Corporate & Commercial

Q&A
Public procurements
Our company has entered into a contract with the municipality to supply roofing for the purpose of renovating one of the municipal facilities. Due to the epidemic, supply is delayed on our part as the roofing manufacturer in Italy shut down its production. Can we be concerned about the payment of the contractual penalty for the delay as set out in the contract?

In contracts for the supply of goods or provision of services or execution of works concluded between private-law entities and public-law entities that are users of the state public budget (state, municipalities, public agencies, funds, etc.) provisions on contractual penalties for delays do not apply during the duration of the epidemic and all contractually agreed deadlines are extended for the duration of the epidemic.

This does not apply where the procurement relates to the supply of goods constituting the protective equipment necessary to fight the epidemic.

Does the local community need to engage the municipality to perform a public procurement for the supply of goods or services?

If the contracting authority is a constituent part of a municipality (local, village or district community), the public procurement contract may be concluded independently, since the new intervention act stipulates that the provision regulating public procurement procedures for the needs of the constituent parts of the municipality does not apply until April 15, 2021. Also, the constituent part of the municipality is considered as an independent contracting authority for the purpose of calculating the estimated value of public contracts until April 15, 2021.

A company involved in the supply of goods and services has received an order from a procurement contractor with a value of 38.000 EUR (VAT excluded). Are the provisions of the Public Procurement Act (ZJN-3) applicable to the conclusion of the contract and the potential supply in view of the value of the contract?

In the present case, the provisions of the Public Procurement Act do not apply, since the intervention act has intervened on the field of public procurements of goods and services and stipulated that until November 15, 2020, the Public Procurement Act in the general field would apply only to public procurement contracts, the assessed value of which excluding VAT is equal to or higher than 40.000 EUR for the public supply or service contract or project contest and 80.000 EUR for the public works contract (the general rule in Article 21 of the Public Procurement Law sets these thresholds at 20.000 EUR and 40.000 EUR respectively).

Enforcement procedures
Prior to the adoption of the extraordinary measures act, our company received an enforcement order from the tax authority. We did not object to the order and the order became enforceable on April 14, 2020. When can we expect enforcement of the enforcement order?

In tax enforcement procedures that are governed by the Tax Procedure Act (ZDavP-2), the enforcement of enforcement orders is postponed from the day the extraordinary measures act enters into force. The tax authority will execute the order after the end of the validity of the intervention measures act, i.e. on 31 May 2020 or on 30 June, 2020, in case of extension.

Prior to the adoption of the extraordinary measures act, our company received an enforcement order from another company as a creditor. We did not file an objection against the order and the order became enforceable on February 15, 2020, which is why our transaction account was blocked. Does the epidemic affect the enforcement procedure?

In enforcement proceedings under the Claim Enforcement and Security Act, the enforcement of such orders is postponed from the day the extraordinary measures act enters into force. The enforcement will thus be halted by the bank and will continue after the end of the validity of the intervention measures act, i.e. on 31 May 2020 or on 30 June, 2020, in case of extension.

Before the intervention measures were put into force, I received an enforcement order. Because of the epidemic, I applied for extraordinary assistance in the form of monthly basic income. Will the enforcement order also apply to the extraordinary assistance income?

All income paid under the new intervention act (basic income, wage compensation for temporary waiting for work, etc.) is exempt from enforcement under the Claim Enforcement and Security Act and also from tax enforcement.

Insolvency proceedings
I have declared personal bankruptcy before the intervention measures were adopted. Because of the epidemic, I applied for extraordinary assistance in the form of monthly basic income. Will the income from extraordinary assistance be included in the bankruptcy estate?

All income paid on the basis of the intervention act are exempt from the bankruptcy estate in the procedure of personal bankruptcy.

A creditor has filed a proposal to start a bankruptcy procedure. The debtor has proposed to delay the decision on the initiation of the bankruptcy procedure. For how long can the decision regarding the creditor’s proposal be delayed if the insolvency of the company is the result of the declaration of an epidemic?

