Choosing the Right Business Structure in Slovakia: LLC, Joint-Stock Company, or Other?
Navigating the realm of company formation in Slovakia can be difficult. Whether you’re an international entrepreneur or a local businessperson, the first step towards a successful venture is selecting the appropriate legal structure. With several options available, the challenge is discerning which one aligns perfectly with your business goals.
Slovak LLC (Limited Liability Company) in Slovakia:
An Slovak LLC, or “spoločnosť s ručením obmedzeným (s.r.o.)” in Slovak, is the most popular business structure, and for good reasons.
- Limited Liability: As the name suggests, members of an LLC are only liable to the extent of their investment in the company.
- Flexible Management: Unlike other structures, an LLC doesn’t require a supervisory board. This means the need for tighter management and therefore lower salary costs.
- Lower incorporation costs: incorporation starts from 500 €.
- Relatively low share capital: minimum base capital is 5.000 €.
- Quite difficult termination and liquidation: Liquidation of an LLC is quite costly and lengthy. It takes at least 6 months.
- Prohibition of chaining: Slovak LLC with one shareholder cannot be the sole founder or sole shareholder of another limited liability company – for example, if you are the sole shareholder of a limited liability company, that company cannot set up another limited liability company for that reason, but if the limited liability company has at least two founders, the limited liability company can set up an unlimited number of other limited liability companies.
- Shareholder restrictions: Slovak limited liability company cannot be established by a person who has a tax or customs duty arrears exceeding EUR 170 – a public company, a limited partnership and a joint-stock company can also be established by persons with tax and customs duty arrears, regardless of the amount of the arrears.
Considering an LLC? It’s particularly suited for small to medium-sized businesses or startups. But, to ease the journey, consider acquiring a Slovak ready-made company. This approach fast-tracks your entry into the Slovak market, eliminating the hassle of lengthy procedures.
Joint-Stock Company in Slovakia:
A Joint-Stock Company, or “akciová spoločnosť (a.s.)”, is a sophisticated structure designed for larger operations, often with numerous investors.
- Ability to Raise Capital: By issuing shares, Joint-Stock Companies can attract significant investments.
- Transferability of Shares: Shares in this structure are more straightforward to transfer, providing flexibility to shareholders.
- Image: image of a strong and reliable business partner.
- Anonymity: decent anonymity of shareholders of a.s.
- unlimited number of shareholders (partners).
- Liability: shareholders are not liable for the company’s obligations.
- Tax benefits: possible zero tax burden on the sale of a subsidiary project.
- Financial requirements for Establishing a joint stock company: it is more financially demanding than establishing a limited liability company. This results at least from the fact that the memorandum of association or the deed of incorporation must be drawn up in the form of a notarial deed. In the case of an LLC, it is sufficient to notarize the signatures on the articles of association or the deed of incorporation. This means that a notary is required for the establishment of a joint stock company. Another cost that differs significantly is the court fee for registering the company in the commercial register. The court fee for registering a joint stock company in the commercial register is EUR 829.50, whereas the court fee for registering a limited liability company is EUR 331.50.
- Complex Management Structure: Joint-Stock Companies must have a board of directors + supervisory board and obey a set of formalized governance rules.
- Higher share capital: minimum share capital of Slovak joint stock company is 25.000 €.
If your business strategy includes public listing or if you’re managing large-scale operations, a Joint-Stock Company might be your best fit. And while establishing one can be time-consuming, there’s a shortcut: Slovak ready-made joint stock companies. Purchasing one can eliminate initial setup hassles, letting you focus on your business strategy right away.
Other Business Structures:
While LLCs and Joint-Stock Companies dominate the landscape, Slovakia offers other structures like Limited Partnerships and Branch Offices. The right fit depends on your business size, nature, and long-term goals. However, remember that every business structure comes with its unique setup challenges.
Unsure which business structure suits you best? Save time and navigate the complexities of company formation in Slovakia with our selection of ready-made companies.
Establishing a foothold in the Slovak market demands careful consideration of your business structure. Whether you lean towards an LLC, a Joint-Stock Company, or another structure altogether, one thing remains constant: the undeniable advantages of Slovak ready-made companies. Dive into your entrepreneurial journey in Slovakia with clarity, confidence, and a solid foundation.
Autor článku: Mgr. Dominik Ondrišeje
Dominik is co-founder of the SetupMART project. Dominik is responsible for corporate services and implementation of modern technologies in our services at SetupMART. Dominik is dedicated to the sale of ready-made companies since 2011. Dominik studied law at the Pan-European School of Law.