Establishment of a simple limited liability company (j.d.o.o.) is a procedure by which a legal entity is established that enables owners to operate under the protection of limited liability. This type of company is often a preferred option for small and medium-sized enterprises, as it provides some certainty and flexibility in the conduct of business.
The business of a simple d.o.o. can be started with the lowest amount of share capital of EUR 1,00 paid in full in cash, and the lowest amount of business stake is also EUR 1,00. A simple limited liability company is established using pre-prepared forms and the start-up costs are approximately EUR 150,00.
A simple company can have a maximum of five company members and only one board member. It must also have legal reserves, in which a quarter of the amount of the company’s profit shown in the annual financial reports minus the amount of the loss from the previous year is entered. If the company is in danger of insolvency, the general meeting of the company must be called immediately.
When the share capital of a simple limited liability company reaches the amount of the share capital of a classic d.o.o., the rules of a classic limited liability company begin to apply to the simple company.
In order to comply with legal regulations and regulations, j.d.o.o. must also keep appropriate business books, submit annual financial statements and pay taxes and contributions according to applicable laws.
Setting up a simple limited liability company provides entrepreneurs with a legal structure and protection for running their business, thereby reducing personal risk and facilitating access to financial resources. It is important to consult with a lawyer in order to properly understand the specifics and rules related to the establishment and management of a limited liability company in the Republic of Croatia.