Changes in the Commercial Code Should Provide More Protection for Small and Medium Businesses
Since February 1st 2013 the Amendment to the Commercial Code Act. No. 9/2013 has become effective. Accace brings you an overview of the most important changes that will have impact on business activities:
Formalization of Documents in Limited Liability Company
The Amendment to the Commercial Code introduces the need to notarize the signature in following cases:
- Deciding on the increase/decrease of the share capital of the company or deciding on non-financial deposit into the share capital of the company,
- Deciding on the nomination, removal or remuneration of executives,
- Deciding on the dissolution of the company or change of company legal form, if the communal agreement agrees on it,
- Deciding on the approval of contracts for the sale of the company or contracts for the sale of the part of the company,
- Deciding on the nomination, removal or remuneration of the proxy.
In the mentioned cases, the law requires notarization of the signature of the chairman of the shareholders meeting on the minutes of the meeting. If it is so-called one-person limited liability company the signature of the sole shareholder must be verified.
Deadlines for Enforcement of Monetary Obligations
Directive of the European Parliament and of the Council 2011/7/EU on combating late payment in commercial transactions has been incorporated into our legal order. This provision lays down general rules for time of enforcement of monetary obligation by debtor for the supply of goods or services.
The amendment governs that the contractually agreed period to meet monetary obligation can not exceed 60 days:
- from the delivery of the invoice or other document or
- from the enforcement by its creditors, or
- from the day after the end of the examination by that the proper enforcement by its creditors has been identified (such examination should not be realized later than 30 days from the enforcement by its creditors).
Creditor and debtor can agree on longer maturity period than 60 days; however this agreement can not be in the gross disproportion in comparison with the rights and duties arising out of the contractual relations.
The amendment specifically adjusts time conditions for the enforcement of the monetary obligation, when the debtor is an entity of public law (state authority, municipalities). The entity of public law should meet its monetary obligation in a shorter period, and this within 30 days. The agreement between the contractual parties can extend the maturity period by a maximum of 60 days.
Delay of Debtor and Creditors’ Claims
As a result of the introduction of rules on the maximum period of maturity of monetary obligations some provisions were modified – regarding the definition when the debtor gets into delay. The creditor who has properly fulfilled his duties, has the right to require from the debtor in delay:
- Enforcement of the claim
- Interests on late payment
- Lump sum compensation for the costs related to enforcement of claim
- Compensation for damage caused by delay
Interests on Late Payment
The Commercial Code distinguishes between contractual and statutory interests on late payments. The creditor preferably requires contractual interests on late payments; he can exercise statutory interests on late payments only if he has not agreed with the debtor on contractual interests on late payments. The amount of contractual interests is not limited unless the debtor is a consumer. In this case the contractual interests can be agreed maximum up to the amount of the statutory interests as mentioned below. The amount of statutory interests depends on the ECB interest rate and the method of its calculation is amended in the new government regulation.
The creditor can apply:
- Fixed statutory interests on late payments – the interest will be calculated as: ECB base interest rate valid to the first day from delay + 9%, or
- Floating statutory interests on late payments – instead of fixed interest on late payment the creditor can apply ECB base interest rate valid to the first day of the calendar year during the whole calendar half-year delay + 8%. This method of interest calculation is applied within the entire period of delay.
These provisions will only be exercised by contractual relations arising after 31th January 2013.
Lump Sum Compensation of Costs Related to Enforcement of Claim
The above mentioned new government regulation determines the amount of the lump sum costs arising to the creditor by debt collection. This is in the amount of 40 EUR. The length of the debtor´s delay does not affect the amount of the one-off compensation.
New Institutes in Trade Relations
The Amendment to the Commercial Code has defined the unfair contractual terms and unfair commercial practice.
Unfair Contractual Terms
Unfair contractual term is defined as any provision that governs maturity of the monetary obligation, interest rates on late payments or lump sum compensation of costs related to enforcement of claim that is in the gross disproportion in comparison with the rights and duties arising out of the contractual relations without any relevant reason.
Unfair Commercial Practice
An unfair commercial practice means such commercial practice related to maturity of monetary obligation, interest rates on late payments or lump sum compensation of costs related to enforcement of claims established between parties, when this practice is in the gross disproportion in comparison with creditor´s rights and duties without any relevant reason. Unfair commercial practices are strictly prohibited.
While determining whether unfair contractual terms or unfair commercial practice occurred, it is necessary to consider all the circumstances of the case, in particular compliance with the principles of fair trade, the nature of the subject of claim, existence of some relevant reason for a different arrangement as provided by law.
If the court declares some contractual arrangement for unfair contractual terms or prohibits the using of some commercial practice, the contract party, as well as its eventual legal successor are obliged to refrain from their using in other contractual relations with its business partners.