The legal regulation of related parties transactions in the Republic of Slovenia underwent significant changes with the adoption of the amendment ZGD-1K, which modified and supplemented the provisions of the Companies Act governing the transparency and approval of transactions with related parties. This amendment implemented Directive (EU) 2017/828 into Slovenian law. The directive aimed to introduce appropriate measures and mechanisms to protect the interests of companies and shareholders, preventing related parties from exploiting their position to the detriment of these interests. The main protective mechanisms mandated by Directive (EU) 2017/828 include prior approval of the transaction by the competent authority and the public disclosure of information about the concluded transaction. The ZGD-1K amendment introduced stricter rules specifically for transactions between a company and members of its management or supervisory bodies, as well as its procurators and people associated with them. Special arrangements also apply to the conclusion of the employment contracts, loan agreements and consultancy contracts with members of the supervisory body. Violations of the rules governing related parties transactions may result in specific legal consequences, both in internal and external relations. A violation primarily occurs when a transaction is concluded without obtaining the required approval from the competent authority. In principle, such a transaction does not result in the nullity of the agreement unless special circumstances justify such an outcome. The principle of contract affirmation must also be considered in transactions with related parties. In certain specific cases, such as transactions involving company officials or the conclusion of loan agreements, employment contracts and consultancy contracts, the regulation may be stricter, making approval a condition for the conclusion of a valid contract. In the absence of such approval, it is deemed that there is no valid legal basis between the parties. On the other hand, the law allows for the possibility of remedying the deficiencies, thereby validating the legal transaction.
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