SMP

TAKE A SEAT

Croatia

Typical legal form for start-ups

društvos ograničenom odgovornošću (d.o.o.)

Brief information

The d.o.o. is the most common legal form for Croatian start-ups. It has the advantages of limited liability and a low minimum share capital of approximately EUR 2,700 (HRK 20,000).

If the d.o.o. has a Supervisory Board, an investor may participate in this.

One or more directors manage the d.o.o. As a supervisory body, a Supervisory Board may be established by the articles of association. The establishment of a supervisory body is in principle voluntary and only mandatory if certain key figures (number of employees, turnover, regulated area of activity) are exceeded.

Other legal form

dionicko društvo (d.d.)

Brief information

A conversion to a d.d. is carried out for the purpose of an IPO or at the request of investors and offers advantages with comprehensive shareholder structures and the possibility of a dualistic governance structure.

A PE/VC Fund may accept a seat on the Supervisory Board in a dualistic structure.
In a monistically structured d.d., participation in the Board of Directors is not permitted. An observer seat by contract cannot be set up.

Croatian law recognises both the monistic system with a Board of Directors and the dualistic system with a Management Board and a Supervisory Board. The Supervisory Board monitors the Management Board. It does not perform management duties. You can choose freely between the systems.

In principle, persons who are not members of the Board of Directors may not attend meetings. A contractual observer seat status is therefore not possible.

As in the d.o.o., a PE/VC Fund may accept a seat on the Supervisory Board in a dualistic structure for this body does not perform any management duties.
In a monistically structured d.d., participation in the Board of Directors is not permitted. An observer seat by contract cannot be set up.

The information in our toolbox provides managers of private equity or venture capital funds with an initial overview of certain framework conditions in the respective country. It does not provide advice on the law of any country, neither does it substitute such advice. Before taking over a board seat in a portfolio company, it is at all times necessary to seek expert advice. Our team is happy to assist you with all questions at any time.

In collaboration with: DTB Divjak Topic Bahtijarevic

Sources: Wegen/Spahlinger/Barth, Gesellschaftsrecht des Auslands 2. EL Januar 2018