Financial assistance means a company provides an advance, loan, credit or security to enable a third party to acquire its shares. Slovak joint-stock companies were prohibited from doing so for years, with narrow exceptions for ordinary banking operations and transactions connected with employee share acquisitions. Act No. 309/2023 Z. z. on transformations of companies and cooperatives reversed this regime from 1 March 2024: § 161e of the Commercial Code now permits financial assistance if the articles allow it and the statutory conditions are met.
What the new wording requires
The conditions are cumulative: assistance must be provided on fair market terms, including interest and security; the board must assess the recipient’s financial capacity; it must not reduce equity below the statutory threshold; and the company must create a special reserve fund equal to the assistance. The board submits a written report to the general meeting explaining reasons, terms and risks. If a board member or controlling person will receive assistance, the supervisory board also reviews the report. The general meeting approves the decision by a two-thirds majority of shareholders present, and both reports are filed in the collection of documents.
The employee exception remains, but has moved
Transactions connected with the acquisition of shares by or for employees of the company remain outside the stricter regime, provided equity does not fall below registered capital plus the mandatory reserve fund. The exception is now in § 161e(7). Older texts and templates cite it from when it formed part of the prohibition in a different paragraph. For a simple joint-stock company, the articles may also extend the exception to collaborators whose outputs are intellectual property (§ 220s(3)).
Practical implications
For ESOPs, a previously taboo route opens up: the company can help employees buy shares through a loan or security without laboriously structuring the programme around a prohibition. For company sales and purchases, financial assistance ceases to be an automatic obstacle to structures in which acquisition costs are repaid from the target’s resources; compliance and approval procedures replace the prohibition. Finally, documents drafted before 2024 deserve another read: a reference to the “prohibition of financial assistance under § 161e(1)” now points to text with a completely different meaning.
What to watch for
The new wording applies to joint-stock companies and correspondingly to simple joint-stock companies; financial assistance is not expressly regulated in this way for an s.r.o. Although permitted, it is not unrestricted. A missing reserve fund, an unassessed credit risk or weak reasoning in the board report makes a transaction vulnerable to challenge. We recommend structuring financial assistance, whether for an employee programme or a company sale or purchase, before the first document is signed.
This article provides general legal information as at 1 August 2026. It does not constitute legal services or advice on your specific matter. Laws change and the details of your situation may differ. Check the appropriate course of action or contact us before making a decision.
