Establishment of a register of excluded persons and related simplification of the company formation process

Untangling the web of requirements for entrepreneurs when setting up a company can often be challenging. However, with increasing levels of digitalisation, this process is steadily becoming easier and the burden is gradually becoming more manageable.

In view of the necessity to transpose the Digitalisation Directive into our legal system, the legislator has come up with another simplification in the process of company formation. Until the beginning of this year, the legislation stipulated the obligation to prove the integrity of members of elected bodies by an extract from the criminal record when registering them in the Commercial Register. With effect from 15 January 2023, this obligation has been abolished and now it is possible to prove their eligibility by means of an affidavit (we commented on further simplification of company formation in our newsletter from last April).

A related step was the adoption of a government bill - an amendment to the Business Corporations Act, which resulted in the establishment of a register of excluded persons and the establishment of conditions for being a member of an elected body directly in the text of the Business Corporations Act with effect from 1 July 2023 (until now, the conditions were set out in the Trade Licensing Act).

The Register of Excluded Persons maintained by the Ministry of Justice is another public administration tool to ensure the protection of public order, to improve the recording of information in public registers and, thanks to its interconnection with other public registers, to streamline the checking of persons appointed as members of elected bodies.

Thanks to the interconnection of the register with other public registers, it will be sufficient for the Commercial Court (or notary) to check whether a person meets the conditions for registration before registering them as a member of an elected body and, if there is no obstacle, to carry out the registration. At the same time, anyone will be able to request the information held about them via an electronic form, even though the register is being set up as a non-public register.

According to the explanatory memorandum to this amendment, its adoption will contribute to the overall cultivation and positive development of the business environment, as more emphasis will be placed on the reliability and responsibility of persons who are or are to become members of the elected body of companies. In the future, the BRIS (Business Registers Interconnection System) should be interconnected with the business registers of the other EU Member States and founders or existing companies will not be obliged to submit the same data or documents repeatedly; it will be sufficient if they are provided to one authority in one EU Member State.

We recommend that you pay close attention to the adopted amendment regarding the registration of excluded persons, because if an office-holder is prevented from exercising the functions of a member of an elected body of a company, their office will cease by law as of 1 October 2023.

If you are unsure about any of the steps involved in setting up your own company, please do not hesitate to contact us.