On 1 January 2021, an amendment to the Business Corporations Act came into effect, introducing a number of obligations for companies to adapt their legal documents (Articles of Association) to the new regulation and to update their information in the Commercial Register.
The obligations of companies are in particular as follows (with regard to time):
- Companies whose statutory body (or, as the case may be, elected body) – typically an executive – is another legal entity are obliged to authorise an individual to represent them, and such a person must be registered in the Commercial Register; this obligation must be met within three months from the effective date of the amendment to the Business Corporations Act , i.e. by the end of March 2021 – the sanction is the termination of the function of the body, so the executive would not be subsequently able to validly represent the company.
- The data required by the amendment to the Business Corporations Act (for example, the current registered office of the company) must be entered in the Commercial Register within six months from the effective date (i.e. by the end of June 2021) – in extreme cases, the sanction may be dissolution of the business corporation and ordering of its liquidation.
- The Articles of Association must be generally adapted within one year of the effective date of the amendment to the Business Corporations Act and submitted in the relevant Collection of Deeds – if this is not done, some provisions of the Articles of Association may become ineffective. However, some changes will affect companies on the very effective date of this amendment to the Business Corporations Act , such as restrictions on the payment of the share in profits, including its distribution or payout, which will already apply in the accounting period after 1 January 2021.