BizCLIR

The Croatian Company Law was adopted in November, 1993 and is based largely on German and Austrian company laws.  It authorizes company formation in all of the traditional European company forms.  The law is considered to be flexible and accommodates the needs of both small and large enterprises. 

The registry portion of the law has been criticized as overly cumbersome and requiring too much detail.  There is concern among some of those who were interviewed that if the company registry process is streamlined and judge involvement is reduced the clerk's role may expand in ways that could be abused because of the degree of discretion that the clerk may exercise.  Care will have to shown in redesigning the registry process. 

A strength of the law is the inclusion of the concept of piercing the corporate veil, which, if used, should give new protection to claimants who are injured by fraudulent corporate actions perpetrated by directors, officers and majority shareholders.  Because many of the Commercial Court judges as well as many practitioners are not familiar with the Company Law, it is not being effectively used;  some judges have refused to utilize provisions in the law because they have no prior experience with this new and alien concept.

Another criticism that was voiced was the lack of the German and Austrian adaptations which have been made over the years through court rulings and practice.  The Commercial Courts and the High Commercial Court have struggled in interpreting and applying this law and subsequent amendments.  Training for both judges and lawyers is needed if the Company Law and other commercial laws are going to be used effectively.