From 17 August 2026, the prohibition on company chains will be removed from the Commercial Code. Since 2002, this prohibition has restricted the ownership structure of limited liability companies. The original purpose of this regulation was to prevent improper chains of single-member companies. However, in practice, this restriction proved ineffective and easy to circumvent.
For entrepreneurs operating through multiple companies or creating holding structures with a single shareholder in Slovakia, its abolition represents a significant advantage and simplification of establishment.
▢ What did the ban on company chains restrict?
The ban on company chains was regulated in paragraph 105a of Act No. 513/1991 Coll., the Slovak Commercial Code, and applied exclusively to limited liability companies. It consisted of two restrictions:
- a single-member limited liability company could not be the sole founder or sole shareholder of another limited liability company.
- a natural person could be the sole shareholder in a maximum of three limited liability companies.
In practice, these rules mainly complicated holding structures where a parent company with a single shareholder intended to conduct business activities through separate subsidiary companies in Slovakia.
The consequences of violating the prohibition were significant. Compliance with the ban on company chains was a legal condition for the existence of the company. Failure to comply could constitute grounds for a court to decide, even without a petition, to dissolve the company and order its liquidation. This risk will cease to exist after 17 August 2026.
▢ Why is the regulation being abolished?
The ban on company chains was easy to circumvent in practice. It was sufficient to include another person in the ownership structure, either at the level of the shareholders of the parent company or through a connected person in subsidiary companies, and the restriction no longer applied.
The explanatory memorandum to the new Act on the Commercial Register also acknowledges that both restrictions proved ineffective. Any single-member company only needed another person to jointly establish an unlimited number of additional companies.
Therefore, the regulation did not fulfil its protective purpose and only created additional costs, more complicated transactions, and longer corporate restructuring processes for entrepreneurs.
▢ Practical impact of the change
The ban on company chains is removed by Act No. 29/2026 Coll. on the Commercial Register, which also amends the Commercial Code and removes § 105a entirely. From 17 August 2026, a single natural person may own any number of single-member limited liability companies, and a single-member company may become the sole shareholder of another company without the need to modify the ownership structure.
The simplification will have the greatest impact on:
- establishing companies;
- the purchase and sale of business share; and
- changes in ownership structures.
Until now, entrepreneurs who wanted to remain the sole owner of an entire group had to include an additional shareholder with a minimal share in the structure. Despite having a formal role, such a shareholder had voting rights and a legal entitlement to a share of profits. This required additional contractual arrangements, especially agreements on the exercise of voting rights and option agreements for the future transfer of the share back.
After the change, these structures will no longer be necessary, and the holding structure can be organised directly, with a single owner at the top of the group.
The change is also important in relation to company transfers. Structures involving formal minority shareholders often raised questions during buyer due diligence and frequently resulted in requests to simplify the structure or adjust the purchase price. The abolition of the ban on company chains allows such structures to be simplified before a transaction and enables companies to be sold with a transparent ownership structure.
Entrepreneurs affected by this change should consider the following steps:
- the ban on company chains remains applicable until 16 August 2026. Any breach of the rules may still result in the risk of company dissolution. Therefore, it is advisable to wait until the new legislation becomes effective.
- From 17 August 2026, existing holding structures may be reviewed. Where a minority shareholder was included only to avoid the restrictions under § 105a of the Commercial Code, their share may be acquired and the structure simplified. When establishing a new group after this date, a single-member structure can be created directly. At the same time, it should be considered that the same Act introduces, from the same date, a mandatory form of incorporation documents, either in the form of a notarial deed or a document authorised by an attorney. Every such structure will therefore be subject to this new requirement.
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