The basic forms of doing business for legal entities on the territory of the Slovak Republic are provisioned by Act No. 513/1991 Coll. Commercial Code, as amended in its second part. There are two forms, namely collective and commercial companies, with which the Act further distinguishes the following types:
- General commercial partnership
- Limited partnership
- Limited liability company
- Joint-stock company
- Simple joint-stock company (from 1 January 2017)
Commercial companies are legal entities established for the purpose of doing business. A limited liability company and a joint-stock company may also be established for another purpose, so long as a special act does not forbid it. The founders and partners of a company may be natural persons or legal entities. A natural person or legal entity may be a partner with unlimited liability in only one company.
General commercial partnership
A general commercial partnership has minimally two partners, who do business under a common commercial name. The company is responsible for its obligations with the whole of its assets and the partners guarantee for obligations in common and inseparably with the whole of their assets.
The commercial name of the company must always contain the notation of its legal form, either in the form “verejná obchodná spoločnosť”, or the abbreviation “ver. obeh.” or “v. o. s.”
The foundation document is a partnership agreement. All partners sign and submit a proposal for entry of the company into the commercial register. The partners do not have a deposit obligation stipulated by law; despite this, one may be negotiated in the partnership agreement. Each partner is authorised for managing the commercial business of the company; however, in the partnership agreement it is possible to entrust complete or partial commercial management to only one or several partners. Each of the partners is a statutory body. A profit intended for division is divided among the partners equally; likewise they bear a loss in an equal share.
Limited partnership
A limited partnership has minimally two partners and these are divided into limited partners and general partners. The law places a deposit obligation only on the limited partners, who guarantee for company obligations only to the amount of their unsettled deposits. The minimum amount of deposit of a limited partner is 250 euro. General partners do not have a deposit obligation and guarantee in an unlimited amount.
The commercial name of the company must include the words “komanditná spoločnosť”, or the abbreviation “kom. spol.” or “k. s.”
The founding document is partnership agreement. All partners sign and submit a proposal for entry of the company into the commercial register. The general partners are exclusively authorised for commercial management of the company; in other matters they decide in common with the limited partners. The statutory body of the company is made up only of the general partners. A profit intended for division is divided into a part intended for general partners, who divide it proportionally according to their deposits, and a part intended for limited partners, who divide it in equal shares. The rules regarding the division of a profit and loss may be agreed differently in the partnership agreement.
Limited liability company
A limited liability company is the most commonly used type of commercial company. The number of partners is limited to 1 to 50. A natural person may be the only partner in at most three companies. If a company has only one partner, this person may not be the only founder or partner of another company. The company is liable for a breach of its obligations with the whole of its assets. Partners guarantee for company obligations up to the amount of their unsettled deposits recorded in the commercial register.
The commercial name of the company must contain the words “spoločnosť s ručením obmedzeným”, or the abbreviation “spol. s. r. o.” or “s. r. o.”
The minimum value of the company’s registered capital is set by law at 5,000 euro, and the minimum value of a partner’s deposit at 750 euro. The foundation document is a memorandum of association or a partnership agreement, depending on the number of founding partners. All acting partners sign and submit a proposal for entry of the company into the commercial register. Before submitting a proposal the monetary deposit of each partner must be paid in the amount minimally of 30%, and the total value of the paid financial and handed over non-financial deposits of partners must be at least 50% of the minimum amount of registered capital determined by law.
The rights and obligations of partners and their corresponding participation in the company are expressed in their commercial share in the company, which is determined by the proportion of the amount of deposit in the value of the registered capital of the company. Each partner may have only one commercial share. The commercial share of a partner is transferable to another person only if the partnership agreement permits it. A partner may transfer an entire commercial share or only a part of it on the basis of a Contract on the Transfer of a Commercial Share. A transfer takes effect upon being entered into the commercial register. Partners have a claim on a share of a profit in a proportion corresponding to their paid deposit, so long as the partnership agreement does not stipulate otherwise.
A company may issue bylaws for the purpose of arranging internal organization of the company and those matters which are not arranged in the partnership agreement at all or only marginally.
The highest body of a company is the general meeting, formed by the individual partners, into whose competency, for example, is the approval of a regular and exceptional financial statement, decisions on the division of a profit or payment of a loss, changes to the partnership agreement, on increasing or reducing the registered capital, and others. An agent or several agents are authorised by the statutory body to act on behalf of the company. The company may establish a supervisory board as a controlling body, which in the scope of its competency oversees the activities of agents, inspects the commercial and account books, examines the financial statements and others.
Joint-stock company
A joint-stock company is a company in which the registered capital is composed of a certain number of shares with a certain nominal value. By issuing shares a company creates its equity capital, which becomes property of the company. A share is a security representing the right of the shareholder as a partner to take part in managing the company, in the profit as well as in the liquidation remains in the case of cancellation of the company with liquidation.
A company may be founded as a private or a public joint-stock company. A joint-stock company becomes a publically traded one, if all of its shares or their portion were accepted for trading on a regulated market, which is located or which operates in some of the contractual states of the European Economic Area Agreement.
One founder may establish a company, so long as he/she is a legal entity, or several founders. The foundation document is a partnership agreement or a founder’s deed, and each of them must be prepared in the form of a notarial record on a legal act and must contain a proposal of bylaws.
The commercial name of the company must contain the words “akciová spoločnosť”, or the abbreviation “ akc. spol.” or “a.s.”
The company is responsible for a breach of its obligations in the full amount of its assets. Shareholders do not guarantee the obligations of the company. A subscriber of shares acquires the right of a shareholder as a partner in the joint-stock company corresponding to shares which he/she subscribes to on the day of entry of the company into the commercial register.
The value of the registered capital of the company is at least 25,000 euro. Before the origin of the company the entire value of its registered capital must be subscribed to and at least 30% of the monetary deposits paid. Proposal for entry into the commercial register is submitted by the board of directors and signed by all of its members.
The highest body of the company is the general meeting. The statutory body of the company, which manages the activities of the company and acts on its behalf, is the board of directors. A supervisory board is organized for the purpose of controlling the performance of the board of directors and carrying out the business activities of the company.
Simple joint-stock company
This is a new type of commercial company launched as of 1 January 2017. The registered capital of the company is composed of a certain number of shares with a certain nominal value. The company is responsible for a breach its obligations in the full amount of its assets. A shareholder does not guarantee for company obligations.
The commercial name of the company must contain the notation “jednoduchá spoločnosť na akcie” or the abbreviation “j. s. a.”.
The shares of the company may have only a booked form and may be issued only in someone’s name. The company may be established by one person or several persons. The value of the company’s registered capital must be at least 1 euro. The company may not be founded on the basis of an appeal for subscribed shares. Before the origin of the company the entire value of the registered capital must be subscribed to and all deposits must be paid.
The company may change its legal form only into a joint-stock company.
The highest body is the general meeting; the statutory body is the board of directors, and the controlling body is a supervisory board, the creation of which is not compulsory.
Co-operative
A co-operative is an association of an open number of persons (members of the co-operative) established for the purpose of doing business or ensuring the economic, social or other needs of its members. The commercial name of a co-operative must be noted as a “družstvo”. A co-operative is a legal entity and has at least five members. Members of a co-operative may be natural persons and legal entities. A co-operative is responsible for a breach of its obligations to the entire amount of its assets; members do not guarantee the obligations of the cooperative. Basic capital is at least 1250 euro and is created by the sum of the membership deposits.
The highest body of a cooperative is the membership meeting; the statutory body is the board of directors and the supervisory body is a control commission.
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