Chamber of Notaries: Notaries may refuse to certify the transfer of a company only under certain conditions

The Notarial Chamber of Slovenia has clarified that notaries must refuse to handle matters in cases where they suspect agreements are being made merely for appearances or to avoid legal obligations. According to the chamber, reasons and circumstances under which a notary cannot draft notarial documents are defined by the Notarial Act. This includes situations where the documents directly affect rights or obligations for the notary, their spouse, civil partner, close relatives, or where a legal representative is acting on behalf of a party. Additionally, notaries are prohibited from handling matters involving legally impermissible transactions or those suspected of being entered into solely to evade legal duties or harm third parties. According to the Notarial Chamber, notaries are not allowed to decline services related to the transfer of business shares due to the poor financial state of the company. However, according to current judicial practice, even transfers of business shares in companies undergoing insolvency proceedings are permitted. The chamber emphasized that before drafting a notarial record, the notary must conduct extensive checks mandated by the Companies Act. A shareholder cannot be someone who has been convicted of a criminal offense against the economy, employment relations and social security, traffic law, property, environment, space, and natural resources, human health, or general safety of people and property. Furthermore, a shareholder cannot be someone listed on publicly available lists of non-submitters of tax calculations, non-payers, or taxpayers whose identification for VAT purposes has ceased due to suspicion of misuse or upon determination by the tax authority that the taxpayer used their VAT identification to allow other taxpayers unauthorized deductions. Also, individuals with more than 25 percent participation in the capital of a joint-stock company and listed on these lists are barred from becoming shareholders. Individuals who have received fines from the Labour Inspectorate or Financial Administration within the past three years for violations related to wage payments or black labor, or those who were more than 50 percent owners of a limited liability company erased from the court registry without liquidation, are also ineligible. If a notary identifies restrictions regarding the acquisition of a shareholder status, they must refuse to compose the document, the chamber stated. It added that courts also perform checks on compliance with conditions for acquiring a business share before recording changes in the register. If a notary overlooked such restrictions and still composed a notarial record, the application for registration would technically not be possible due to built-in controls in the system. Specifics about the maneuver involving the transfer of the insolvent company Progros were not disclosed. The Notarial Chamber of Slovenia's president, Bojan Podgoršek, explained that while there are instances where notaries reject the composition of notarial records, the case of transferring the company between Boris Mijič and Rok Snežič does not fall into this category. He noted that the notary Mojca Tavčar Pasar had no reason to refuse the composition of the notarial record. Lawyer Miha Juhart highlighted the role of notaries in gift agreements, stating that the notary must verify whether the specific conditions set by law are met in each case. According to the Notarial Act, notaries are prohibited from handling matters that are legally impermissible or suspected of being entered into solely for appearances or to avoid legal obligations or harm third parties. However, the notary Tavčar Pasar did not find any grounds for suspicion of fictitious transactions, avoidance of obligations, or harm to third parties. According to current judicial practice, even the transfer of business shares in a company undergoing insolvency is permissible. Podgoršek emphasized that almost every day there is some such case, but the one currently discussed does not belong to these examples. He stated clearly during a press conference that the notary was not supposed to refuse the composition of the notarial record. He explained that the notary is not allowed to refuse notarial services for the transfer of business shares due to the poor financial condition of the company, and according to current judicial practice, even the transfer of business shares in a company in insolvency is permissible. Before composing a notarial record, the notary must perform thorough checks mandated by the Companies Act. Podgoršek explained that a shareholder cannot be someone who has been sentenced to imprisonment for a criminal act against the economy, employment relationship and social security, traffic law, property, environment, space, and natural resources, human health, or general safety of people and property. He also mentioned that the emergence of ownership is prevented for individuals who are directly or indirectly involved in more than 25 percent of the capital of a joint-stock company and are listed on these lists. A shareholder also cannot be someone who has received fines from the Labour Inspectorate or Financial Administration within the past three years for violations related to wage payments or black labor. Podgoršek stated that no country in Europe has such strict limitations. He reminded that the limitations apply to the acquirer of the business share, not the seller. If a notary identifies restrictions regarding the acquisition of a shareholder status, they must refuse to compose the document. However, documents are always reviewed by the court when registering changes in the court registry.