Limited liability company (s.r.o.) is a kind of corporation which is one of the most common legal forms of doing business in Slovakia. It can be founded by one person but not more founders than 50. This type of company creates registered capital (at least EUR 5000) with the minimum contribution of every member EUR 750.
Founding Limited liability company in Slovakia
If you want to found Limited liability company in Slovakia, you have to choose the business name of the company, the scope of your business activities, the registered address, to draft Memorandum of Association or Foundation Deed (signatures must be verified) and to obtain a trade licence/trade permit (or another business permit)
The company starts to exist from the date it is registered in the Commercial Registry (within 90 days from the founding of the company or by the receipt of documents demonstrating trade or by other commercial entitlements).
Basic capital of Limited Liability Company is created in advance through the deposits of its members. The value of basic capital is at least € 5,000. The value of every member’s deposit is at least € 750.
The advantages of an Ltd. are: low level of the basic capital, only one founder is necessary, easy to establish and manage the company especially in the case of one owner.
Disadvantages of an Ltd are: mandatory creation of a reserve fund, partners must not leave the company unilaterally.
Formation of Limited liability company in Slovakia:
Limited liability company is established by one or more members (but maximum by 50 – either legal or natural persons) by the execution of a Foundation Deed (if there is just one member) or Memorandum of Association (if there are several members) by its member(s).
Minimum capital requirement:
The registered capital for Limited liability company in Slovakia (the sum of its shareholders’ contributions) is in the amount of minimum EUR 5,000 and the contribution by every member (shareholder) must be at least EUR 750. The registered capital should be paid up within the time period which has been established in the Foundation Deed, but not later than five years from the date of incorporation at the latest.
The reserve fund of Limited liability company in Slovakia must be created at least in the amount of 10% of its registered capital. The contribution to the reserve fund can be also in the amount of at least 5% of the company’s net profits until it reaches the amount of 10% of its registered capital.
Limited liability company in Slovakia is obliged to create these mandatory bodies:
a) General Meeting – the supreme body that decides on the most important matters,
b) Executive Director(s) – natural persons who act on behalf of the company.
There can also be a Supervisory Board established.
Limited liability company is fully liable for any breach of its obligations, but each member is only liable to the unpaid part of their contribution to the registered capital of the Limited liability company which is registered in the Commercial Register.
Basic steps how to incorporate Limited liability company:
1. Execution of Foundation Deed/Memorandum of Association by the Members
2. Obtaining a registered office
3. Application for a trade license to do a business at the local administrative body
4. Contribution to the registered capital/administration of contributions
5. Application for registration in the Commercial Register
6. Registration with the tax authorities for income tax and VAT
7. Registration for social insurance at the local Social Insurance Office
8. Registration for health insurance at the health insurance company according to the choice of the employee.
If you want to start doing business with Limited liability company in Slovakia, do not hesitate to contact us.
We are glad to provide you our services.