The amendment of the representation in elected body of legal persons

With the start of the new year an upcoming amendment of Business Corporations Act will come into effect.

This amendment contains many changes. One of the most important ones is a change to membership in elected bodies of legal persons. Current system allows juridical person to represent another juridical person in supervisory or statutory organs of corporate entities. This means, that juridical person could appoint natural person to represent them or appoint a member of its own statutory body, which can also be another juridical person. This allows for endless cycling of juridical persons, which leads to nontransparent ownership structure of juridical persons.

Upcoming amendment of corporate law enforces that any juridical person that is a member of elected body of capital companies or cooperative must appoint one natural person, who fulfills legislative requirements and is able to carry out appointed duties, to represent them without unnecessary delay. If juridical person will not authorise natural person in 3 months, function expires in elected body.