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Consent of the tax office for the transfer of ownership interest in a limited liability company, respectively obligation to submit a declaration of honourLEGAL VIEW
16 Dec 2013 Business
Act No. 246/2012 Coll. (amendment i.a. to the Commercial Code) introduced the obligation to obtain the consent of the tax office to the transfer of majority ownership interest. A majority ownership interest is one which, taking into consideration the ratio of a particular shareholder's contribution to the company's registered capital, confers at least half of all votes to the shareholder or an ownership interest, with the ownership of which, the memorandum of the association of the company associates with at least half of all votes. It is the company that has the duty to submit such consent of the tax office and it must request that consent for both the transferor and the transferee of the ownership interest.
On the other hand, the obligation to obtain the consent of the tax office does not apply to a foreign person, regardless of whether he is the transferor or the transferee of the ownership interest. The same rule was introduced with respect to the incorporation of a limited liability company. A foreign person, instead of the tax office's consent, had the obligation to accompany the application form for registration of the company to the commercial register, respectively, for a change to the already entered data in the commercial register, with a declaration of honour of the shareholder and the transferee of the ownership interest that it is not obliged to submit such consent.
The changes introduced by said law can be viewed as making the setting up of companies and transfers of ownership interests more complicated. The aim of the law was to prevent tax leaks, but the reality has shown that these measures have not proven to be very practical and are an unnecessary bureaucratic burden on conducting a business. The lawmakers have probably realised this and have come, in a very short period, with a new amendment to the Commercial Code, which amends certain aforementioned rules.
Act No. 357/2013 Coll. has amended Section 105b of the Commercial Code, which prohibits the foundation of a limited liability company by a person who has arrears on taxes or a customs duty; however such a prohibition no longer applies to foreign persons. According to the reasoning report, the new amendment should exclude any interpretation of uncertainties in relation to the obligation to submit consent of the tax office or a declaration of honour together with the application form for registration of a limited liability company, in cases in which the applicant is a foreign person.
Unfortunately, the same amendment has not been introduced with respect to the transfer of majority ownership interests, so the obligation to submit a declaration of honour on non-obligation to submit consent of the tax office remains unaffected. The amendment to the Commercial Code is effective as of 1 December 2013.
Mgr. Ján Dobák is attorney at law for the law firm Biksadský & Partners, s.r.o., and he specialises in commercial corporate and contractual relations, real estate issues and civil litigation.
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