Imagine this:
You own 100% of a company and have a long-term employee with whom your cooperation has worked so well that you have decided to transfer a 49% business interest to them.
This is a minority interest because it does not meet the conditions under Section 115(8) of the Commercial Code to qualify as a majority interest.
What are the interest rates?
▪️check whether the memorandum of association permits the division of the business interest and its transfer to a third party
▪️adopt a decision of the sole shareholder in the exercise of the powers of the general meeting (SS): (i) grant consent to the division of the business interest subject to its subsequent transfer to a third party (your employee), and (ii) approve the transfer
▪️ideally, also resolve in the SS decision all necessary amendments to the memorandum of association, which will take effect on the date the transfer of the business interest becomes effective
▪️draw up an agreement on the transfer of the business interest – note that the transfer becomes effective vis-à-vis the company upon delivery of the agreement to the company
▪️draw up a power of attorney for an attorney to file the application and submit an application for registration of the changes in the Commercial Register of the Slovak Republic
What should you not forget?
The declarations – stating that (i) the transferee is not listed as an obliged person in the register of issued authorisations for the enforcement of execution proceedings under a special law, (ii) the company is not required to supplement the application for registration of the change in the company’s shareholder with the consent of the tax administrator (both in respect of the transferee and the transferor), and (iii) there are no obstacles to the transfer under Section 115(3) of the Commercial Code.
Also remember that it is necessary to draw up declarations concerning the change of the ultimate beneficial owner and submit an application to register the change in this respect as well, since the 100% owner will now own 51% and the company will also have another shareholder.
If you also appoint the employee as a managing director, check the way in which they may act on behalf of your company and consider from which point in time the employee will also become a managing director.
Tip:
Are you married and have matrimonial property in joint ownership? For all steps, actions and measures you plan to take in connection with the division and transfer of the business interest, obtain the consent of your better half.
Do you need to transfer business interests? Write to us: skypalova@skylex.sk
