Simplified Limited Liability Company – North Macedonia
The Work Program of the Government of the Republic of Northern Macedonia (2017-2020), part 4. Support to domestic companies, determines the possibility of establishing a special type of company with a minimum amount of share capital of 1 euro. These companies will have a certain, clearly marked label, so that everyone who will cooperate with this type of business entity knows that its founding capital is 1 euro. Based on the Program, an additional comparative analysis was made with the legislation in the Republic of Croatia in the area of company law, whereby it was determined that there is a possibility to incorporate this government measure within the Law on Companies, in terms of the provisions regulate the Limited Liability Company.
The purpose of the Draft Law is to enable the establishment of a limited liability company with a symbolic minimum amount of initial founding capital of 1 euro, by persons-citizens who have an idea for doing business, but do not have sufficient funds in the amount of at least 5,000 euros founding capital, to start their own business. With the application of the provisions of the Draft Law, a reduction of the gray, illegal economy in the country is expected. The Draft Law introduces a new type of limited liability company, entitled “Simplified Limited Liability Company – PDOO”.
Based on this, the applicable new article stipulates that the company can have up to three founders-natural persons, one of whom is a manager, ie a member of the management body. Given that this is a company with a share capital of 1 euro, it is proposed to introduce a special regime for financial operations in terms of disposal of profits, as well as providing and disposing of the required reserve of the company.
The proposed article stipulates that the minimum amount of the share capital of the simplified limited liability company is 1 euro, in denar counter value according to the middle exchange rate of the National Bank of the Republic of North Macedonia on the day of payment, unless the founders agreed to be the day of signing the founding act of the company. The minimum nominal amount of the business share is 10 cents in denar counter value according to the average of the National Bank of the Republic of North Macedonia on the day of payment, unless the founders agreed that it should be the day of signing the founding act of the company. The share capital and the business share in the company must be expressed in whole numbers in euros. The stakes for the taken over business shares are paid only in cash.
The application for registration of the company in the trade register is submitted after the deposits for the undertaken business shares in the company have been paid in full. The company must have a required reserve, which must include ¼ (one quarter) of the company ‘s profit expressed in the annual financial statements, reduced by the amount of the loss from the previous year.
The required reserve can be used for:
1) increase of the share capital by distribution of the reserve in the share capital of the company;
2) to cover the loss stated for the year for which the annual financial statements are submitted, if it is not covered by the profit realized in the previous year; and
3) to cover the loss expressed for the previous year, if it is not covered by the profit expressed in the annual financial statements for the year for which they are submitted.
The simplified type of LLC is expected to increase the number of company registrations in North Macedonia, allowing more enterprenuiers to register a company and run their business through LLC of this type.
The above text is for information purpose only. It’s content cannot be cosnidered a legal advise. Please consult a lawyer for more specific legal information.