In the second part of our mini-series we will discuss the legal forms of business you can choose from when starting a business in Slovakia.
If you don’t know why you should start a business in Slovakia, please read the first part: Business in Slovakia.
When deciding about the legal form of your future business in Slovakia, you have several options to choose from. We will be discussing the most common types of companies according to Slovak laws.
The sole proprietorship
In Slovakia called ‚‚živnosť’’ and it is used by entrepreneurs usually running a one man show type of business. The biggest disadvantage from legal perspective is that the owner has unlimited liability. The sole proprietorship is simplest form of business.
The limited liability company (Ltd.)
Slovak translation is ‚‚spoločnosť s ručením obmedzeným‘‘ or ‚‚s.r.o.‘’. Can be established by at least one and maximum of 50 shareholders. The limited liability company is the most common business type in Slovakia. It offers many options of share allocation and management rights.
It can be used to build bigger company structures. Very important decision to take into consideration is also if the company will be VAT payer or not. The minimum registered capital for establishing Limited liability company in Slovakia is 5000 €, with single shareholder minimum share of 750 €. You don’t need to fund your bank account with the minimum registered capital. It is enough to sign deposit manager statement proving that you have the required funds.
The joint stock company
The joint stock company in Slovakia is called ‚‚akciová spoločnosť‘‘ or a.s. It is usually registered for large businesses. It’s main advantage is the possibility to divide shares between many shareholders. Minimum capital is 25 000 €. There are 3 types of joint stock company: Private joint stock company, Public joint stock company and since 1 January 2017 also Simple joint stock company. All important decisions are made at general assembly where all shareholders can vote. Shareholder’s vote power is determined by the value of shares he is holding.
The limited partnership
‚‚Komanditná spoločnosť” or ‚‚k.s.” has some unique features. The Limited partnership in Slovakia is a legal form based on agreement between two entities. Silent partners who need to make contribution to the shared capital in the amount of at least 250 €. Their liability in the company is limited by the amount of their contribution. Second entity – general partners are not required to contribute, they have unlimited liability and decision making power.
‚‚Verejná obchodná spoločnosť” or “v.o.s.”. General Partnership in Slovakia is very straight forward legal form of business. Unless agreed otherwise in the Articles of Incorporation, every partner has the same decision-making power and decisions are taken by all partners collectively. Every partner is equally liable for company’s debts with his own personal asset.
In the last part we will describe the process of establishing the business and how to avoid some of the issues.