The Government Abolishes the Cost of Aligning Share Capital Due to the Introduction of the Euro

On Friday, the government submitted an amendment to the final proposal of the law on amendments to the Companies Act, which removes the deadline for aligning share capital, thereby relieving entrepreneurs of the costs they would incur due to this alignment related to the transition to the euro.

The amendment proposed by the government removes the deadline for aligning the share capital of a limited liability company and a simple limited liability company, as well as the role of the limited partner in a limited partnership.

Minister of Justice and Administration Ivan Malenica explained that the proposed amendments relieve the economy of costs that it would otherwise incur related to the alignment of share capital, nominal amounts of shares and business interests, and the role of the limited partner with the requirements introduced by the amendments to the Companies Act regarding these amounts.

Entrepreneurial associations have warned about the costs associated with aligning share capital due to the introduction of the euro.

Namely, according to the current solution, with the entry into the eurozone on January 1, 2023, the registration of the change of the currency of share capital from kuna to euro would cost 2,500 kuna if it concerns a limited liability company (d.o.o.), and the same applies to a simple limited liability company (j.d.o.o.) whose share capital is 20,000 kuna (for d.o.o.) or from 10 kuna (for j.d.o.o.).

Entrepreneurs believe that the registration of the currency change should also be exempt from notary fees.

By stipulating that the deadline for alignment in joint-stock companies is one year from the introduction of the euro as the official currency of the Republic of Croatia, joint-stock companies are allowed to make the decision on alignment at the regular general assembly, which they are required to hold once a year and in which a notary participates.

For limited liability companies, the same effect is achieved by stipulating that alignment must be carried out during the first amendment of the company’s contract, status change, or change of business interest, and for limited partnerships by stipulating that alignment must be carried out during the first amendment of the company’s contract.

This ensures that alignment does not incur any additional costs, as it is carried out within the procedure conducted due to the amendment of the company’s contract for some other reason, so the total costs correspond to those costs that entrepreneurs would certainly have, even if they did not carry out the alignment.

If any trading company wishes to carry out the alignment before any other amendment of the company’s contract, for which there is no obligation, it can do so at its own expense.