However, many regulations of the Commercial Code are dispositive, which means that it is possible to agree in the articles of association on something other than what is stated in the Commercial Code. Therefore, in several places of the Commercial Code, it is possible to see the phrase “unless the articles of memorandum of association provide otherwise”.
Below we will summarize the regulations that apply to it, ie in which you can specify something different in the articles of association compared to the law. These provisions are not mandatory for the articles of memorandum of association. If they are not included in the articles of association, the Commercial Code will apply.
It is possible to regulate in the partnership agreement following atributes:
- Issuance of the company’s articles of association – they regulate in more detail the internal organization of the company and some other matters in comparison with the articles of association.
- The articles of association may specify the method of calculating the compensatory share of the partner whose participation in the company has ceased, but also the maturity of the compensatory share differently from the law.
- The articles of association may stipulate the effectiveness of the resignation of a member of the company’s body, resp. the effectiveness of the dismissal is different from the law.
- The articles of association may provide for a different number of votes required to approve the change of legal form of the company or a higher number of votes to approve the merger or amalgamation of the company.
- The partnership agreement may stipulate a period (maximum five years from the establishment of the company) within which the partner is obliged to repay the deposit. It is also possible to agree in the partnership agreement on other interest on arrears in the event that the partner has not paid the prescribed value of the cash deposit within the specified period.
- The articles of association may also regulate the conditions for the transfer of a shareholding. It may stipulate that the transfer of a shareholding from one shareholder to another does not require the approval of the general meeting. It may also stipulate that the shareholding may also be transferred to a third party (outside the company), otherwise such a transfer is not possible and at the same time may transfer the shareholding to a third party subject to the approval of the General Meeting. You can read more about the transfer of a business share in the article Sale of the s.r.o ..
- With regard to the transfer of business share, the articles of association may exclude the transfer of business share, e.g. to the companion’s heir. However, this is only the case if the company does not have only one partner. It may also preclude the transfer of a shareholding to a legal successor if the shareholder was a legal person.
- The business share can also be divided. The articles of association may also exclude the division of a shareholding.
- The articles of association may stipulate that the general meeting is entitled to impose on the partners the obligation to contribute to the compensation of the company’s losses by monetary benefits in excess of half the share capital according to the amount of their deposits.
- The partners are generally entitled to a share of the profits in proportion to their repaid deposits. The articles of association may specify a different profit-sharing ratio.
- It is also possible to agree on another method of determining the business share in the articles of association, which usually corresponds to the amount of the shareholder’s contribution..
- The appointment and removal of a procurator is usually decided by the general meeting. However, the articles of association may specify otherwise, e.g. that the managing director or the supervisory board may also appoint and remove the procurator. It can also be determined that the general meeting will also decide on matters that are otherwise decided by other bodies – e.g. that it will decide on the acceptance of the loan. If the articles of association did not contain such a provision, the managing director would be entitled to accept the loan.
- The articles of association may specify a different number of shareholders required for the general meeting to have a quorum (by default, an absolute majority is required). It may also determine a different number of votes required for a decision of the general meeting. It may also determine the other number of members present required for the quorum of the statutory body or supervisory board.
- By law, it is necessary to convene a general meeting at least once a year, convening on the basis of a written invitation. However, the Articles of Association may specify a shorter time limit for the General Meeting, but also a different time limit for announcing the date and agenda of the General Meeting and may also specify another method of convening the General Meeting, e.g. by e-mail.
- If the company has several managers, each of them can act independently. It is possible to agree on something else in the partnership agreement, e.g. that all managers can only act together, or e.g. in a company with three managers, at least two managers are authorized to act together.
- The partnership agreement may also limit the power of attorney.
- The decision on the business management of the company, which falls within the competence of the managers, requires the consent of the majority of managers. However, the articles of association may provide for a higher number of votes, e.g. consent of all managers.
- In the articles of association, it is possible to adjust other restrictions related to the prohibition of competition and also specify that the prohibition of competition applies not only to managers but also to partners.
- One of the bodies of s.r.o. there may also be a supervisory board. However, in order for it to work, it needs to be set up in a social contract. If nothing is regulated there, the supervisory board is not established.
- As a rule, the consent of all partners is required to change the partnership agreement. However, the articles of association may authorize the general meeting to amend the articles of association.
- In the event of an increase in the share capital, the company’s shareholders have a pre-emptive right to assume a deposit obligation. However, the articles of association may stipulate that they do not have such a right, or may change the scope of the pre-emptive right (eg that the pre-emptive right applies only to half of the new deposits and the remaining half will be made up of new shareholders’ deposits). The articles of association may also specify a different period within which the shareholders may exercise a pre-emptive right to assume the deposit obligation.
- Last but not least, in the articles of association it is also possible to regulate non-legal reasons that will result in the liquidation of the company, e.g. death of the partner or execution on a business share.
Example of limiting the transfer of a share in a partnership agreement:
Company A, s.r.o. has two partners. Company B, s.r.o. has 30% share and Ján has a 70% share. The articles of association prohibit the transfer of a business share to the legal successor of a legal entity. B, s.r.o. will cease to exist and its legal successor will become C, s.r.o .. If the articles of association contain nothing, a partner in A, s.r.o. with a 30% share would, after the dissolution of B, s.r.o. became the company C, s.r.o ..