SLOVAKIA Law and Practice Contributed by: Lukáš Michálik, Peter Makýš and Šimon Hora, Ments s.r.o.
11. Duties of Directors 11.1 Principal Directors’ Duties
countries on which stock exchange in which country the shares are listed. 10.3 Producing Financial Statements In Slovakia, there is generally a legal obligation for every company to publish its official financial results every year on an official public website. In addition, for example in stock-for-stock transac- tions or for the purposes of determining the pur- chase price of a target company, interim finan- cial statements are also commonly prepared. Regarding accounting standards, financial state- ments are usually prepared according to Slovak norms, but it is common that, in addition to this, the financial statements of the company are also processed on the basis of GAAP or IFRS methodology (the latter being more common). The processing of financial results according to these international standards is used for internal purposes, for reporting purposes within business structures/groups, or for reporting purposes to financing banks and entities. 10.4 Disclosure of Transaction Documents In general, there is no obligation to disclose transaction documents. However, transaction documents must be sub- mitted in case of registration of certain changes (eg, for transfer of ownership interest in a limited liability company, the agreement on transfer of ownership interest is a mandatory attachment to the application for registration of the change) to the commercial register. It is also the case that if a state-owned company were to acquire a certain company, there would be an obligation to publish this contract in the Central Register of Contracts.
In the case of a business combination, the duties of the board of directors are not only to the shareholders, but also to all stakeholders. They also have duties towards, for example, employ- ees, trade unions, creditors, and so on. The duties can be divided into several catego- ries, as follows. • General duties – as in any matter related to the management of a company, the directors are obliged to act in an informed manner, with due professional care, and they have an obli- gation to refrain from competitive behaviour. • Formal duties – directors are obliged to pre- pare documents for the business combina- tion, prepare the business combination agree- ment, internal corporate documents, etc. They are also obliged to convene a general meeting to approve the business combina- tion. • Information obligations – the directors are obliged to inform employees about upcoming organisational changes. • Notification obligations – the directors are obliged to notify creditors, authorities and other entities of upcoming changes. • Registration obligations – the directors are obliged to register changes in the commercial register. Regarding the liability for damages, the direc- tors are jointly and severally liable for the dam- age they have caused to the shareholders of the company involved in the business combination. It is possible for the company itself, shareholders or creditors to claim damages from the directors (depending on the application of the relevant legal requirements).
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