Business Entities in Slovakia: Legal Structures Explained
1. Sole Proprietorship
Conditions: General (age 18+, legal capacity, clean record) and specific (education/practice).
Types based on capability:
- Handicraft: Requires apprentice certificate.
- Bounded: Requires special certification.
- Free: No specific qualifications needed.
Liability: Unlimited (personal assets included).
2. Ordinary Partnership (V.O.S.)
At least 2 partners under a common business name.
- Liability: Unlimited & joint (liable for all debts).
- Profit: Divided equally (if no initial capital) or by deposit height.
- Decisions: Every partner has 1 vote.
3. Limited Partnership (K.S.)
Two types of partners:
- General Partners: Decision makers with unlimited liability.
- Limited Partners: Sleeping partners, liability up to deposit height.
Profit: General partners (equal parts), Limited partners (by deposit).
4. Limited Liability Co. (S.R.O.)
Most popular in Slovakia. 1 to 50 partners.
- Capital: Min. 5,000 €, min. partner deposit 750 €.
- Liability: Limited (up to deposit height).
- Risk Fund: Created by 5% of initial capital.
- Management: Directors (everyday run), General Meeting (highest).
5. Joint Stock Company (A.S.)
- Capital: Min. 25,000 €. Capital raised by shares.
- Liability: Shareholders have limited liability.
- Shares: Ordinary (voting), Preference (priority dividends), Employee’s (discounted).
- Organs: Annual Meeting, Board of Directors, Supervisory Board (min. 3 members).
6. Co-operatives
Association of members to satisfy specific needs.
- Membership: Min. 5 people or 2 legal entities.
- Capital: Min. 1,250 €.
- Liability: Members have limited liability.
Pros & Cons of Partnerships
Advantages: Easy to establish, increased funds, wider pool of knowledge, creative brainstorming.
Disadvantages: Unlimited liability (often), sharing profits, management disagreements, limited life (ends on withdrawal/death).