Stock Corporation

General Information

The a.s. offers the advantages of liability limited by shares, relatively easy transfer of shares and access to stock markets. It is therefore usually chosen by larger businesses. Statutory governance structure and rules on capital protection are particularly strict.

Incorporation

Formation by at least one person - individual or legal; nationality irrelevant.
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 a.s. 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 € 850.

Capitalisation and Financing

The statutory minimum share capital amounts to SKK 1,000,000 (approximately € 25,000). Shares can be paid in cash or kind. Non-cash considerations must, however, be valued to ensure their adequacy.
No less than 30 % of nominal value of shares to be paid in cash must be paid up prior to constituent general meeting. If subscriber has chosen cash contribution, subscriber has to pay in at least 10 % of nominal value of subscribed shares within period specified by founders. Remaining contributions must be made within one year after registration.

Board Structure

An a.s. is managed and represented by its board of directors (predstavenstvo) in and out of court. Members are appointed and discharged by general meeting; maximum term is five years. 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).

The establishment of a supervisory board (dozorná rada) is mandatory. The board must consist of at least three individuals; managing directors may not members of the supervisory board. If company workforce exceeds 50, two-thirds of board members are elected by general meeting and one third by the employees.

Annual Costs

At least a few hundred Euro, depending on size of enterprise.

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

If company workforce exceeds 50, two-thirds of the members of the supervisory board are elected by general meeting and one third by the employees.