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Limited Liability Company (spoločnosť s ručením obmedzeným - "spol. s r. o." or "s. r. o.")

This is the most common form of business entity in Slovakia. The registered capital of the company is made up of predetermined contributions of its members (shareholders). The company exists independently of its members. The company is liable for the breach of its obligations with its total assets. The liability of a shareholder for the obligations of the company is limited to the amount of the unpaid shareholder's contribution registered in the Commercial Register (e.g. the balance due in respect of a partly paid share). The company may be established either by a sole shareholder, a natural or legal person, or by two or more persons. However, the company may not have more than 50 shareholders. A company with a sole shareholder cannot be the sole founder or sole shareholder of another company. A natural person may not be the sole shareholder of more than three companies. The company's business name must include "spol. s r. o." or "s. r. o." The founders are obliged to execute articles of association specifying the company's activities, shareholders and their shares, managing directors and the details of its reserve fund. The company must have a minimum registered capital of EUR 5,000 with a minimum contribution by each founder of EUR 750. Each monetary contribution has to be paid up in at least 30% of the monetary contribution before filing the proposal for the company's registration in the Commercial Register. The balance of the unpaid capital must normally be fully paid within five years of the registration of the company, unless the memorandum of association stipulates a shorter period. The aggregate value of monetary and non-monetary contributions paid up before submitting the application for incorporation must be at least 50% of the minimum registered capital. If there is only one founder, the entire registered capital must be fully paid up before the company's registration. The company must create a reserve fund at the time and in the amount specified in the memorandum of association. Unless the reserve fund is established upon incorporation of the company, the company must create such a fund from the first reported net profits by transferring a minimum of 5% of the net profits to the reserve, subject to a maximum of 10% of the registered capital. The reserve fund must be replenished annually by the transfer of at least 5% of the net profits for the respective financial year, until it reaches the amount set out in the memorandum of association of the company, which has to be at least 10% of the company's registered capital. The reserve fund may be used only to cover the company's losses. The General Meeting of shareholders is the supreme body of the company. It is authorized to make all major decisions. It has to be held at least once a year. The General Meeting appoints one or more executives (managing directors) serving as the statutory body of the company. A Supervisory Board may be established, but is not mandatory for this type of company.


©2010 KPMG Slovensko spol. s r.o. , a Slovak limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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