Register of public sector partners

On 1 February 2017. Law no. 315/2016 on the Register of Public Sector Partners entered effect.

Who does the law affect? Who is a public sector partner?
Persons who receive funds from the state budget, the budget of a state dedicated fund, the budget of a public body, the budget of a municipality, the budget of a regional government or the European structural and investment funds, legal persons established by statute, a legal entity which is completely or mostly funded by the state, a municipality, regional government or a legal entity established by law, which is controlled by the state, a municipality, regional government or a legal entity established by statute or in which the state, a municipality, regional government or a legal entity established by statute appoints or elects more than half the members of its management or supervisory body, from health insurance or receives state aid or investment aid or receives performance, the subject of which is the property, rights to property or other proprietary rights of the state, a public institution, municipality, regional government, legal entity established by statute or by a legal entity which is wholly or mostly funded by the state, a municipality, regional government or a legal entity established by statute, which is controlled by the state, a municipality, regional government or a legal entity established by law or where state, municipality, higher territorial unit or a legal entity established by law appoints or elects more than half the members of its management or supervisory body or from health insurance, and other persons referred to in the Law (e.g. subcontractors of entities listed above), amounting to more than 100 000 euros or in aggregate 250 000 euros per calendar year in the case of repetitive performance.

What are the obligations of a public sector partner?
The basic responsibilities of the public sector partner (PSP) is the requirement to be registered in the RPSP, for the duration of a legal relationship from which the PSP draws public resources. Failure to do this means prevention of access to public funds.

The proposal for registration may be submitted by the PSP only through an authorized person.

Who is an authorized person?
The authorized person is a body established by law, which carries out activities for the PSP in the registration proceedings and is jointly responsible for the correctness of entries in the register and their regular updating. A public sector partner may have always only one authorized person registered in the register.

Only an authorized person is actively authorized to communicate with the registering authority. The authorized person acts for the public sector partner. The authorized person may be a lawyer, notary, bank, foreign bank branch, auditor or tax advisor with a place of business or registered office in the Slovak Republic and who under a written agreement have undertaken to perform the duties of an authorized person for the public sector partner.

As is the relationship between the PSP and the authorized person governed?
Between the PSP and the authorized person there must be a contractual relationship established by a written agreement in which the authorized person undertakes to fulfil the obligations of an authorized person for the PSP.

Who is the end-user of benefits?
The person stated in Law no. 297/2008 on the Protection against Legalization of Proceeds of Crime and on Terrorist Financing and on the amendment of certain laws, as amended. The end user of benefits means any natural person who actually runs or controls a legal entity, individual – sole trader or association of property, and any natural person for whose benefit these entities perform activities or trade.

Identification of the end user of benefits and verification of the identification of the end user of benefits is performed using a verification documents drawn up by an authorized person. The verification document is publicly available in the register – the publication of a verification document is not a breach of commercial confidentiality or banking secrecy.

What sanctions does the law allow to be applied?
Depending on the nature of the breach, sanctions obligations under the Act primarily affect the PSP, its statutory authorities, the authorized person and the end user of benefits.

Providing false information about the end user of benefits results in the imposition of fines:
a) a public sector partner is fined the amount of economic benefit that partner public sector has gained; if economic benefits can not be determined, the registering authority shall impose a fine of 10 000 euros to 1 million euros,
b) a person who is the statutory body or each member of the statutory body of the public sector partner at the time of breach of duty can be fined 10 000 to 100 000 euros – the authorized person guarantees this payment.

Furthermore, a decision on imposing fines is also a decision to exclude under § 13a of the Commercial Code, i.e. the statutory representative of the legal person is, for three years, automatically deleted from all the companies and at the same time during those three years cannot be registered as a statutory body in the Commercial Register.

Providing false data on the end user of benefits is also the basis for the entitlement of the state to withdraw from the contract and under certain circumstances there may also be criminal liability.

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.


Cross-border secondment of workers

On 18 June 2016, the Act No. 351/2015 Coll. on cross-border cooperation in secondment of workers to perform work in service delivery will come into effect.

In order to differentiate between secondment and foreign business trip a distinctive feature is the fact that the secondment means a cross-border provision of services by the employer through its employees to the benefit of a service receiver. In the case of the foreign business trip no cross-border provision of services is provided, i.e. the employee performs work for its employer, but generally not in favor of third parties (e.g. employee attends a business meeting, training, i.e. its activities do not compete with workers in the territory of another country).

What are the obligations arising from the new law for an employer?
1. Secondment of an employee is subject to his consent, resp. secondment agreement, which must include: the start date and the end date of secondment, the type of work during the secondment, the place of work during the secondment and salary conditions during the secondment.
2. The employer is obliged to guarantee the working and employment conditions under foreign law of the country of secondment and to inform the employee about them (on working time and annual leave even in writing).
3. The sending employer must fulfill reporting obligations towards the labor inspection authorities in the country of secondment, according to the according national legislation of such country.
4. It is necessary to ensure the Form PD A1 in Slovak Social Insurance Office (if time of secondment does not exceed 24 months).

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.


Internet sockpuppetry

Recently, our clients often encounter the phenomenon of so called “false debaters” on their websites. What is it about? Such a debater is a person who creates a fake account or blog (under the pseudonym or anynomously) on the website in order to publish posts, the content of which is to promote a product, service or business name, trademark and so on. The aim is to create public interest in a given product or service, in particular to improve the position in search engines, or stimulate the interest of the consumer on the product or service. Sometimes there are more of them acting coordinated and planned, supplying answers to their own questions, giving you advice, sharing their “own” proven experience, and so on.

