Private limited liability company (UAB)
A private limited liability company (UAB) is a private legal entity with limited liability. This means that shareholders are not liable with their assets for the unfulfilled obligations of the UAB. The authorized capital of a UAB must be at least 1,000 EUR. A UAB can be established by one or more natural persons and/or legal entities, and the number of shareholders is not limited.
Advantages:
- In the event of a business failure, the shareholder risks only the assets he has contributed to the UAB, thus protecting his personal assets;
- In order to attract additional funds, UAB may issue new shares, upon the acquisition of which the shareholders pay a certain amount of money;
- Opportunity to leave the business by transferring the shares of UAB to other persons or selling the business;
- UAB tax benefits: if the average number of employees does not exceed 10 people and the income for the tax period does not exceed EUR 300,000 can be applied 5% income tax rate instead of the usual 15%. tariff.
Disadvantages:
- When establishing a UAB, it is obligatory to contribute at least 1 000 EUR to the authorized capital;
- Shareholders can pay out the profit earned by UAB only through dividends (if UAB works profitably) or by receiving a salary, in which case high taxes will have to be paid.