THE INTRODUCTION OF A SIMPLIFIED LIMITED LIABILITY COMPANY IN THE MACEDONIAN LEGISLATION – A VALID ATTEMPT FOR FOSTERING ENTREPRENEURSHIP OR JUST ANOTHER INSIGNIFICANT REASON FOR THE AMENDMENT OF THE COMPANY LAW ACT?

Abstract

In the past decade, there has been an ongoing trend, primarily among the EU member states, to decrease the legally required minimum capital for the establishment of limited liability companies. This was the effect of the introduction of the “1 GBP company” in the UK which resulted in the outflow of companies from other member states. Shareholders decided to set up companies in the UK instead of their home jurisdictions to take advantage of the lesser capital requirements. This was also possible due to the principle of freedom of establishment within the EU. However, with Brexit in full force, it remains to be seen whether some member states would reiterate from this practice. In the Republic of North Macedonia, the initiative for such amendment of the Company law act by the Government was launched in 2020. In September 2021 the proposal was finally adopted, resulting in the introduction of a new variant of the limited liability company – the so-called “simplified limited liability company” – a limited liability company with a minimum paid-in capital of 1 EUR. From its adoption in 2004 to this date, the Company law act has been amended more than 30 times, making it one of the most often changed legislative texts. A number of these amendments were controversial and even resulted in initiatives in front of the constitutional court for their abolishment. The paper aims to analyze the effect of the introduction of the simplified limited liability company in Macedonian legislation from a legal point of view. The analysis is focused primarily on the necessity, legal status, and effect of these forms of companies in comparison to the other forms of trade companies provided within the Macedonian Company law act. The analysis is conducted primarily through the use of the normative and comparative approach.