The Ministry of Justice of the Slovak Republic is currently evaluating the comments made on the draft Act on Conversions of Commercial Companies and Cooperatives and on Amendments and Additions to Certain Acts (hereinafter referred to as “the Act”). The Act was drafted in order to transpose Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 2019 amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions.
The aim of the draft is to develop a uniform and comprehensive legal regulation of mergers, divisions, changes in the legal form of companies and their cross-border alternatives, which would replace the currently applicable legal regulation contained in the Commercial Code.
The draft Act (among other things):
- introduces new terminology, namely the concepts of conversions and cross-border conversions, whereby the conversions are understood as mergers (fusions) and divisions of companies, and the cross-border conversion is understood as cross-border merger and cross-border division;
- introduces new institutes – spin-off (an institute corresponding to a partial division, where the company being divided does not cease to exist and its part is split off into another company), cross-border division, cross-border change of legal form;
- shortens the time limit for notification to the tax administrator (tax or customs office) by the dissolving company that a draft conversion project has been drawn up, namely from the current 60 days to 30 days before the date of the general meeting at which a decision on the approval of the draft conversion project is to be taken.
As the Act is proposed to become effective on 1 June 2023, we will closely monitor its further development and will provide more detailed information in future issues of our Newsletter.