Overview of Slovenian Legal Regulation for Possible Transformation of Public Institutions into Commercial Companies

Dr.Sc Bojan Tičar

doi:10.21113/iir.v8i1.382

Abstract

In the present article, the author defines and analyses the legal framework of the transformation of public institutions into commercial companies with an emphasis on the procedures for transforming public institutions into limited liability companies (ltd.). The author first presents the Slovenian legal framework and the new legislation on public-private partnerships (PPP), which was adopted last year. In the second part of the article, the author analyses the new rules, which primarily refer to public companies. These rules apply, mutatis mutandis, to public institutions. The procedures for transforming public institutions into limited liability companies are particularly demanding, as not only the transitional provisions of public-private-partnership legislation regarding public companies apply mutatis mutandis, but also the procedures for the corporate transformation of public limited companies into limited liability companies. The author concludes the article with some open issues regarding such procedures in the Slovenian legal system and the consequences of such transformations for the founders and employees of such transformed public institutions.

Highlights

The transformation of public institutions into commercial companies was envisaged by the Institutes Act adopted in 1991, which in Article 51 allows that the founder of an institution may decide that the institution or its organizational units are organized as a commercial company
Pursuant to the transitional provision of Article 144 of the PPPA, the provisions of this act relating to the transformation of public companies and the awarding of concessions to public companies that are transformed into commercial companies, apply, mutatis mutandis, to the transformation of public institutions
Market prices cannot be created based on the above-mentioned components, as public institutions could compete in the market with prices based only on variable costs, whereas the fixed costs would be covered by the funds intended for providing the public service

Summary

Introduction

The transformation of public institutions into commercial companies was envisaged by the Institutes Act (hereinafter IA) adopted in 1991 (last change 2006), which in Article 51 allows that the founder of an institution may decide that the institution or its organizational units are organized as a commercial company. Pursuant to the transitional provision of Article 144 of the PPPA, the provisions of this act relating to the transformation of public companies and the awarding of concessions to public companies that are transformed into commercial companies, apply, mutatis mutandis, to the transformation of public institutions From this perspective, the transformation of public institutions into other organizational forms is justified for certain public institutions and from the perspective of users of their services and the employees in these public institutions in cases in which the public institutions gain most of their revenue from market activities. It is important how the public service is funded (Korpič-Horvat, 2003; pp 15-30)

PUBLIC SERVICE ACTIVITIES MARKET ACTIVITIES

Conclusion

Findings

List of References