Choosing a business legal form

Sole trading is administratively simplest, but the entrepreneur is liable with all their assets. The trade authorisation is personal to the entrepreneur, although the enterprise or an independent part of it may be sold. A commercial company allows shareholders to be admitted and ownership interests to be sold. An s.r.o. separates business from private assets and permits shareholders and a sale, at the cost of accounting and corporate duties. The dividing line is not income alone; activity risk, liability towards clients and future plans also matter. We weigh precisely these during the consultation.

The j.s.a. is a Slovak form designed for startups, allowing shares with special rights, easier vesting and employee-share arrangements, and more flexible investor entry. The trade-off is stricter formation requirements, including issuing shares through the central securities depository. An s.r.o. is often more practical for ordinary business; a j.s.a. has much to offer for a project built around investors and options.

The form is only half the answer. The other half is the relationship: ownership proportions, decisions and what happens on departure or disagreement. These are addressed in the memorandum of association and shareholders' agreement, and are cheapest to set while you are still on good terms. The recommendation therefore includes a list of matters you need to agree with your co-founder.

Sometimes, if your customers, suppliers or market are there. But the other country's supposed advantage is often overstated: a company should be based where it is actually managed and operates. As lawyers registered with both Bar Associations, we compare the options without preconceptions, including a branch instead of a new company.

Yes. A sole trader can move to an s.r.o., and an s.r.o. can be converted into an a.s. But every change costs time and money, and some things, such as the company's history for banks and public tenders, are difficult to carry across. An hour of thought at the outset costs less than a transformation three years later.