On November 12, 2015, the Slovak parliament adopted an amendment to the Slovak Commercial Code introducing an entirely new type of legal vehicle – a simple joint-stock company (the “SJSC”). Modeled after a joint-stock company, the SJSC provides the much needed shareholder and investor flexibility by abandoning many rules currently perceived as restrictive in joint-stock or limited liability companies.

Starting entrepreneurs may appreciate the minimum registered capital requirement of EUR 1 and a simplified corporate structure that allows a one-man board of directors and does not mandate creation of supervisory bodies. A breakthrough element is the ability to issue different classes of shares (i.e., shares with specific rights) to different classes of shareholders (e.g., to employees, managers, investors, etc.) and it is expected that this share flexibility will greatly improve the implementation of employee stock option plans.

Finally, the adopted SJSC framework introduces explicit provisions concerning tag-along, drag-along and shootout (deadlock) clauses to be incorporated in shareholder agreements. The amendment also provides for increased transparency by establishing a public electronic register of shares and their transfers which are to be kept by central securities depositories. The amendment enters into force in 2017.