What is the main source of law authorising this entity form?

Companies Act (Zakon o gospodarskih družbah (Official Gazette of the Republic of Slovenia, no. 65/09 as amended)).

Give a brief summary of the entity form:

Does the entity possess separate legal personality?

The d.o.o. has legal personality.

(Maximum) period of existence

There is no maximum period of existence.

Governing document(s)

The d.o.o. is governed by its Articles of Association.

Liability of incorporators / shareholders

Shareholders are not personally liable for the debts of the company.

Limited liability is subject to limited instances of piercing the corporate veil.

(Governing) bodies

A company’s corporate governance may be organised as a one-tier or two-tier system.

The main difference between the two (2) systems is that in the one-tier system, a company has one (1) or more executives, in addition to the Shareholders’ Meeting, which appoints them. In a two-tier system, there are two (2) bodies: A Supervisory Board, which controls the second body – one (1) or more executives (directors). A company is required to have at least one (1) executive (director), who shall manage and represent the company. In practice, one-tier systems are most commonly seen.

Other particularities

Can this type of entity be involved in international transactions and restructurings (e.g. cross border mergers, asset acquisitions and divestitures, equity acquisitions, conversions etc.)?

Under Slovenian law, it is possible for d.o.o. to enter into legal mergers (whereby the company ceases to exist by operation of law and its assets are acquired under universal succession of title), divestitures of all or a portion of its assets and liabilities (with universal succession of the relevant assets), and conversions (changing into another form of legal entity without ceasing to exist).

International restructurings like the above are possible, however, they are subject to EU legislation (e.g. cross border mergers within the EU) or European Court of Justice rulings.

Can this type of entity be publicly listed or held, or its securities be issued to members of the public?

No.

Can this type of entity be used for a non-profit or charitable organization?

Generally, no, given its nature as a commercial entity, with the ability to make profit distributions, and being subject to corporate income tax. A non-profit or charitable organisation should be organised as an association (društvo) or institution (ustanove).

Give a brief summary of the process of incorporation, formation, or organization, including:

Main documents required

Articles of Association are the founding document of a limited liability company.

Documents for the appointment of directors and Supervisory Board (if applicable), confirmation from the bank that the funds were paid, report on in-kind contributions (if applicable), etc.

If a shareholder is a foreign natural person or legal entity, he/she/it will have to acquire a Slovenian tax number, which can be obtained from the local tax office (FURS). The same applies for directors.

If a shareholder is a foreign natural person or legal entity, he/she/it has to submit to the court register relevant certificates, extracts or similar documents issued by a competent authority which prove that a shareholder is fit to act (e.g. there are no outstanding tax liabilities, misuse of VAT identification etc.), if Slovenian authorities do not have access to the relevant foreign records or registers.

Involvement of notary, company register, governmental authorities

The incorporation procedure requires the submission of all the foundation and other documents directly to the Business Registers Agency (VEM AJPES) or by way of a Notary Public which then files the request with the competent registry court.

Entry in the register, is confirmed with a court decision, which finalises the incorporation.

Timing (estimate)

The timing varies; however it usually takes up to two (2) weeks for the court to issue the decision from the date that the notary filed the request to the competent court.

Main costs, including registration and similar fees (excluding legal fees)

The main costs are the lawyers/notary/translation fees (if required). There is a minimum share capital requirement of EUR 7,500.00 for the incorporation of a d.o.o. under Slovenian law.

Is a description of the anticipated business or purpose of the entity required for incorporation, formation or organization?

The business activities must be stated in the Articles of Association.

Minimum number of incorporators / shareholders and residency requirements

There must be at least one (1) shareholder upon incorporation, and there is no residency requirement for incorporators.

Minimum number of directors (or other applicable officers) and residency requirements

There must be at least one (1) director upon incorporation, there is no residency requirements for the director. A director does not need to be a Slovenian tax resident, but a Director may be considered a Slovenian tax resident if certain conditions are met.

Minimum share capital, or equivalent, and payment requirements (including opening a bank account)

EUR 7,500.00 is the minimum share capital which can be provided in cash or as an in-kind contribution.

The amount that is paid in cash must be paid to the bank account of the d.o.o.

Prior to applying for entry in the register, each shareholder must provide at least a quarter of the share contribution, and the value of all guaranteed contributions must be at least EUR 7,500.00.

The contributions in kind must be provided in full before the application for entry in the register. Prior to filing for registration, shareholders are required to provide an appraisal report for the in-kind contributions.

Procedures for opening a bank account differ, depending on the chosen bank.

Is the physical presence of incorporators/directors/shareholders required in the jurisdiction for incorporation, formation, or organisation?

