A business company is a legal entity that is established for the purpose of doing business. It can be created from one or more natural or legal persons. All data on the company are recorded in the commercial register. We know several types of trading companies. Based on the legal form of the company, the legislation regulates the formal status of the entrepreneur. Choosing the type of business company, i.e. the legal form, is very important. For example, in situations whose solution is influenced by the legal form, e.g. in the event of non-payment of obligations or in case of guarantee.
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Business companies are divided into personal and capital companies. Sole proprietorships include a public corporation and a limited partnership, and capital corporations include a limited liability company and a joint-stock company.
In personal business companies, either all partners (for limited liability companies) or only some partners (general partners – for limited liability companies) are jointly and severally liable. Another typical feature of personal business companies is the personal participation of unlimited liability partners in the business management of the company. The termination of a partner’s participation in the company by death, the termination of the legal entity that is a partner, or termination causes the company to be dissolved by law.
In capital trading companies, partners must mandatorily create a share capital and a reserve fund. Partners must make a certain contribution to the company. In the case of capital trading companies, personal participation of partners in the business management of the company is not assumed. The partners influence the society through the bodies of the society. The Commercial Code determines which authorities must be established.
Types of commercial companies according to Slovak and European law can be:
- Public trading company (p.t.c.)
- Limited partnership (l.p.)
- Limited liability company (l.l.c.)
- Joint-stock company (a.s.)
- European grouping of economic interests
- European society (societas europaea)
A public trading company is created by the association of at least two partners. The partners guarantee its obligations with all their assets. V.o.s. they can be established by both natural and legal persons. The partners do business under a joint business name, which must contain the designation “v.o.s.”, and if the business name is the partner’s name, “a spol.” is added to it. Each of the partners can manage and represent the company. It is also possible to agree on who will be entrusted with the management of the company.
A limited partnership combines two types of partners – general partners and limited partners. General partners guarantee the company’s obligations without limitation with their entire property. Limited partners are limited in their liability for the company’s obligations, only up to the amount of their capital contribution. Only general partners can manage and represent the company and have a higher share of the company’s profits.
A limited liability company can be established by one or several partners, with a maximum of 50 partners. All partners are limitedly liable for the company’s obligations, only up to the amount of their unpaid deposit. The deposit must be made in advance and must be at least €5,000 in total. The deposit of each partner must be at least €750. The highest authority s.r.o. is a general meeting, made up of partners. A supervisory board may also be established. The statutory representative of the company is the manager.
A joint-stock company guarantees the company’s obligations with all its assets. Shareholders are not liable for the company’s obligations. The share capital of a.s. is min. €25,000. The capital is divided into a certain number of shares – shares, which are owned by individual shareholders. Founders of a joint-stock company sell shares, thereby raising capital. Important matters of the company are decided by voting at the general meeting of shareholders. A shareholder’s vote at the general meeting has a weight corresponding to the number of shares he owns. The supervisory board supervises the activities of the joint-stock company.
In addition to these types of companies, there are also specific legal forms in Slovakia, such as a state enterprise or a cooperative.