SIMPLE LIMITED LIABILITY COMPANY (Ltd.) WITH 10 KN LEGAL CAPITAL
On 12th July 2012 the Parliament of the Republic of Croatia got a Bill on Amendments to the Corporations Act which allows one to establish a Ltd. with the legal capital in the amount of just 10 Kn.
Basic purpose of these amendments is to enable both Croats and foreigners a simpler way to found a company and to boost self-employment. With the day of Croatian accession to the EU companies founded in other member states shall gain the right of freedom of establishment and will, therefore act freely on Croatian territory with no need to form separate organizational units. Considering that other EU member states prescribe lesser legal capital for companies, these amendments shall enable foreign entrepreneurs to found Limited Liability Company in Croatia in a simpler way and with lesser legal capital.
This version of Limited Liability Company shall be called simple Ltd. The same provisions shall apply to simple Ltd. as do to Ltd., unless other is prescribed by the Law for simple Ltd..
Simple Ltd. shall be able to enter into business after the lowest amount of legal capital of 10 Kn is paid in full. The lowest amount of a business share shall be 1 Kn. The founding costs shall be lower since one will use predefined forms which will also ease and speed up the founding process. The founding costs should amount approx. 750, 00 Kn.
Simple Ltd. can have 3 members at most and only one member of the management board. It is also going to have to have certain legal reserves. A quarter of the Ltd.’s year’s profit shall be invested into the legal reserves. If a company is threatened with insolvency, the companies’ assembly shall be immediately convened.
When the legal capital of a simple Ltd. reaches the amount of legal capital of a classic Limited Liability Company, the same provisions shall apply to simple Ltd. as do to Limited Liability Company.