The process may be carried out by virtue of a power of attorney. According to the latest changes to the Companies Act is also possible to establish a LLC online using online video conferencing, without the need for the incorporators/directors/shareholders to be physically present at a notary or other registration authority. However, this option has not yet been widely adopted.

Is a tax identification number, or equivalent, required? If so, how is it obtained?

The company obtains the identification number (matična številka) and tax number upon registration. If required, the company must obtain an identification number for VAT from the Slovenian tax authorities.

What is the title of the applicable company registry?

Agency of the Republic of Slovenia for Public Legal Records and Related Services (Agencija Republike Slovenije za javnopravne evidence in storitve – AJPES).

What types of information must be filed at the (company) register, and which of them will it be publicly available, e.g.:

The information listed below must be filed at the AJPES and is publicly available:

• Articles of Association;
• Date of incorporation;
• Name, title of office, and business address;
• The business activities of the company;
• Share capital;
• Duration of the d.o.o. (if applicable);
• Identification information of directors and members of Supervisory Board (if applicable);
• Shareholder(s) and their identification information;
• Information regarding insolvency and liquidation;
• The annual accounts;
• Encumbrances on the shares; and
• Merger and demerger documents.

In Slovenia, there is the register of 'beneficial ownership' (UBO Register) and d.o.o. must enter the ultimate beneficial owner to the UBO Register.

In Slovenia, there is a register of non-possessory liens and pledged movable property which is a database on liens, prohibitions of transfer and burdens on movable property.

What is the title of the executive body and its members? What are their main duties, tasks and responsibilities?

One (1) or more executives (directors) who represent the company and manage the business of the company.

How are the members of the executive body appointed, dismissed and replaced?

They are appointed, dismissed, and replaced by the resolution of the shareholder(s). If the company has a Supervisory Board, they appoint and dismiss the directors. Any changes must be registered with AJPES.

Is it possible to appoint corporate directors or must all directors be natural persons?

Only natural persons can be appointed as directors. Corporations or other entities cannot be appointed as directors:

• The d.o.o. may have one (1) or more directors who may represent the company jointly or individually. If they represent the company jointly, they must adopt any decisions together. Articles of Association may stipulate the manner of such decision-making process or determine functions of each directors.
• There is no formal difference between corporate and executive directors.

Is there a requirement to have non-executive directors? How are they appointed, dismissed and replaced? Do non-executive directors serve on a separate body (two-tier structure) or can a one-tier board (with executive and non-executives) be appointed, or is some alternate structure used?

In a d.o.o., there is no formal difference between the executive and non-executive directors under Slovenian law (as there is for joint stock company) but in contrast to a joint stock company, a d.o.o. cannot have a Management Board (slov. upravni odbor) (or Board of Directors).

The d.o.o.’s corporate governance can be organised as either:

• One-tier system: Besides the Shareholders’ Meeting, the d.o.o. has one (1) or more directors.
• Two-tier system: Besides the Shareholders’ Meeting, there is a Supervisory Board which controls one (1) or more directors.

a. b.

What is the title of the body of owners / shareholders / members, and what are the main tasks / responsibilities / powers of that body?

Shareholders adopt decisions at the Shareholders’ Meeting (skupščina družbenikov) or in writing. They have all rights and responsibilities provided to them by law and the Articles of Association, that are not conferred upon the directors or other bodies within the company. The main rights regard adoption of annual reports, amending of the Articles, the appointment of directors, capital reductions, liquidation etc.

What are the majority and quorum requirements for decisions by the shareholders? Can they be varied or changed?

The Shareholders’ Meeting is validly constituted if the those in attendance constitute a majority of the votes.

Unless otherwise stipulated by law or Articles of Association, the members of the Shareholders’ Meeting decide by a majority of the votes cast.

Any special governance regimes (e.g. depending on size, being listed at a stock exchange, or other criteria)?

Under Slovenian law, there is a special regime for small, medium, and large companies. Differences in these regimes relate primarily to business records, annual reports and penalties.

What are the periodic accounting obligations incumbent upon the entity? To whom must those accounts be submitted?

Companies have to manage books of accounts and prepare year end accounts once a year in accordance with the Companies Act and the Slovenian Accounting Standards or International Financial Reporting Standards. Based on year end accounts, companies must prepare annual report within three (3) months from the end of the financial year. The three (3) month deadline applies to all annual reports except for consolidated annual reports where the deadline is four (4) months from the end of financial year.

The companies must submit annual reports for publication within three (3) months from the end of the financial year and audited and consolidated annual reports within eight (8) months from the end of the financial year.

Is the entity permitted to determine its own financial year?

Yes.

Is the entity subject to any statutory (external) auditor obligations?

Medium and large companies, as defined by law, must have their accounts externally audited each financial year.

Requirements to appoint other persons (officers, secretary, internal auditor / accountants). If so, what are their functions? Are there any residency requirements?

