If you are a director (konate\u013e) of a Slovak s.r.o. \u2014 whether in your own company or in someone else’s \u2014 you have probably never sat down and properly thought through what that actually means. How many directors know they cannot contractually limit their liability? That they can be personally liable for the company’s debts two years after leaving the role? That withdrawing cash from the company’s ATM can be a criminal offence?<\/p>\n
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The most common misconception we encounter: an entrepreneur believes that the assets of their s.r.o. are their<\/em> assets. They are not. A director exercises the administration of someone else’s property<\/strong> \u2014 property that belongs to the company, its shareholders, and ultimately to its creditors as well. The fundamental principle follows from this: every decision must prioritise the interests of the company. The director’s own interests come last. This is not a philosophy \u2014 it is a statutory obligation.<\/p>\n <\/p>\n The law requires a director to carry out their function with professional due care<\/strong>. What does that mean in practice?<\/p>\n Before every significant decision, a director must:<\/p>\n Importantly: liability is not absolute.<\/strong> A director is not liable for the outcome of their decisions \u2014 they are liable for whether those decisions were made with professional due care. Business risk is a reality, and the law accepts this.\u00a0 Key point: The burden of proof lies with the director.<\/strong> If the company suffers a loss and a creditor comes knocking, the law presumes that the director did not<\/em> act with professional due care. It is the director who must prove otherwise.<\/p>\n <\/p>\n We regularly encounter requests from directors who want their service agreement to cap their maximum liability \u2014 for example at \u20ac4,000 per month. Such arrangements are void.<\/strong> A director’s liability cannot be contractually limited, nor can it be waived in advance. Any agreement between the company and a director purporting to limit liability has no legal effect.<\/strong><\/p>\n <\/p>\n Statutory bodies are collective bodies<\/strong>, and directors are jointly and severally liable for any damage caused. It is not sufficient to say: “I didn’t know about that \u2014 the other director did it.”<\/p>\n The duty of professional care includes active engagement with what is happening in the company<\/strong>. A director must regularly check the company’s bank accounts, monitor its financial situation, and stay informed to a degree that allows them to identify any misconduct by a co-director in time. If they fail to do so and the company suffers a loss as a result of another director’s actions, they may be held liable \u2014 even if they personally did not carry out the offending acts.<\/p>\n A real-world example: accountant systematically enriched himself for several years, diverting payments on his own account. When the fraud was discovered, the director who had never checked the bank statements was held liable for the resulting loss \u2014 even though they had not made a single unauthorised payment themselves.<\/p>\n <\/p>\n Have you resigned as director? That does not mean everything is over. Several things most people are unaware of:<\/p>\n The role does not end immediately upon delivery of a resignation.<\/strong> If a director merely delivers a written resignation (rather than resigning at a general meeting), the role only ends at the next general meeting at which the resignation is addressed \u2014 or at the latest after three months. During this period the director remains fully obliged to carry out their duties.<\/p>\n A departing director must inform.<\/strong> The Commercial Code imposes an obligation on outgoing directors to alert the remaining directors or shareholders to any facts that could cause harm to the company. A real case: a director resigned during court proceedings and failed to notify anyone of an imminent deadline to appeal in a tax dispute. The company missed the deadline. The director faced potential legal action for failing to fulfil this obligation.<\/p>\n The duty to cooperate continues after departure.<\/strong> The Commercial Code requires former directors to provide, to a reasonable extent, cooperation to tax administrators, bailiffs, and courts even after their role has ended. Closing the door and resigning is therefore not the definitive end of responsibility.<\/p>\n <\/p>\n The standard answer people know: a director is not personally liable for the company’s obligations. That is true \u2014 but only under certain conditions.<\/p>\n There are specific situations in which creditors can reach the director’s personal assets:<\/p>\n <\/p>\n This criminal offence applies to situations where a director acts to the detriment of the company \u2014 for example by selling assets below market value, even when they themselves are the sole shareholder. Many assume that a single-member s.r.o. with no creditors is a “safe zone.” It is not. In specific circumstances the police can be assertive and investigate the basis on which such a transfer took place.<\/p>\n A director has the authority to dispose of the company’s financial resources \u2014 but only in the company’s interest. If they withdraw those resources for private use (ATM withdrawals on the company card, personal purchases), they commit the criminal offence of embezzlement.<\/p>\n If a director brings about the company’s insolvency through their actions and thereby prevents creditors from being satisfied to a significant degree (the threshold is \u20ac20,000), this constitutes a standalone criminal offence. This is a powerful incentive for directors to act responsibly \u2014 particularly when the company starts experiencing financial difficulties.<\/p>\n <\/p>\n Not every unfavourable contract creates director liability. If before signing a contract the director:<\/p>\n …then they will not be liable for any loss that arises from that contract. Business risk is legitimate.<\/p>\n Beware of instructions from a shareholder or general meeting.<\/strong> If a director receives an instruction to sign a contract from a shareholder or the general meeting, they have a defence \u2014 but only if the instruction is not contrary to law<\/em>. If the instruction is unlawful, the director should not follow it, and will be liable for any resulting damage if they do. Blind compliance with instructions is not a defence.