Limited Liability Company

A limited liability company belongs to the commercial companies defined in Section 56 of the Commercial Code. Its basic feature is its separate legal personality in the form of a legal person. The company is responsible for the liabilities with all its assets, with the partners guaranteeing the company's liabilities only up to the amount of outstanding deposits. A legal entity as a separate legal entity has its business name - name, registered office and statutory body acting on its behalf. The establishment of a legal person requires a written agreement or a founding charter, which must also define the very purpose of establishing that legal person.

Business companies are among legal entities. The Business Code defines a business entity as a legal entity established for business purposes. We include the following companies among the companies:

  • public company,
  • a limited partnership,
  • limited liability company and
  • joint stock company.

Each of these companies has distinct legal personality that separates the company as a separate legal entity from the individual founding members. Thus, the company has the capacity for rights and obligations, on the one hand, and legal capacity on the other. Individual types of companies have different ownership responsibilities for the company's liabilities. On this basis, we distinguish between capital and personal partnerships.

A limited liability company is considered a capital company. The capital nature consists of the capital, which is compulsorily constituted from the contributions of the partners. The affiliates do not ruin the creditors personally and unlimitedly, but only up to the amount of their deposits. However, a limited liability company also has elements of a personal company, which consist in the liability of a member and in the terms of dealing with the shareholder's share.

Characteristic features of a limited liability company include limited liability. The company is liable to the creditors for its liabilities with all its assets, but the partners pay for the company's liabilities only up to the amount of their unpaid deposits entered in the business register. As a result, the shareholder does not belong to the company only, but if he does not pay the subscribed capital contribution, the amount of the unpaid portion of the deposit is the guarantor to the creditors of the company for its liabilities.

The Commercial Code allows the establishment of a business company for business purposes. On the other hand, a limited liability company as well as a limited liability company, as opposed to other types of companies, may also be based on a purpose other than business, unless specifically prohibited by law. The concept of the company's purpose is different from that of the company's business. The subject of business is to be understood as a concrete implementation activity, which is aimed at achieving the purpose of the company. The purpose of a limited liability company is therefore not just business.

Every Limited Liability Company is characterized by its unique business name. The separate legal personality of a company requires that a company, as a separate legal entity, acts in all legal relationships only under a specific business name. The business name is defined by the provision of Section 8 of the Commercial Code as the name under which the entrepreneur carries out legal acts in his business activities. The business name must not be interchangeable with another business name and must not create a deceptive idea of ​​the entrepreneur or the subject of his business. The new business name must therefore be different from the existing business name. In the case of a limited liability company, the business name must include an addendum identifying the legal form as a "spoločnosť s ručením obmedzeným" or one of the "spol. s r. o." or "s.r.o.".