LIQUIDATION OF SIMPLE LIMITED LIABILITY COMPANY
Amendments of the Companies Act, published in the Official Gazette No. 111/2012 in 2012, introduced a new business entity: the Simple Limited Liability Company (abbreviation: j.d.o.o.) with a minimum initial capital of 10,00 Kuna. The establishment of such a company begins at the public notary who compiles a record that the company has been established, an application stating that the company will be entered into the court register and a statement on the absence of debts. Then, the public notary delivers all necessary signed and certified documents to the HITRO.HR – e-Company service. HITRO.HR then delivers these documents to the commercial in order for the court to register the company, which should occur within 24 hours. HITRO.HR then delivers the Establishment Decision and the Certificate of assigned Personal Identification Number (OIB number) to the public notary. The newly founded company has to make an official stamp and open a business account, so that the initial capital can be transferred into the company’s account. A Simple Limited Liability Company is established by means of a simplified procedure in order to help prevent unregistered activities and in order to facilitate establishing companies in other EU member states that have lower requirements when it comes to a company’s minimum initial capital.
There were 19.209 Simple Limited Liability Companies established since the previously mentioned Amendments of the Companies Act entered into force untill March 2015. Simple Limited Liability Companies have all the characteristics of Limited Liability Companies and, if not otherwise prescribed, all regulations applying to Limited Liability Company also apply to Simple Ltd. The termination of Simple Limited Liability Companies has appeared to be problematic since the same regulations apply both to Limited Liability Companies and Simple Limited Liability Companies. On the one hand, it has been made easier for these entities to enter the capital market but, on the other hand, regulations that apply to terminating the company are the same as those for regular Limited Liability Companies, which results in high costs. Currently the public notary and court fees amount to approximately 6.000,00 Kuna.
Legislators have recognized such omissions and have started working on new Amendments to the Companies Act, which should enter into force on 1st October 2015. We will provide an overview of the most important changes in this article. Also, the Act on Court Fees and Act on Public Notary Fees will be amended at the same time as well.
The decision on the termination will, in the future, be published on the court register’s web sites, instead of the Official Gazette, which will significantly shorten the publication process.
Moreover, creditors will only receive one notification to register their demands, instead of receiving three. Also, there will be a decrease in the amount of time in which they have to register their demands – from the previous six months to just two months. It is therefore obvious that the legislator’s intent is to speed up the procedure.
Furthermore, the deadline for the division of the company’s assets will be decreased, from one year to six months (from the moment the creditors were notified to register their demands).
The Act on Public Notary Fees will change so that Simple Limited Liability companies will be made exempt from fees. This means that members of Simple Ltd will be exempt from paying fees on all public notary documents and actions regarding the company’s liquidation.
It is, therefore, the final aim to reduce the costs of liquidating, i.e. terminating Simple Limited Liability companies. This should establish a balance between establishing and liquidating Simple Ltd with regard to Limited Liability Companies.