In just a few days, the six-month period will run out for adapting agreements with executive directors of limited liability companies on their position under Act no. 90/2012 Coll., on business companies and cooperatives, as amended (the “BBC”). This period is set out in Sec. 777 (3) of BBC, a transitional provision in line with Sec. 59 (3) of the BBC. Failure to respect this deadline means that the contract (if not adjusted) is understand to be performed free of charge as a matter of law.. This penalty applies not just to contracts with executive directors but also those with other members of corporate bodies.
To avoid this situation, changes must be made to agreements on performing these positions so that they comply with the BBC, especially its Sec. 60. This section sets out the essential items to be included in the clause on remuneration for the position. These are details of (i) all forms of remuneration that are, or could be, due to the member of the relevant body including any kind of consideration, contributions to pension funds and other provisions; (ii) the amount of remuneration or the method for calculating it and its form; (iii) the rules for paying special bonuses and dividends if these may be awarded to a member of the body; and (iv) benefits and remuneration based on a transfer of securities or the facilitation of their acquisition by a corporate body member or their associates if remuneration will be provided in this way.
The agreement on performing the position must be concluded in writing; electronic formats are also regarded here as written form. The electronic format must be approved by the company's highest bodies, i.e. the general meeting in the case of a limited liability company. We therefore recommend that executive directors make the required changes before the end of June so that their agreements are not held to lack consideration.