1. General preconditions for the performance of duties of an executive director
The role of a statutory body or a member of a statutory body of a limited company may be performed by a natural person who:
- has reached the minimum age of 18;
- has legal capacity;
- has a clean judicial record; and
- has not been excluded from the performance of duties of a statutory body member (Section 13a(1) of the Commercial Code - only in Slovak).
The general preconditions for the performance of duties of an executive director set out above will be examined by the Trade Licensing Office upon notification of a trade. Under Section 66(4) of the Commercial Code (only in Slovak) in connection with Section 6 of the Trading Act (only in Slovak), if a member of a statutory body no longer meets the preconditions for the performance of duties, the appointment ceases to exist.
Fulfilling the condition that a person has not been excluded from the performance of duties of a member of a statutory body (Section 13a(1) of the Commercial Code) is verified by checking the person against the register of disqualifications within the registration of a limited company by a registration court under Section 7(17) of Act No 530/2003 (only in Slovak) on the Commercial Register and amending certain acts.
2. Appointment and termination of appointment of an executive director
Appointment to the role of executive director of a limited company
A limited company may have one or more executive directors. Executive directors are appointed by the company’s general meeting (by the sole shareholder’s decision) from a group of persons – members or other natural persons (non-members of the company).
If a company appoints several executive directors, each of them is entitled to act on behalf of the company individually, unless the memorandum of association provides otherwise. The executive directors’ authority may only be restricted by the memorandum of association or the general meeting. Such a restriction is, however, ineffective vis-à-vis third parties. It is not registered in the Commercial Register either. The form of acting on behalf of the company, expressed orally and in general terms, is registered in the Commercial Register.
Termination of appointment to the post of executive director of a limited company
Performance of the post of executive director of a limited company is terminated upon:
- dismissal from the post by the decision of the general meeting (or the sole shareholder);
- resignation from the post under Section 66(2) of the Commercial Code (only in Slovak).
The performance of duties is on a voluntary basis. This means that it includes the possibility to resign from the post. Resignation from the post must be submitted in writing and accompanied by a signature authenticated by a notary or a notary’s employee. The notification of resignation from the post must be delivered to the limited company.
All changes concerning the appointment to the post of an executive director of a limited company are subject to registration in the Commercial Register.
3. Performance of duties with due care and in good faith
Executive directors of a limited company are required to perform their role with due care and in line with the interests of the company and all its members. In particular:
- they should collect and, in their decision-making, take into account any available information concerning such a decision;
- they should not disclose any confidential information and facts, the disclosure of which to third parties could cause damage to the company or jeopardise its interests or the interests of its members; and
- they should not, when performing their duties, prefer their own interests, interests of certain members only or interests of third parties over the interests of the company.
4. Liability of executive directors for damages caused while performing their duties
Breach of rules may (depending on the circumstances of the case) lead to liability for damages caused while performing duties of an executive director (Section 135a(2) of the Commercial Code). In some special cases, in addition to liability for damages, other claims may arise against the executive director of the company. For instance, members of the statutory body are jointly and severally liable for violation of legal duties (see Section 67f(2) and Section 67k(2) for more details).
5. Reasons for a release from liability for damages caused while performing duties of an executive director
Executive directors are no liable for damages if they submit evidence showing that they performed their duties with due care and acted in good faith believing it would be for the benefit of the company. Executive directors are not liable for damages caused to the company by the implementation of a resolution of the general meeting. This does not apply if the resolution of the general meeting is contrary to legislation, memorandum or articles of association or if the duty concerns filing a petition for bankruptcy. If there is a supervisory board, the executive directors are not released from their liability even if their conduct was approved by the supervisory board.
6. Agreements on exemption or restriction of liability of executive directors
Any agreements between the company and executive directors, which exclude or restrict the scope of liability of executive directors, are forbidden. The liability of executive directors is not restricted or excluded either by the memorandum or articles of association.
7. An indemnity clause, settlement agreement
A company may waive its claims for damages against executive directors or conclude a settlement agreement with them, but at the earliest 3 years after the occurrence thereof, and only if the waiver is approved by the general meeting and if no objection against such a resolution is raised at the general meeting and included in the minutes by any member(s), whose contributions constitute at least 10 % of the registered capital.
8. Liability claims of a company for damage caused while performing duties of an executive director
The company's claims for damages against executive directors may be made by creditors of the company in their own name and to their own account if it is not possible to satisfy the claim from the company’s assets.
Claims of creditors of the company towards executive directors do not cease to exist if the company waives its claims for damages or enters into a settlement agreement with them. If the company has been declared bankrupt, claims of the creditors against the executive directors are enforced by the trustee.