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From 1 January 2017, the so-called simple share company will be introduced in Slovakia.

The call for changes in entrepreneurship has been answered. The decision to create a new form of company aims to offer a complex solution for risk investment, especially in connection with the start-up phenomenon.

A simple share company (“j.s.a.”) is a corporate entity which joins elements of a limited liability company with those of a public limited company. A simple share company is liable for its debts up to the total amount of its assets. Shareholders are shielded from liability.

A simple share company can be founded by one or several persons. In contrast to a public limited company, a simple share company cannot be based on a call for subscription of shares. Before the company is established the total value of the registered capital must be subscribed and all contributions paid. This requirement should not pose a problem since the minimum registered capital is one euro. The deed of foundation, or the memorandum of association, must be drafted in the form of a notarial record, and include the company’s internal rules. In these, the shareholders can, for example, limit or exclude transferability of shares.

The company’s shares can only be issued as booked (not chartered) and as registered shares (not bearer shares), meaning that they have to be administered by the central depository, which will also keep a register of shareholders.

Corporate bodies are the general meeting as the supreme body composed of all shareholders, and the board of directors, which manages the company’s activities and acts on its behalf. Appointment of a supervisory board is optional. Contrary to a public limited company, shareholders can also make resolutions outside the general meeting (per rollam). A proposal for a resolution per rollam is sent to the shareholders by the board of directors. Should a shareholder fail to respond, it is considered as a vote against the proposal.

Interestingly, apart from the traditional legal reasons for dissolution of a company, shareholders will also be able to specify any other reasons leading to dissolution.

Apart from merging two simple share companies, a simple share company can also merge with a public limited company, which will be its legal successor. The Commercial Code only allows transformation of a simple share company into a public limited company.

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