In legal terms, it is clearly an unfair commercial practice which is prohibited under Section 7 in connection with Section 4 (2) letter c) of Act No. 250/2007 Coll. on Consumer Protection. This prohibition was implemented into Slovak law by the Directive of the European Parliament and Council No. 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market.

How shall the website provider proceed in such a case? Pursuant to Section 6 (4) of the E-commerce Act No. 22/2004 Coll., the provider is not responsible for debaters´ posts if unaware of their unlawful content or unlawful debater´s conduct and the provider is not obliged to monitor or search for potentially illegal posts.

Once the website provider becomes aware of the illegality of posts, its obligation is to remove them from the website or at least prevent access to them. Therefore, it is not only entitled, but also required to block such false debaters´ posts or delete them. However it can be problematic to prove their illegality, especially the fact that it is a false paid debater´s profile. In such case, if the provider cannot prove the illegality with certainty, as proven in practice has shown the method of labeling of such posts as “suspicious”.

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.


Important change for owners of Community Trademarks (EU) applied before 22 June 2012

With effect from 23 March 2016, the European Parliament and the Council passed the Regulation no. 2015/2424 (“the Regulation”) which introduces important changes in the existing rules and functioning of the Community Trademark with an impact particularly on proprietors of trademarks applied before 22 June 2012 and new applications filed after 23 March 2016 as well.

So what’s the matter? According to the current version of the so-called Nice Classification there are 45 classes of goods and services for the trademark classification, while the extent of each class is generally defined in the heading of each class. In addition, however, each class contains a list of specific goods or services from which the applicant may choose those for which he intends to register the trademark. It often happened that applicants did not state each particular goods and services in the trademark application, mainly due to time reasons (they did not want to search through a long list of hundreds of items) and indicated only the general definition contained in the class heading.

However, given that the literal meaning of the terms specified in the general heading of the class may not meet the individual goods and services which are included in this class, according to the new Regulation the applicant (if stating only general definition of the class heading in the trademark application) has to expressly state whether he claims protection for the whole class or only for goods and services included in the general definition of the class heading.

Owners of trademarks applied before 22 June 2012 may declare that their intention on the date of filing had been to seek protection in respect of goods and services beyond those covered by the literal meaning of that heading no later than on 24 September 2016.

In essence, this means that from the end of the transitional period, all trade marks containing class headings will be interpreted according to their literal meaning regardless of their filing date.

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.


Update of e-shop terms and conditions from February 2016

On February 1, 2016, Act no. 391/2015 Coll. on Consumer Alternative Dispute Resolution introducing new reporting obligation to the e-shop provider came into effect.

By amending the Act no. 102/2014 Coll. the list of information that must be provided to the consumer by the e-shop provider prior to the conclusion of the contract is extended.

The e-shop provider is required to inform consumers about the possibility and conditions for resolving the dispute through alternative dispute resolution and publish on its website a link to the platform of ADR, through which consumers can lodge for a alternative dispute resolution. Such a platform posted on website https://webgate.ec.europa.eu/odr/main/index.cfm?event=main.home.show&lng=SK was also created by the European Commission.

The e-shop provider shall make this information available to the consumer prior to the conclusion of the contract, therefore we recommend to include it to terms and conditions so that it will be available to customers before placing their order or registering into a paid service and so on.

The penalty for violation of this rule is 200 to 10 000 euros, the maximum penalty fines in case of repeated violation within 12 months will be doubled.

Retail stores have the same duty since 1 February 2016 too.

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.


Changes relating to LLC from 1 January 2016

On April 29, 2015, Law no. 87/2015 was published in the Collection of Laws of the Slovak Republic. We bring you an overview of the most important changes relating to limited liability companies (s.r.o. companies) with effect from 1 January 2016:

- it can be determined by the court decision for the natural person to no longer be a member of Supervisory board or member of Statutory board in company. If the expelled person act on behalf of the company, he becomes liable for the debts of the company.
- there is an omission of obligation to define the object value of the contract by which the company obtains its assets from its founders or partners and their relatives, with the expert report, and the omission of the obligation of General meeting approval to the draft of such contract if it´s made within 2 years from the establishment of company, which was the condition of validity or the operation of contract.
Read more…


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.
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Changes relating to LLC from 1 July 2015

On April 29, 2015, Law no. 87/2015 was published in the Collection of Laws of the Slovak Republic. We bring you an overview of the most important changes relating to limited liability companies (s.r.o. companies) with effect from 1 July 2015:

The obligation of returning the performance value provided by contract which did not enter into force in accordance with § 59a is introduced. This value shall be given back to the company with reference to the unjust enrichment principles and guarantee for the returning this value back to the company lies on the members of Statutory board active in time of providing this value and active in time when the company did not set up a claim to return the performance value, and they were aware or should have been aware of this obligation. This guarantee is related to the contracts concluded after 01.07.2015.
Unforgivable obligation of returning the deposit returned to the shareholders back to the company is introduced. The Statutory board is obliged to enforce this obligation.

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.


Changes relating to LLC from 29 April 2015

On April 29, 2015, Law no. 87/2015 was published in the Collection of Laws of the Slovak Republic. We bring you an overview of the most important changes relating to limited liability companies (s.r.o. companies):
Read more…


Amendment to the Personal Data Protection Act

On April 15, 2014 an amendment to the Act on the Protection of Personal Data comes into force. We bring you a summary of the most important changes:
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