Due diligence on your partner in Slovakia Are you looking for a potential business partner in Slovakia? Do you want to perform a due diligence check on a Slovak corporate entity? Do you have doubts about trustworthiness and financial credibility of your (potential) partner in Slovakia?
You may come to situation that you would like to learn more about your business partner from the Slovak Republic. Let it be you considering a new project with a Slovak partner or you having concerns about the financial standing of your business partner when he is not performing to the agreed standards. All such situations may require to do a little research on your partner.
In this article we will provide you with useful hints for such quick due diligence or “sanity check”. In the Slovak Republic there are many sources of valuable publicly available data which are online and usually free of charge. It is therefore quite useful to check on the standing of your business partner before you enter in a contractual relationship with him or before you decide to start a debt collection against such partner. Usually such check can be done quite quickly.
Overall financial situation
Each corporate entity (vast majority of corporations in the Slovak Republic are established either as limited liability entities (spoločnosť s ručením obmedzeným) (in abbreviated form ltd.= “s.r.o.”) or joint stock companies (akciová spoločnosť), (in abbreviated form as “a.s.”) has its financial statements officially published online and can be viewed at the web page of the Ministry of Finance of the Slovak Republic: http://www.registeruz.sk/cruz-public/domain/accountingentity/simplesearch
Debts on health insurance and social security
Further source of valuable data are the lists of debtors to health insurance and social insurance. Social insurance (administered as state monopoly) as well as health insurance companies (public or private) publish online up-to-date lists of debtors on mandatory health and social insurance contributions. If your business partner appears on such a list, it means that it owes money to health and social system and that most likely he has not paid the contributions for its own employees. This may be an indication of a more serious problem and should raise an alert with you. From such lists you can learn also the principal amount being due. Up-to-date lists of debtors can be found under the following links: For social insurance (Sociálna poisťovňa): https://www.socpoist.sk/zoznam-dlznikov-emw/487s For Všeobecná zdravotná poisťovňa (public health insurance company): https://www.vszp.sk/platitelia/platenie-poistneho/zoznam-dlznikov.html For Dôvera and Union (both privately owned insurance companies): https://www.dovera.sk/overenia/dlznici/zoznam-dlznikov https://www.union.sk/zoznam-dlznikov
Bankruptcy, restructuring and liquidation
You can check whether your Slovak partner has not entered bankruptcy, restructuring or liquidation (winding-up) proceedings in the Official Bulletin of Commerce available here: https://www.justice.gov.sk/PortalApp/ObchodnyVestnik/Formular/FormulareZverejnene.aspx
You can gain a very valuable input by checking whether your Slovak business partner is party to a litigation at Slovak courts. District court in whose district your business partner has its registered office has a general jurisdiction to accept claims against such partner (please note that there are also other courts which have jurisdiction for specific matters – e.g. competition cases etc.). Although information whether there is any litigation conducted against your business partner is not available online, you can file a request with the respective court. Some courts will give you such information even over the phone.
There is an official land register, which provides all information regarding the ownership of real estate including any encumbrances over such real estates. It can provide you with information whether your partner in Slovakia owns real estate and whether such estate is clear of any encumbrances. It is available here: https://www.katasterportal.sk/kapor/ or under unofficial but reliable and very useful tool also here: https://zbgis.skgeodesy.sk/mkzbgis/
Register of Pledge Rights
Apart from specific registers, which register pledges over real estate (land register), trademarks or pledge over ownership interests (commercial register), the central notary register of pledges evidences all pledges and encumbrances over any other assets. https://www.notar.sk/%C3%9Avod/Not%C3%A1rskecentr%C3%A1lneregistre/Z%C3%A1lo%C5%BEn%C3%A9pr%C3%A1va.aspx
Register of ultimate beneficial owners
If your partner makes business with public authorities, it is obliged to enter its ultimate beneficial owners in the register. Together with the names you can see the whole structure of its corporate group. https://rpvs.gov.sk/rpvs/
Commercial register, register of deeds etc
For all corporate information you may search official commercial register. It is valuable particularly to establish who are the directors entitled to represent the company. http://www.orsr.sk/Default.asp?lan=en Most of the information is in Slovak language. Although the headlines of respective web databases may be in English, it would be good to have somebody with good command of Slovak language, who could guide you through this basic survey on your business partner.
Bratislava, 7 April 2020
Andrej Schwarz, partner
SCHWARZ advokáti s.r.o.