<\/p>\n <\/p>\n Slovak practice is that directors and shareholders regularly borrow money from their own companies. This is understandable \u2014 Slovak law does not permit interim dividend payments during the year, and the legal route to the money only opens after the annual accounts are approved.<\/p>\n A loan from the company is not automatically illegal \u2014 but it must meet the following conditions:<\/p>\n If the receivable from a shareholder accumulates year after year without settlement, a creditor (including the state) may claim against this asset of the company. The director is responsible for actively pursuing recovery of the receivable \u2014 if they fail to do so, they may be held liable for the resulting loss.<\/p>\n <\/p>\n When clouds begin to gather over a company, this is not merely a business problem \u2014 it is the moment at which a director’s obligations and exposure increase dramatically.<\/p>\n Company in crisis:<\/strong> If the ratio of equity to liabilities falls below 8:100, the company is in what Slovak law terms a “crisis.” Special rules apply \u2014 directors may not, for example, repay shareholder loans, as doing so would make them personally liable to external creditors for the repaid amounts.<\/p>\n Threatened insolvency:<\/strong> If there are objective indicators that the company will be unable to meet its obligations within the next 12 months, directors are required to act. They must inform shareholders, communicate with creditors, and seek expert advice.<\/p>\n Obligation to file for bankruptcy:<\/strong> If the company has at least two creditors and has been unable to meet its obligations for more than 90 days, it is in a state of insolvency. Directors are required to file for bankruptcy without undue delay \u2014 at the latest within 30 days of the date on which they became or should have become aware of the insolvency.<\/p>\n Late filing of a bankruptcy petition carries serious consequences:<\/p>\n <\/p>\n A so-called “white horse” (biely k\u00f4\u0148) \u2014 a person who lends their identity as a nominal director or shareholder \u2014 is defined in Slovak criminal law precisely as a person who lends their identity<\/em>. The Criminal Code addresses this through the offence of unfair liquidation.<\/p>\n Transferring a company to a nominee director does not release the original director from liability<\/strong> for the past. Furthermore:<\/p>\n <\/p>\n If a director properly selected a professional adviser (based on references and demonstrated expertise in the relevant area) and that adviser makes a mistake, the director is not directly liable for that error. However, the director is still required to:<\/p>\n <\/p>\n Slovak practice creates the impression that director liability is theoretical. Courts are slow, enforcement is difficult, companies get transferred and life goes on. That impression is partly true \u2014 but only partly. For directors, one practical message follows from all of this: document your decisions.<\/strong> Obtain assessments from relevant experts. Monitor the company’s financial situation regularly. When problems arise, act promptly and take professional advice.<\/p>\n And for creditors who have not been paid: do not stop at the company. The personal liability of the individuals behind it is real \u2014 and in many cases it is legally enforceable.<\/p>\n","protected":false},"excerpt":{"rendered":" If you are a director (konate\u013e) of a Slovak s.r.o. \u2014 whether in your own company or in someone else’s \u2014 you have probably never sat down and properly thought through what that actually means. How many directors know they cannot contractually limit their liability? That they can be personally liable for the company’s debts…<\/p>\n","protected":false},"author":4,"featured_media":4839,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[55],"tags":[],"_links":{"self":[{"href":"https:\/\/www.setupmart.com\/en\/wp-json\/wp\/v2\/posts\/4837"}],"collection":[{"href":"https:\/\/www.setupmart.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.setupmart.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.setupmart.com\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.setupmart.com\/en\/wp-json\/wp\/v2\/comments?post=4837"}],"version-history":[{"count":6,"href":"https:\/\/www.setupmart.com\/en\/wp-json\/wp\/v2\/posts\/4837\/revisions"}],"predecessor-version":[{"id":4847,"href":"https:\/\/www.setupmart.com\/en\/wp-json\/wp\/v2\/posts\/4837\/revisions\/4847"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.setupmart.com\/en\/wp-json\/wp\/v2\/media\/4839"}],"wp:attachment":[{"href":"https:\/\/www.setupmart.com\/en\/wp-json\/wp\/v2\/media?parent=4837"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.setupmart.com\/en\/wp-json\/wp\/v2\/categories?post=4837"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.setupmart.com\/en\/wp-json\/wp\/v2\/tags?post=4837"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Duty of Care: What the Law Requires<\/strong><\/h3>\n
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Director’s Liability Cannot Be Limited by Contract<\/strong><\/h3>\n
You Are Also Liable for the Other Director<\/strong><\/h3>\n
Liability After Leaving the Role<\/h2>\n
Personal Liability for Company Debts: When Yes and When No<\/h2>\n
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Criminal Liability: Three Provisions You Need to Know<\/strong><\/h3>\n
1. Causing Damage in the Administration of Another’s Property<\/strong><\/h4>\n
2. Embezzlement (Sprenevera)<\/strong><\/h4>\n
3. Insolvency of a Legal Entity<\/strong><\/h4>\n
Liability for Contracts: An Unfavourable Contract \u2260 Automatic Liability<\/strong><\/h3>\n
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Borrowing Money from the Company: When Is It (Il)legal?<\/strong><\/h3>\n
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When Insolvency Threatens: The Director’s Heightened Obligations<\/strong><\/h3>\n
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Transferring company to Directors (“Biely K\u00f4\u0148”): Popular but Risky<\/strong><\/h3>\n
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Liability for an External Accountant or Lawyer<\/strong><\/h3>\n
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Conclusion: The Law Exists \u2014 and It Works<\/strong><\/h3>\n