The court may postpone ruling on the creditor’s proposal for the start of the bankruptcy procedure for 4 months.

The measure is used in bankruptcy proceedings proposed by the creditor, which are filed by the creditor no later than two months after the termination of the measures, i.e. until 31 July 2020 or until 31 August, 2020, in case of extension.

The insolvency of a company is deemed to be the result of the declaration of an epidemic if the company carries out an activity for which it has been declared with a governmental, ministerial or municipal regulation or act that the carrying out of the activity (services or sale of goods) is temporarily prohibited or substantially restricted due to the epidemic.

In accordance with the report on financial restructuring measures, an increase of the share capital of the company with new cash contributions must be made within the company, therefore the management must publish a call for subscription and payment for shares on the basis of an increase of the share capital with contributions in three business days. Does the new act regulate this obligation differently?

If the company bodies are due to the objective consequences of the declaration of an epidemic unable to publish a call for subscription and payment for shares in a timely manner, they must do so at the latest within one month after the termination of the measures, i.e. until 31 May 2020 or until 30 June, 2020, in case of extension.

In accordance with the report on financial restructuring measures, an increase of the share capital of the company with new cash contributions must be made within the company, which must be decided upon by the general meeting of shareholders. Following the applicable legislation before the adoption of the Intervention Measures Act a general meeting deciding on the increase of share capital had to be convened at least 15 days before the date of the general meeting. What can we do?

If the company bodies are due to the objective consequences of the declaration of an epidemic unable to convene a general meeting in a timely manner, they must convene it at the latest within one month after the termination of the measures, i.e. until 30 June 2020 or until 31 July, 2020, in case of extension.

Does the new Intervention Measures Act amend the presumptions of insolvency of a company, sole proprietor or private individual in the applicable law?

The new Intervention Measures Act sets for the that a legal person, sole proprietor or private person has become permanently illiquid also in the case that the payment of wages and social contributions to employees has been delayed by more than one month since the reimbursements of wages and social contributions under the intervention acts have been received.

The presumption of insolvency is applicable for four months after the termination of the measures, i.e. until 30 September, 2020 or until 31 October, 2020, in case of extension.

Our company has become insolvent. As the company’s manager, I believe that the insolvency is temporary because it was caused by the consequences of the epidemic and that we will remedy it after the epidemic is cancelled. Am I obliged to file a proposal to start a compulsory settlement or a proposal to start the bankruptcy procedure of the company?

If the insolvency occurred as a result of the declaration of an epidemic, you are not obliged to file a proposal to start a compulsory settlement or a proposal to start the bankruptcy procedure of the company. The aforementioned is applicable for three months after the cessation of measures under the intervention act. 

The insolvency of a company is deemed to be the result of the declaration of an epidemic if the company carries out an activity for which it has been declared with a governmental, ministerial or municipal regulation or act that the carrying out of the activity (services or sale of goods) is temporarily prohibited or substantially restricted due to the epidemic.

State gurantee for credit obligations
On March 20, my company entered into a loan agreement with a bank to finance the manufacturing process. Does my company employing less than 10 workers qualify as a borrower able to obtain a guarantee of the Republic of Slovenia for a credit obligation?

Any legal or natural person pursuing an activity (including sole proprietors and private persons engaged in performing business activities) and classified as a micro, small, medium or large company with its registered office in the Republic of Slovenia is considered as a eligible borrower.

The guarantee of the Republic of Slovenia can be obtained for credit agreements concluded after March 12, 2020 and no later than December 31, 2020 with a loan maturity not exceeding five years and intended solely to finance the borrower’s primary business activity, either financing new ones or completing already performed investments (investments), financing of working capital or financing the repayment of obligations arising from credit agreements concluded in the period from March 12, 2020 until the law enters into force if they meet the conditions under the ZDLGPE law. The loan should not be intended for financing affiliated companies or companies domiciled abroad.

