Updated 04. 2010
The conditions for winding up a company's activities are set down in Articles 68-75 of the Commercial Code.
The conditions for winding up and suspending a trade are set down in Articles 57-59 of the Act on Licensed Trades (Trade Licensing Act).
Types of dissolution
Different types of company dissolution:
- with legal successors,
- without legal successors,
- involuntary - through a ruling of a Bankruptcy Court or General Court.
Under the Commercial Code, a company can wind itself up voluntarily:
- through liquidation - the partners voluntarily decide to liquidate the company, which continues to have legal personality, although, for reasons of the impending dissolution, it may only perform actions connected with the liquidation.
- suspension of a company through the expiry of a time period or the achievement of an objective
- suspension of a company with a legal successor - through the suspension of the company a legal successor is created, taking on all of the rights and obligations.
When an existing business winds up its operations, it has to liquidate and distribute its assets to the owners or shareholders. Liquidation is not required if the company has no assets.
Liquidation is carried out by the company's statutory body or a liquidator. If a company is wound up by court order, a liquidator is nominated by the court, and information about the liquidation is recorded in the Commercial Register.
The liquidator will inform all known creditors that the company is in liquidation, and he must publish this in the Trade Journal (Obchodný vestník).
If any assets remain following liquidation - surplus assets - these will be distributed between the partners as per the Memorandum of Association (spoločenská zmluva).
The final act of the liquidator is to request the company's removal from the Companies Register.
When filing for bankruptcy is the only option left for a business owner, it pays to cut losses, initiate proceedings sooner rather than later, and move on to a new business project.
The role of a one-stop shop is fulfilled by Trade Licensing Offices, which provide the following services:
registration of the taxpayer with the tax authority and notification of the setting up of a workplace,
registration in the mandatory health insurance system. At Trade Licensing Offices, natural persons may also register a change to the payer of insurance for a self-employed person.
A company is dissolved on the day it is removed from the Commercial Register.
The final act in the winding up of a company by liquidation is the submission of a proposal for the company to be removed from the Commercial Register. The liquidator submits the proposal for the company to be removed from the Commercial Register within 90 days of approval of the final accounts, the final report on the liquidation and the proposal for distribution of surplus assets.
The proposal for removal shall include as attachments the final accounts and final report together with the proposal for distribution of surplus assets. The final accounts and the final report, together with the proposal for distribution of surplus assets, are lodged in the Collection of Deeds.
Where a registered entity is being wound up with liquidation, the proposal for removal from the Commercial Register shall include the following attachments:
- final accounts
- liquidation report together with proposal for distribution of surplus assets,
- other documents - proof of fulfilment of duty to publish - publication of the fact that the company has gone into liquidation with an invitation to creditor companies and other entities and bodies affected thereby to register their claims or other rights within a time period not shorter than 3 months.
The completion of liquidation is proven through submission of a document demonstrating the completion of liquidation - a decision of the AGM approving the final accounts, the final report on the liquidation and the proposal for distributing surplus assets.
Social security deregistration
A business owner must inform the health and social insurance agencies of any changes which may affect premiums, including any winding up of a business, within eight days. As from the date on which a trading licence is cancelled, social welfare insurance premiums no longer need to be paid.
The deregistration from the Register of Employers must be communicated to the Social Insurance Agency on the printed form:
The business owner shall also notify the Health Insurance Agency of the change.
The tax office (daňový úrad) and also the tax administrator (správca dane) must be informed of the winding up of a trade. The tax registration certificate (osvedčenie o registrácii pre daň) must be returned within 30 days.
Notification of winding up a trade is recorded in the Trade Register (živnostenský register) and cannot be revoked. Notification of winding up a notifiable trade (ohlasovacia živnosť) must be sent to the Trade Licensing Office.
An application must be made to wind up a concession trade. Applications for winding up are sent to the Trade Licensing Office - an administrative fee is payable. The Office will issue a decision notice to cancel a trading licence (živnostenské oprávnenie) within 30 days at the latest.