Advance payment for liquidation and notarial escrow
Reason for introducing the advance payment
Until 30 September 2020, it was fairly common for a company to enter liquidation and for nothing further to happen. The liquidator lost interest in the matter or became unreachable, creditors had no one to whom they could address their claims, and the company remained in the Commercial Register for years without carrying on any activity. The advance payment for liquidation, introduced with effect from 1 October 2020, was intended to remedy this through a simple principle — whoever initiates liquidation must demonstrate in advance that funds are available to carry it out.
The advance payment is deposited in notarial escrow, and its amount is set by Decree No. 193/2020 Coll. of the Ministry of Justice of the Slovak Republic. It is intended exclusively to cover the liquidator’s remuneration and expenses, not to settle the company’s debts to its creditors.
Sequence of steps
The process begins with a decision by the competent body of the company to dissolve it with liquidation and appoint a liquidator. The company then deposits the advance payment for liquidation in notarial escrow; the notary draws up a record of receipt and issues a certificate of deposit. This certificate, or the record itself, is attached to the application to enter the company’s commencement of liquidation and the appointment of its first liquidator in the Commercial Register — without such a document, neither the registration court nor the registrar will register the liquidator in the Commercial Register.
The liquidator then converts the company’s assets into cash, satisfies its creditors and distributes any remaining liquidation proceeds among the shareholders. Once liquidation is complete, an application is filed to remove the company from the Commercial Register, and after the statutory period following its removal has elapsed, the notary releases the advance payment to the liquidator.
Release of the advance payment
The advance payment is neither a fee paid to the state nor a non-refundable expense. It is a source of funds used to pay the liquidator’s remuneration and expenses, and the notary releases it only after the statutory period following the company’s removal from the Commercial Register has elapsed, that is, when liquidation has actually been completed.
If the liquidator is a shareholder or former managing director, the advance payment ultimately returns to the control of the same people who deposited it. This is often overlooked when considering liquidation costs, which is why the advance payment is mistakenly perceived as money spent irretrievably.
Common misunderstandings
The most common mistake concerns the order of the steps. The advance payment must be deposited before the registration application is filed, not at the same time and certainly not afterwards. An application filed without a certificate of deposit cannot result in the liquidator’s registration.
Another recurring misunderstanding concerns the time required. Liquidation is not a quick process — creditors must be notified that the company has entered liquidation, the period for filing claims must expire, assets must be settled, accounts must be closed and tax obligations must be fulfilled. Even for a company with no assets and no liabilities, the process takes months.
A third misconception is that liquidation frees the company from its debts. This is incorrect. If the company is overindebted or insolvent, liquidation is not the appropriate procedure and the situation must be addressed under the rules on bankruptcy and restructuring; in that case, the liquidator is obliged to file a petition for bankruptcy.
The liquidator’s role
The liquidator is usually the existing managing director or another person designated by the shareholders. However, it must be borne in mind that the liquidator assumes responsibility for the proper conduct of the liquidation and for satisfying creditors correctly in the statutory order. This is therefore not an honorary position, but a role with legal consequences, including financial ones. For companies with substantial assets or a more complex structure of liabilities, we therefore recommend considering whether someone without experience of this procedure should act as liquidator.
Alternative solutions
Before proceeding with liquidation, it is advisable to assess whether a simpler option is available. If the company has economic value, it may be more advantageous to sell it and transfer the ownership interest to an interested party under § 115 of the Commercial Code. If it is part of a wider group, a merger with another company under Act No. 309/2023 Coll. on transformations of companies and cooperatives may be considered — its assets and liabilities transfer as a whole to the successor company, removing the need for a separate liquidation. If the company is insolvent, bankruptcy is the appropriate solution.
This assessment usually takes no more than one meeting and can save months of work and a substantial portion of the costs.
We will guide you through the entire process We will accept the advance payment into escrow, issue the certificate needed to register the liquidator and advise you on the liquidation timetable. If a simpler solution is available for your situation, we will let you know before the process begins. Notary Office, Stará Vajnorská 8, Bratislava III. |
Legislation cited in the article
Act No. 513/1991 Coll., Commercial Code — § 70 et seq. (dissolution and liquidation of a company), § 75, § 115
Decree No. 193/2020 Coll. of the Ministry of Justice of the Slovak Republic, implementing certain provisions of the Commercial Code on liquidation
Act No. 323/1992 Coll., Notarial Code — § 65 et seq. (notarial escrow)
Act No. 309/2023 Coll. on transformations of companies and cooperatives
This text reflects the law as at 11 September 2026. It is for information purposes and does not replace legal advice on a specific matter. Current prices can be found in the office’s price list.
JUDr. Martin Vlha, PhD., notary · Notary Office, Stará Vajnorská 8, Bratislava III