Does the guarantee obtained mean that we will not have to repay the loan?

No. A guarantee obtained allows you to obtain credit on more favorable terms or to obtain a loan that you would not otherwise be able to obtain.

Are there any additional conditions for obtaining a state guarantee?

The law sets certain limits, namely that the maximum allowed total amount of the principal amount of a loan of an individual borrower responsible for the fulfilment of which the Republic of Slovenia is responsible can be up to 10% of sales revenue in 2019 and may not exceed the amount of labor costs for 2019.

In the event that the borrower is granted a deferred payment of obligations for newly concluded credit agreements in accordance with the law governing the emergency measure of deferred payment of borrowers (ZIUOPOK), the amount of his deferred payments shall be included in the maximum allowed total amount of obligations of an individual borrower.

As of January 31, 2020, my company has negative equity. Do we still qualify for a state guarantee for a company credit obligation?

The Republic of Slovenia accepts the guarantee only if the borrower was not considered as a firm in difficulty on 31 December 2019 and that after 31 December 2019 the borrower is faced with liquidity problems for business reasons related to the consequences of COVID-19 in the Republic of Slovenia. Likewise, a borrower must not be considered a defaulter on March 12, 2020, and a borrower must not have significant delays in settling its obligations to the bank as of March 12, 2020. 

The lender must also not do business or be registered in a European Union country with jurisdictions that are not willing to participate for tax purposes (eg Cayman Islands, Fiji, Panama) and must not have an owner from such country and as of the date of submission of the settlement of the overdue payments arising from compulsory contributions, taxes and other charges and included in the system of compulsory multilateral offsetting.

In the above case, despite the negative capital, an entity may apply for a guarantee for its credit obligation if it also fulfils the other legal requirements.

What does the company have to submit together with the application?

In applying for credit, the borrower must provide the bank with the most recent financial statements and a description of its business position due to the consequences of COVID-19, together with an indication of the total proceeds of the borrower’s sales in 2019 and the amount of labor costs for 2019. The Borrower must determine the amount, maturity and purpose of the credit required. The lender must also provide a statement that the loan will be used to fund the core business. 

In the event that the borrower also has a loan that is subject to a deferral under the law governing the emergency measure of deferring the payment of the borrower’s obligations, the borrower must also provide information on the amount of the borrower’s obligations under this loan.

Does the state guarantee obligation apply to the full amount of the principal amount of the loan?

No. The amount of the guarantee for an individual loan is 70% of the loan principal given to a company classified as large, or 80% of the loan principal given to a company classified as micro, small or medium-sized enterprises. 

In the case of the gradual repayment of the borrower’s obligations, for which the Republic of Slovenia has assumed a guarantee obligation, the liability of the RS as a guarantor shall also be reduced proportionally.

Is obtaining a state guarantee free of charge?

No. An annual premium is calculated on the basis of the guarantee obtained. 1 basis point equals 0.0001 the amount of the principal outstanding at the relevant time.

If the borrower is classified as micro, small and medium-sized enterprises, the annual premium for the first year is 25 basis points; 50 basis points for the second and third years and 100 basis points for the fourth and fifth years.

If the borrower qualifies as a large company, the annual premium for the first year is 50 basis points; 100 basis points for the second and third year; 200 basis points for the fourth and fifth years.

Does the borrower have any restrictions on the payment of profits during the state guarantee?

For a borrower who has been granted a loan by a bank that receives measures under the ZDLPE law, the following prohibitions apply from the time the loan application is submitted to the expiration of the bank’s right to exercise the right to a guarantee:

– prohibition of payment of profits,

– prohibition of payment of business performance awards to members of management,

– the prohibition on the purchase of own shares or shares, and

– prohibition of payment of other financial liabilities to parent or affiliated companies or owners.

Cookies and privacy settings

The website uses cookies to provide online services and improve user experience. By selecting the "I agree" option, you agree to the use of cookies. You can change your decision at any time. Read more