Share capital in the court registry and the introduction of the EURO

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Procedure for adjusting the share capital in the court register due to the introduction of the euro

When it comes to capital companies, which, of course, include joint-stock companies (d.d.) and limited liability companies (d.o.o.), it is necessary to point out that it is stipulated that d.d.s are obliged to recalculate the existing amount of the share capital and its parts that are attributable to shares by applying a fixed conversion rate from the kuna to the euro, with rounding to the nearest cent, in accordance with the rules for conversion and rounding from the Act on the introduction of the euro, whereby the joint-stock companies must at the same time harmonize the amount obtained in this way with the requirements and in the manner regulated by the regulation the establishment of commercial companies is regulated[3] (Art. 65, Paragraph 2 of the Law on the Introduction of the Euro).

In the same way, d.o.o. is obliged to recalculate the existing amount of the share capital and its parts attributable to business shares by applying a fixed conversion rate from kuna to euro, with rounding to the nearest cent, in accordance with the rules for recalculation and rounding from the Act on the introduction of the euro , whereby the limited liability companies are simultaneously obliged to match the amount obtained in this way with the requirements and in the manner regulated by the ZTD (Article 65, paragraph 3 of the Act on the introduction of the euro).

In addition, we note that all financial obligations based on business shares (as parts of the d.o.o.’s share capital), due on or after the date of the introduction of the euro, which were denominated in kuna, are settled in euros in accordance with fixed conversion rate.

It is also important to point out that the adjustment must include the share capital and all business shares of d.o.o. Of course, the adjustment must include the share capital and all shares of d.d., whereby in the adjustment procedure it is allowed to exchange shares with a nominal amount for those without this amount and vice versa.

STEPS IN THE COMPLIANCE PROCEDURE
THE FIRST STEP

The first step in the subject adjustment is to make a decision on the adjustment of the share capital and business shares within the deadline specified in the next chapter of this article, namely:

a) by increasing the share capital or
b) by reducing the share capital.

It is important to state that this decision of the assembly of the limited liability company must be in the form of a notarial document, which simply means, in the form of a notarial act or solemnized document.

When recalculating the existing amount of share capital and its parts attributable to business shares, the fixed kuna to euro conversion rate (1 euro = HRK 7.53450).

With the decision on the adjustment of the amount of the share capital to the amount of business shares obtained by the aforementioned conversion and rounding, d.o.o. will increase or decrease the share capital to the extent that it is necessary to bring the share capital and nominal amounts of business shares into line with the provisions of ZiDZTD (minimum share capital of d.o.o. instead of HRK 20,000.00 c 2,500.00 euros; minimum sum business share instead of HRK 200.00 and EUR 10.00).

SECOND STEP

Next, it is necessary to make a decision on the amendment of the social contract, that is, the statement of incorporation. For a d.o.o. that has one member of the company (in colloquial terms, the owner), the basic organizational act is the declaration of establishment, while for a d.o.o. that has two or more members, the basic organizational act is a social contract.

This decision changes the provisions on:

d.o.o.’s share capital amounts
the minimum amount of business shares
to the number of votes belonging to the business share, if the right to vote is determined by sums of money in kuna
the amount of reserves that d.o.o. must have, if the amount of these reserves is determined by the social contract or the statement of incorporation
values of other sums expressed in kuna.
This decision is made by a simple majority of votes and must be in the form of a notarial document.

THIRD STEP

Then it is necessary to submit an application for registration of the adjustment in the court register and make sure that it is done within the legal deadline and that costs required by this adjustment are paid .The aforementioned application is drawn up and certified by a notary public, in accordance with the regulations of the notary public service that regulate it. Of course, the application with the necessary attachments is forwarded to the court register, which then issues a decision on the registration of the adjustment in the court register.

FOURTH STEP

After the adjustment has been entered in the court register, it is necessary to enter the changes in the amount of share capital and the amount of business shares in the business books and other documentation of the company, and to change the amounts in question from kuna to euros on business papers (letters, invoices, orders, offers, etc. ) and on the company’s website.

DEADLINES FOR COMPLIANCE

Limited liability companies are obliged to harmonize the sums of the share capital and the parts of that capital relating to individual business shares with the stated rules upon the first change of share capital, i.e. merger or division of business shares, but no later than three years from the date of introduction of the euro.

J.d.o.o.’s, as well as d.o.o.’s, should carry out the adjustment during the first change of share capital, i.e. merger or division of business shares, and no later than December 31, 2025.

CONCLUSION

If there would be changes in the company, together with those changes/ made at public notary office it will be necessary also to change all documents to comply with EURO/ HRK conversion. In case it won’t be any changes in the company, it is necessary to visit public notary office and change all amount in HRK to EUR in the company acts, not later than 3 years from date of introduction EURO – meaning latest by the 31.12.2025.

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