Entrepreneurs deciding to start a business in Slovakia face an important question: is it better to buy a Slovak ready-made company or establish their own Slovak limited liability company (s.r.o.)? Both options have their advantages and disadvantages, and the right decision depends on the entrepreneur's specific needs and goals. In this article, we will look at the key differences between these two options to help you make an informed decision.

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Time Commitment

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• Ready-made s.r.o.: One of the biggest advantages of ready-made companies is the ability to start doing business immediately. A ready-made s.r.o. is already established, registered in the commercial register, and often has an assigned company identification number (IČO) and tax identification number (DIČ). The ownership transfer process is quick, and the new owner can start acting on behalf of the company practically immediately after signing the contract.
• Establishing your own company: Establishing a new s.r.o. requires more time. The entrepreneur must prepare founding documents, obtain necessary approvals and registrations, which can take several weeks. This process also includes submitting a proposal for the company's entry into the commercial register, which can be time-consuming.

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Costs

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• Ready-made s.r.o.: Purchasing a ready-made company can be more financially demanding, as it includes a fee for a pre-established company that has already completed all registration processes. However, this price often also covers services such as legal advice and ownership transfer, which can save the entrepreneur time and hassle.
• Establishing your own company: Establishing your own s.r.o. can be cheaper, especially if the entrepreneur decides to carry out most of the steps themselves. However, this process can be associated with various hidden costs, such as fees for legal services, registrations, and administrative expenses.

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Flexibility and Control

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• Ready-made Ltd.: When purchasing a ready-made company, an entrepreneur has a pre-established structure available, which can be advantageous but also limiting if they have specific requirements for the organizational structure or company name. Most ready-made companies, however, allow changes to the name, registered office, and scope of business.
• Establishing your own company: When establishing their own Ltd., an entrepreneur has full control over all aspects of the company, from its name to its organizational structure. This allows the company to be tailored precisely to their needs and vision.

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Legal and financial history

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• Ready-made Ltd.: Ready-made companies typically have no business history, meaning they are free of debts or liabilities. This offers the entrepreneur a clean slate. However, it is crucial to verify that the company genuinely has no hidden problems.
• Establishing your own company: When establishing their own company, an entrepreneur has the assurance of starting with a brand new entity free of any history. This can be beneficial for building reputation and credibility in the market.

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VAT registration in Slovakia

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• Ready-made Ltd.: One of the main advantages of ready-made companies is that many are already registered as VAT payers. This means an entrepreneur can immediately start invoicing and simultaneously reclaim VAT on the purchase of goods and services. This can bring immediate financial benefits and significantly save time that would otherwise be spent waiting for their own company's VAT registration. This is particularly advantageous for entrepreneurs who plan to make significant purchases or wish to respond quickly to business opportunities.
• Establishing your own company: When establishing their own company, an entrepreneur must apply for VAT registration, which can take several weeks. During this period, it is not possible to reclaim VAT on purchases, which can lead to increased costs at the start of the business.

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Registered Capital

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• Ready-made s.r.o.: A ready-made company already has its registered capital of €5,000 paid up, which immediately allows the entrepreneur to start doing business without the need to deposit funds for this purpose. This means the new owner doesn't have to deal with complex and time-consuming tasks associated with paying up the registered capital. This benefit is particularly advantageous for those who want to immediately seize business opportunities and invest capital directly into business development.
• Establishing your own company: When establishing a new company, the entrepreneur must ensure the registered capital is paid up, which is essential for setting up an s.r.o. This process can involve bank deposits and takes time for these funds to be verified and registered in the commercial register.

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Quick access to business opportunities

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• Ready-made s.r.o.: An entrepreneur who buys a ready-made company can immediately start doing business and take advantage of business opportunities. This is particularly advantageous if there's a need to quickly respond to market demand or participate in public tenders and contracts.
• Establishing your own company: This process can be slower, which might mean the entrepreneur misses out on some business opportunities. If speed is crucial, a ready-made company can be a better choice.

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Bank Accounts

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• Slovak Ready-made s.r.o.: A ready-made company may already have an open bank account, which simplifies the start of financial operations. Furthermore, if the company is VAT registered, the entrepreneur can immediately begin invoicing without waiting for registration.
• Establishing your own company in Slovakia: Opening a bank account and VAT registration are additional steps that can delay the start of your business. This process can be time-consuming and involve extra administrative tasks.

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The decision between purchasing a ready-made LLC and establishing your own company depends on the entrepreneur's individual needs and goals. A ready-made company offers a quick start and less administration, which is ideal for those who want to begin business immediately. On the other hand, establishing your own company provides greater flexibility and control over all aspects of the business. Before deciding, it's important to consider all the advantages and disadvantages of both options and choose the one that best aligns with your business ambitions.

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