I have often taken the side of the Association Voice of Entrepreneurs (UGP) in ‘Justice’ because I believed they rightly point out the shortcomings of this government regarding the economy. But this time I believe they are wrong regarding the obligation to submit a request to the Court Register for the change of currency from kuna to euro.
I must admit that I initially thought it was yet another stupidity from the authorities who unnecessarily administratively burden entrepreneurs. Namely, for the mentioned obligation, entrepreneurs will be forced to deal with paperwork instead of the state doing it, I thought, as did UGP. The issue is that a request must be submitted to convert the share capital now expressed in kunas to euros starting from January 1.
And indeed, when I stumbled upon these obligations being prepared on eConsultation, I wondered what these (authorities) are now trying to be clever about. Because as UGP says, ‘changes within the Court Register should be automated, thus accommodating entrepreneurs who are already struggling to survive the crisis caused by the pandemic, the war in Ukraine, and inflation.’ I repeat, I thought the same, especially since we know that banks will automatically convert kuna to euro for everyone who holds their money in accounts, for which their IT experts are already well prepared. So why couldn’t the Court Register implement this as well, I wondered, and so does UGP.
I could write a lot…
I even decided to write about this in previous issues of Justice, first asking lawyers whom I usually call when I’m not sure about something (which is often), so I could criticize the authorities properly. But fortunately for me, while googling to better understand what it was about and reading publications, I came across a text by my dear and respected columnist Marija Zuber from Lider. I had often bothered her to explain some things to me when I was preparing a text, and now she helped me understand the obligation to align share capital thanks to her article in Lider.
So, the matter is not black and white, as UGP and I thought. In fact, it is necessary for companies to handle these matters themselves because, as Zuber explains, for limited liability companies (d.o.o.), the current minimum share capital of 20,000 kunas will be 2,500 euros starting January 1, and for sole proprietorships (j.d.o.o.), instead of ten kunas, it will be one euro. Now, the issue is that the numbers will have to be rounded (as prescribed) because this will not happen automatically during the currency conversion. This means, Zuber writes, that ‘when aligning with amounts rounded in euros, commercial companies will consequently experience a decrease or increase in the total amount of share capital.’ If the capital decreases after alignment, it is prescribed that the difference be recorded in the company’s capital reserves, which can cover losses, etc. (it is prescribed what can be done). The same applies in cases where the share capital increases after alignment.
