On 1 January 2021, an amendment to the Business Corporations Act took effect, bringing many obligations for business corporations which must adapt their Articles of Association to the new regulation and update their data in the Commercial Register.
In terms of deadlines, business corporations must in particular take the following steps:
- Business corporations whose statutory (or elected) body – usually an executive – is another company must authorise an individual to act on their behalf, and that person must be registered in the Commercial Register; this obligation must be fulfilled within three months from the effective date of the amendment to the Business Corporations Act, i.e. no later than the end of March 2021 – failure to do so will result in the termination of the function of the body, so the executive will then not be able to validly represent the business corporation.
- The information required by the amendment to the Business Corporations Act (such as the current registered office of the business corporation) must be entered in the Commercial Register within six months from the effective date of the amendment to the Business Corporations Act (i.e. no later than the end of June 2021) – in extreme cases, the business corporation may be dissolved and liquidated, if it fails to comply.
The Memorandum of Association must be generally updated within one year of the effective date of the amendment to the Business Corporations Act and included in the relevant Collection of Deeds – failure to do so may invalidate some provisions of the Articles of Association. However, some changes, such as profit distribution restrictions, will apply to business corporations from the effective date of the amendment to the Business Corporations Act (i.e. in the accounting period after 1 January 2021).