residue. The process concludes with the removal of the company from the commercial register.
This is a relatively complex procedure, which we describe in more detail in our article.
Proposal for Company Bankruptcy
If your company is insolvent – unable to meet its payment obligations – a suitable solution may be to file a proposal for bankruptcy. In some cases, legal obligations may require you to submit such a proposal.
According to the Bankruptcy and Restructuring Act, a debtor who is a legal entity is obligated to file a proposal for bankruptcy within 30 days from the date he become aware of, or could have learned about, his insolvency while exercising due professional care. This obligation falls on behalf of the debtor, whether it be the statutory body or a member of the statutory body, the liquidator, or the legal representative of the debtor.
Failure to submit a proposal for bankruptcy, when required by law, may result in associated sanctions.
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