Simple Joint Stock Company

The aim of new proposal changing and amending Commercial Code, which was submitted for interdepartmental consultation process, is to introduce a new legal form of undertaking by simplifying of setting up a capital company. According to this proposal, the new legal form shall be called simple joint stock company („jednoduchá akciová spoločnosť“) with abbreviation j. a. s. or jed. akc. spol., and shall constitute a hybrid form of joint stock company combining elements of joint stock company (a.s.), limited liability company (s.r.o.) and bringing its own legal institutions.

First simple joint stock companies may be formed after January 2017 and they could support the business development and solve problems attached to venture investment. Another one will added to the current four types of business companies, which aspires to become the ideal form especially for start-ups, innovative products and services.

Simple joint stock company will be characterized by the organizational simplicity – the bodies will be represented by General Assembly as the executive body, and Board of Directors as the statutory body; it will not have the obligation to create Supervisory Board.

Simple joint stock company may be established by one or more persons, while necessary paying the minimum share capital which should be at least 1 euro. The shares of simple joint stock company will be issued in dematerialized form only registered at the Central Security Depository of Slovak Republic. They can be ordinary or with special rights attached, e.g. the right to a larger share of the profit or the right to a higher number of votes, etc. For certain types of shares their transferability will be excluded, which means, in practice, they cannot be sold, but in this case the shareholder will have the right to require the repurchase from the company after 4 years of the issue price payment.

It can also motivate employees by having a share in the company, while the simple joint stock company will be eligible to subscribe shares only after the General Assembly approval and only if they are to be transferred to employees of the company.

In the simple joint stock company, it will be allowed to include in the By-Laws the possibility for shareholders to make decisions outside of general meeting, based on the draft decision which will be sent to all shareholders by the Board of Directors.

The shareholders of the simple joint stock company may enter into agreements among themselves regarding their rights and obligations – these agreements will not be public and they can constitute new types of rights, in particular:
- tag-along right entitling the shareholder (entitled) to transfer his shares together with the shares of another shareholder (bound) to a third party and also makes bound shareholder obliged to transfer shares of entitled shareholder to a third party under the same conditions;
- drag-along right entitling the shareholder (entitled) to request from another shareholder (bound) to transfer his shares simultaneously with the transfer of shares of entitled shareholder to third party, and makes bound shareholder obliged to transfer his shares together with the shares of entitled shareholder to the third party under the same conditions;
- right entitling the shareholder (entitled) to determine the price per share and ask another shareholder (bound) to transfer the share to him at a price thus determined, and if the bound shareholder fails to accept an offer, he becomes obliged to acquire shares from the entitled shareholder under the same conditions.

Simple joint stock company shall be winded-up also due to the other reasons than those expressly set out in the Commercial Code, provided they are included in the Articles of Association, Memorandum of association or By-Laws.

Please contact us if you are interested in finding out more about this issue. We would be pleased to offer you legal services in this area.

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