Limited Liability Company

General Information

The s.r.o. is the most popular company providing limited shareholder liability and attracts mostly small and medium-sized businesses. A relatively moderate statutory framework allows a high degree of flexibility in drafting the memorandum of association.

Incorporation

Formation by at least one person - individual or legal; nationality irrelevant.
However, an s.r.o. with sole shareholder cannot be sole founder or sole shareholder of other company. Also, individual may not be sole shareholder in more than three companies.
Incorporation requires association agreement/foundation memorandum in the form of a notarial deed followed by entry into the commercial register by the registry court. Company comes into legal existence immediately upon registration.
Application should be filed within 90 days of foundation date. Before application can be filed, at least 30 % of cash contributions to registered capital must be paid up; if s.r.o. is founded by a single founder, capital must have been fully paid up.

Duration of incorporation approximately 5 days from date of application..

Incorporation costs of approximately € 450.

Capitalisation and Financing

The statutory minimum share capital amounts to SKK 200,000 (approximately € 5,000). The minimum amount of a shareholder's contribution amounts to SKK 30,000 (approximately € 750) being multiple of SKK 1,000. Shares can be paid in cash or kind. Non-cash considerations must, however, be valued to ensure their adequacy.
No less than 30 % of every pledged investment must be paid up prior to registration, with total paid up investment being minimum SKK 100,000. In case of a sole founder, capital must have been fully paid up.

Board Structure

An s.r.o. is managed and represented by its managing director(s) (konatelia) in and out of court. The principle of individual management and representation applies, unless otherwise provided for in the articles.

Shareholders' decisions are made by way of shareholders' resolutions at the annual or extraordinary general meeting (valné zhromaždenie).

A supervisory board (dozorná rada) is established only if required by association agreement. When required, it must have at least three individual members; managing directors may not members of the supervisory board.

Annual Costs

Minimal (filing and registration fees).

Corporate Taxation and Financial Reporting

As of 1 Jan. 2004, Slovak corporations are subject to corporate income tax at flat rate of 19 % on their worldwide profits. Foreign companies with permanent establishment in Slovakia are charged on the basis of income of permanent establishment and any other Slovak source income. Foreign companies without permanent establishment in Slovakia may become subject to income tax, if they derive income from activities in Slovakia for a period exceeding six months.
Unless chosen otherwise, tax year is calendar year.
Annual accounts must be approved by the general meeting within six months of the end of the business year. Accounts must consist of balance sheet, profit and loss statement and annex. Financial statement must be audited and published, if company meets two of the following criteria: total assets exceed € 500,000, turnover (excluding VAT) exceeds € 1 Million, workforce exceeds 20.
Accounting must be done according to Slovak GAAP.

Employee Participation in Corporate Bodies

None.