The consequence is more than a fine. If beneficial owner verification is missing, the public-sector counterparty is not in default when it withholds performance for that reason, so it may lawfully withhold payment of your invoice. False or incomplete data can bring a company fine equal to the economic benefit obtained, or otherwise EUR 10,000–1,000,000, and EUR 10,000–100,000 for the statutory representative. The two-year re-registration ban arises in the sanction cases governed by Section 13a, not after every voluntary deletion.
What comes first: a fine or withheld payment?
The usual assumption is that neglecting the register leads to a fine. In practice, something faster and more unpleasant often comes first: payments stop.
Section 15(2) of the Act on the Register of Public Sector Partners provides that, if verification under Section 11(2) has not been completed, the public-sector party is not in default if it withholds contractual performance for that reason. In other words, the invoice remains unpaid without a breach by that party. There is nothing to enforce or demand until verification is completed. The same applies where the partner is late in securing a new authorised person.
Ongoing compliance therefore makes sense even for a company whose circumstances have not changed for years. Its cost is on an entirely different scale from losing access to a month’s revenue under a public contract.
Can the other party withdraw from the contract?
If a public sector partner is deleted from the register, whether by court decision or at the authorised person’s request during the contract, the other party gains a right to withdraw (Section 15(1)). The same right arises if the partner is more than 30 days late in securing a new authorised person. The outcome may therefore be an ended contract, rather than merely a suspended payment.
What fines can the company and directors face?
If the registration application gives false or incomplete information about beneficial owners or public officials, or an application to register a change is not filed within the statutory period, Section 13(1) requires the registering authority to impose:
- on the public sector partner, a fine equal to the economic benefit obtained or, if that cannot be established, EUR 10,000 to EUR 1,000,000;
- on the statutory representative or members of the statutory body at the time of the breach, EUR 10,000 to EUR 100,000, with the members jointly and severally liable for payment.
The sanction therefore reaches the managing director or board member personally as well as the company. In setting the amount, the authority particularly considers the breach’s nature, seriousness, manner and consequences.
A substantiated complaint and deletion
The registering authority may examine the truth and completeness of registered data on its own initiative, and must do so following a qualified complaint. Anyone, including an unsuccessful public procurement competitor, may submit one by describing facts giving rise to reasonable doubt (Section 12(1) and (2)).
If the partner fails to credibly prove that the data are true and complete, the court will generally order its deletion and, once the decision becomes final, open fine proceedings (Section 12(7)). The Act nevertheless provides an exception where the breach is of negligible seriousness, assessed by reference to its manner, consequences, circumstances and degree of fault. The burden is on the company, rather than the state. No remedies are available against the deletion decision. Nor can the company avoid the outcome by arranging its own deletion in the meantime; proceedings continue to completion (Section 12(8)).
Two years out and director disqualification
Two often-overlooked consequences are the most serious in the long term.
Re-registration is prohibited for two years following deletion under Section 12(7) or Section 13(2); this also applies to the related case of a decision under Section 12(8) (Section 13a). An ordinary voluntary deletion does not automatically trigger the ban. For a business substantially dependent on public contracts, that ends the business model for two years.
Under Section 14 of the RPVS Act, a disqualification decision under Section 13a of the Commercial Code is a deletion decision under Section 12(7), a decision under Section 12(8), or a fine decision on the grounds specified in Section 13(2). It is not a consequence of every deletion. The disqualified persons are the statutory representative or members of the statutory body of the deleted company. The consequence therefore reaches beyond that company to the individuals concerned.
What is the lawyer’s responsibility as authorised person?
The public sector partner and the authorised person are responsible for accurate registered information, identification and verification (Section 11(1)). The authorised person entered in the register at the time of the breach also guarantees payment of the director’s fine, escaping only by proving professional care (Section 13(5)).
This matters to clients: an authorised person who treats verification as a formality risks their own money. Ask how they investigate ownership, rather than only what they charge. We handle registration and ongoing compliance through RPVS registration and authorised-person services.
This answer provides general information on the law as at 10 September 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