No.

What is the title designated for 'ownership interests' (e.g. shares, quota, interests, membership)?

Business share (poslovni delež).

Are different classes of ownership interests possible? If so, what are some examples of different classes?

There are no different classes of ownership interests in a d.o.o. in contrast to a d.d. However, in the Articles of Association it may provide different rights to different ownership interests.

What documentation is required for the transfer of ownership interests?

For any transfer of a business share, a notarial deed of transfer must be executed before a notary in Slovenia. The Articles may contain transfer restrictions (e.g. approvals and/or pre-emptive rights) that must be complied with.

Are there any additional formal requirements required for the transfer of ownership (notary, approvals, stamping, filings, corporate records)?

The registry court issues its decision based on the filing of the notary regarding the transfer of the business share.

Are there any applicable stamp duties imposed when transferring ownership interests?

No.

How are shares issued? (including information on payment obligations, registration requirements)

With respect to a d.o.o. there is no issuance of shares in contrast to a d.d.

Articles of Association of a d.o.o. may stipulate how the shareholders pay the share capital subject to the provision regarding minimum share capital as described above. If not determined otherwise, shareholders must pay at least a quarter of their own share capital, and the value of all guaranteed contributions must be at least EUR 7,500.00. Articles of Association stipulate the ownership interest of each shareholder and which is also available on the business register.

In addition, any increase of the share capital must be registered with the business register (Shareholders’ Meetings decide on an increase of the share capital.).

Further information on equity contributions, e.g., non-cash payments on shares, (share premium) contributions without issuances of shares, can partially paid shares/ownership interests be permitted and what are the restrictions on them?

If all or part of the share capital is provided as an in-kind contribution, the Articles of Association must state each in-kind contribution separately, the amount of the in-kind contribution, and the shareholder making the contribution.

The contributions in-kind must be provided in full before the application for entry in the register. Also, the shareholder must prepare and sign a report on in-kind contributions before the application for entry in the register.

If the total value for which an in-kind contribution is given is more than EUR 100,000.00, the shareholders must have it be evaluated by the auditor.

Share premium contributions – i.e. equity contributions without increase of the share capital are possible.

Any requirements with respect to share cancellation, share repurchase and other capital reductions

Articles of Association may stipulate that a shareholder may withdraw or be excluded from the company and determine the conditions, procedure, and consequences thereof. With the withdrawal or exclusion of a shareholder, the business share of such shareholder ceases to exist, and all the rights and obligations associated with it.

Within three (3) months of a withdrawal or exclusion of a shareholder, the remaining shareholders must –

• adopt a resolution on the reduction of the share capital, or
• take over new share capital or increase their current share capital in proportion to their current business shares.

The company may repurchase its own business shares, however, it cannot acquire all business shares.

The Shareholders’ Meeting may decide to reduce the company's share capital. The reduction is valid only –

• if the director issues a resolution on the reduction of the share capital at least twice, and in the announcement asks creditors to declare whether they agree to a reduction in share capital; creditors known to the company must be called upon directly; or
• if a company settles claims or provides security/collateral to creditors who have not agreed to a reduction in share capital.

The reduction of the share capital may be registered only after one (1) year from the last announcement referred to in clause a of the preceding paragraph, and after the director provides proof that the company has settled claims of the creditors or provided them with security/collateral referred to in clause b of the preceding paragraph.

Any requirements with respect to distributions to shareholders?

Shareholders have the right to a share in the distributable profits, as determined in the annual balance sheet, unless otherwise provided by the Articles of Association. Shareholders decide on the adoption of the annual report and the use of distributable profits.

Profits are divided in proportion to the amount of the business shares, unless otherwise provided by the Articles of Association.

Can the owners or shareholders adopt a restrictive or governing agreement among themselves such as a Shareholders Agreement?

Yes, the provisions in such agreement should not contradict the Articles of Association or mandatory provisions, but additional and/or more detailed provisions are allowed.

Which are the typical annual maintenance costs of maintaining the existence and legal good standing of such an entity (excluding legal fees)?

There are no maintenance costs for companies in good standing [Note to Multilaw: can you confirm?]. However, it must maintain a registered address in Slovenia, and it must submit its annual accounts. Relevant costs pertain to its office address (e.g. rent payment, utility costs etc.), payment of directors remunerations (if any), accounting services provided by an external accountant (if not employed in the company), employees’ salaries, registration fees regarding registration of corporate changes and annual financial statements, taxes etc.

What are the general corporate tax rates? (Specify if there is a national versus local distinction).

Currently, the corporate income tax rate is 22%.

Summary of any specific matters, e.g. recent or prospective major legal developments

No imminent major legal developments are expected in 2024.

Slovenian d.o.o. are widely used in international structures.