What will change with the amendment to the law on the registration of beneficial owners?
According to the new definition of beneficial owner, a beneficial owner is anyone who has influence over or benefits from a legal person. The threshold of material benefit or influence is quantified as an ownership share of 25% or an equal share in voting rights, profit, liquidation balance or other resources, while for the purposes of determining the beneficial owner, it is sufficient to exceed it indirectly, e.g., ownership through another company.
The scope of legal entities for which the beneficial owner is disclosed is significantly expanded by the amendment. Political parties, churches, trade unions, hunting associations and associations of unit owners are no longer exempt from this obligation. Their beneficial owners will generally be members of the statutory body.
After the adoption of the amendment, commercial companies will have to assess who their beneficial owner is and possibly register the beneficial owner additionally. However, for the vast majority of companies, the details will be entered in the register automatically, especially if the beneficial owner is clear from the commercial register itself. The automatic registration should also apply to most organisations that have been exempted from the registration of beneficial owners.
Of course, if you have any doubts about the registration of the beneficial owner, please contact us.
When an employee causes harm to your customers
This question was recently asked by the Supreme Court. In the case at hand, the customer sought compensation for damages caused by an employee of the company that was supposed to repair his kitchen equipment. He sought to recover damages from the company and from the employee himself. The crucial question was therefore whether a third party (the employer's customer) to whom the employee had caused damage in the course of his work could claim damages against the employee.
There is no dispute that the customer can claim damages against the employer itself. The latter is liable for damage caused by its employee in the course of his work pursuant to Section 2914 of the Civil Code. However, the position of the employees themselves as the victims is not clear from that provision; unlike the previous legislation, the provision which expressly excluded the direct liability of employees has been deleted. The question of whether, following the adoption of the new Civil Code, damages can also be claimed directly against an employee has therefore not yet been addressed by the Court.
In the present case, the Supreme Court held that, although direct liability of the employee towards the injured party is not expressly excluded in the new Civil Code, it must still be regarded as excluded. In the performance of his work, the employee is acting at the will and for the benefit of his employer and, last but not least, under the employer's responsibility. Therefore, damage caused by an employee in the course of his work (subject to absolute excesses) can still be claimed by third parties only against the employer.
On the right of a minority shareholder to buy back his share
Section 89 of the Corporations Act applies to situations where the controlling person (e.g., majority shareholder, etc.) uses its influence to the detriment of the minority shareholder.
However, the exercise of the right of redemption is an extreme solution to the situation, which should be used rather exceptionally. In a recent judgment, the Supreme Court summarised the conditions under which, if all of them are met, the right of redemption may be exercised. Such a situation arises where the controlling person takes advantage of their influence and, as a result, the position of the shareholder is substantially worsened or their legitimate interests are substantially impaired and the shareholder cannot be required to remain a shareholder in the given situation.
In particular, the last condition leaves room for further interpretation. Since the right of redemption should be an institute for dealing with extreme situations, it is appropriate to think rather restrictively. As a rule, the mere rejection of a minority shareholder's proposal at a general meeting will not be a sufficient reason for exercising the right of redemption; on the other hand, a long-term failure to distribute profits for which there are no justifiable reasons and which continues even after the shareholder succeeds in a motion to invalidate the resolution of the general meeting will already be a sufficient reason for exercising the right of redemption.
If you are in a situation where a majority shareholder or a shareholder is acting to your detriment, our law firm is fully available to find a suitable solution.