A director must act within the powers imposed by legislation, the company’s Articles and by- laws (if any). The Articles govern how the company is to be run, including the powers and responsibilities of directors.
Duties – Skill and Care
When exercising directors’ powers, directors are required to exhibit such a degree of skill as may reasonably be expected from a person with their knowledge and experience, as well as exercise independent judgment.
Directors must also exercise a degree of diligence and care in their actions as a company director and act in good faith for the benefit of the company and its shareholders, especially to obtain and consider all available information related to the particular decision, maintain confidentiality and always prefer the interests of the company over their own interests, the interests of certain shareholders or third parties.
Duties – General
In general, the responsibility for the company lies with the managing directors. The director is obliged to execute his powers with due professional care and in accordance with the best interests of the company and all its shareholders.
The managing director also has a general duty of diligent management which includes, in particular, the following duties:
- to comply with and ensure the company’s compliance with all applicable statutory and legal obligations
- to ensure that the company keeps proper records and accounts
- to maintain a list of shareholders
- to inform the shareholders on the business situation of the company
- to submit annual financial statements to the general meeting for approval, proposals for profit or loss distribution and annual reports
- to file an application for the registration of changes into the Commercial Register, if such changes occur
- to file the prescribed corporate documents with the Collection of Deeds of the Commercial Register
- to use his best efforts to promote the purpose of the company
- to comply with and ensure the company’s compliance with all applicable statutory and other legal obligations and requirements
- to maintain the share capital and assets of the company
- to pay all taxes and contributions in due course and in accordance with legal requirements
- to call a general meeting as required by law or the Articles of Association
- not to make or accept improper payments;
- not to compete with the business opportunities of the company
- not to disclose trade or business secrets or any other confidential information belonging to the company
The managing directors also have to observe the instructions given by the shareholders via shareholders’ resolution.
Duties – Other
There are many specific duties for a managing director, some of the more onerous have been set out below;
- the managing directors are liable for the preparation of the annual financial statements (“ú?tovná závierka”) and their timely submission to the applicable Register
- the obligation to file for insolvency within thirty (30) days from the date he/she becomes aware (or should have become aware while acting with due care) that the company is overindebted or unable to pay its creditors
- the managing directors must ensure the timely preparation of the tax return (“da?ové priznanie”)
- the managing directors have obligations with respect to fiduciary duties. They must preserve the economic interest of the company. Hence, the managing directors are not allowed to undertake any actions which compete with the Furthermore, omissions of business, poor performance as well as the assumption of too higher risks can constitute a violation of this obligation
A number of legal provisions relate to the health and safety of workers, examples of which include the following:
- complying with environmental regulations for the produced or marketed products, the production process, the organisation of the work place and work facilities and compliance with pollution limits and general reporting duties
- ensuring statutory accident insurance remains in place, and that there is compliance with provisions for prevention of work place accidents
Please also note anti-bribery rules, as set out in the Criminal Code (“Trestný zákon”) prohibit the bribery (directly or through an intermediary) of: – any governmental official
- any person representing another party with whom the company is doing business with
in order to coerce the individual to act in a certain manner
Under the “Anti-bribery” legislation it is also prohibited to obtain, require or be promised a bribe, directly or through an intermediary, in order to breach duties arising from employment, office or position.
Latest version updated
10th April 2018