The main intention of the Law on Disqualified Individuals (the “Law”) is to merge in one place all available information on all limitations and prohibitions imposed by various state authorities, to natural persons or commercial entities and other subjects (registered as founder, member of management, supervisory body, director or other representative etc.) which were the subject of temporary measures issued by state authorities.

More specifically, with its provisions the Law imposes to all competent authorities and institutions (commercial, misdemeanor or other courts, Tax Administration, competent inspections, etc.) to deliver in electronic form to the Business Registers Agency (the “Agency”), every decision which contains a limitation of right, where such limitation, depending to the type of limitation, can consequently lead to inability of incorporation of new a commercial entity, performing of business activity, disposal of funds etc.

For that purpose, the Law foresees the creation of the Central Registry which will be kept by the Agency and will be publically available. In such manner, all data on individuals that acted contrary to regulations will be held in one place. The introduction of such Central Registry, should on one side unable individuals to act in bad faith without consequences and thus violate regulations, and should also on the other side enable better awareness of commercial entities and for example provide the possibility for evaluation on quality and good standing of potential business partner and to raise the level of legal certainty.

The text of the Law which was ultimately adopted in significant amount departs from the initial draft of the Ministry of Economy which contained many other restrictive resolutions that despite the fact that would be difficult to implement in practice (if at all), would definitely lead to hardened operations of commercial entities. Significant contribution in drafting of the Law was provided from the Foreign Investors Council, where we acted in capacity of president of the FIC legal committee. Consequently, we have managed to secure a compromise position by introducing novelties which should actually ease the doing business climate and not burden it further.

The Law has entered into force on 7 January 2016 while the implementation of the Law is postponed for 1 June 2016.