¹ See e.g., Siniša, Petrović, “PoduzetniPetrovički ugovori kao sredstvo sanacije”, in: MoguPetrovići oblici financiranja i preustroja trgovaPetrovičkog društva (materijali savjetovanja) (Zagreb 1999) 46.Google Scholar

² Jakša, Barbić, “Voðdenje poslova i upravljanje u trgovačkim društvima (povezana društva)”, 46 Hrvatska gospodarska revija (1996) No. 11, 1574–1582Google Scholar; Vilim, Gorenc, “Povezana društva prema Zakonu o trgovačkim duštvima”, 4 Račcunovodstvo, revizija ifinancije (1994) No. 10, 1786–1797Google Scholar; Dragutin, Ledić, “Povezana društva – začetak hrvatskog prava koncerna”, 16 Zbornik Pravnog fakulteta Sveučilišta u Rijeci (1995) No. 1, 37–51Google Scholar; Siniša, Petrović, Ugovor o voðenju poslova trgovačkog društva (Master thesis, Zagreb 1994)Google Scholar; Siniša, Petrović, “Povezana društva”, in: Jakša, Barbie et al. (eds.), Zakon o trgovačkim društvima, II. dio, Vodič za èitanje Zakona, 2nd edition (Zagreb 1995) 297–316Google Scholar; Siniša, Petrović, “Povezana društva I”, Informator No. 4305, 10 06 1995, at pp. 6–7Google Scholar; Siniša, Petrović, “Povezana društva II”, informator No. 4306, 14 06 1995, at pp. 10–11Google Scholar; Siniša, Petrović, “Poduzetnički ugovori”, Informator No. 4314-4315, at p. 12, and 1507 1995, pp. 1–11Google Scholar. See also commentary to Arts. 473-511 of the Law on Commercial Companies by Vladimir Filipović, in: Vladimir, Filipović/Vilim, Gorenc/Zvonimir, Slakoper, Zakon o trgovačkim društvima s komentarom, 2nd ed. (Zagreb 1996) 686–784.Google Scholar

³ Zakon o trgovačkim društvima, Official Gazette of the Republic of Croatia No. 111/1993, 34/1999, 121/1999, 52/2000 (decision of the Constitutional Court).

⁴ Before the entry into force of the LCC, the relevant law was the Law on Enterprises (Zakon o poduzećima, Official Gazzette of the Republic of Croatia No. 53/1991, 58/1993), which had been adopted by Croatian law from the legislation of the former Yugoslavia. It is interesting to note that this law contained the origins ofthe regulation of company groups. Art. 145b provided for the formation of “holding enterprises”. In this respect, it is important to stress that the notion of “enterprise” in the Law on Enterprises was understood to mean any legal entity performing business activities. The modern meaning of that notion, as accepted by the LCC, is different and reflects the meaning ofthe term Unternehmen in German corporate law.

⁵ Concerning the regulation of commercial companies in general it should be stressed that, shortly after the declaration of Croatian independence, the government decided to follow the basic principles and ideas of German law. The reasons for this decision were twofold. First, it was logical to take as a model the law of a country with a civil law tradition, since Croatia has always been a part of this tradition and the introduction of common law legal institutions in the regulation of companies would obviously not have been appropriate. Second, bearing in mind that German law has played an important role in regulating company law in the European Union, the drafters of the LCC thought it best to closely monitor changes in German law and mutatis mutandis to accept those changes and introduce them into Croatian law. See Jakša, Barbić, “Zakon o trgovačkim društvima”, in: Zakon o trgovačkim društvima s pratećim propisima, uvodnim objašnjenjima i stvamim kazalom, 2nd ed. (Zagreb 1995) 42–44Google Scholar. For the present status of the harmonization of Croatian company law with company law in the EU see the table in Action Plan for European Integration, prepared by the Office of European Integration of the Government of the Republic of Croatia, at pp. 262-267.

Although the LCC in general, and especially its provisions on other commercial companies, are modeled on German law, it must be mentioned that its rules on limited liability companies (Gesellschaft mit beschränkter Haftung) are greatly influenced by Austrian law.

⁶ See Barbić, supra n. 5, at p. 55.

⁷ Zakon o računovodstvu, Official Gazzette of the Republic of Croatia No. 90/1992.

⁸ Zakon o postupku preuzimanja dioničkih društava, Official Gazzette of the Republic of Croatia No. 124/1997.

⁹ Zakon o zaštiti tr išnog natjecanja, Official Gazzette of the Republic of Croatia No. 48/1995, 52/1997, 89/1998.

¹⁰ Zakon o bankama, Official Gazzette of the Republic of Croatia No. 161/1998.

¹¹ E.g., the Croatian National Bank may refuse to grant approval to a bank's business operations if affiliations among the shareholders of the bank or affiliations of the bank with other companies indicate that conditions for independent and autonomous management of the bank and for stable and secure carrying out of its business activities do not exist (Art. 8 of the Banking Act); special rules, including the obligation to obtain approval from the Croatian National Bank, apply to acquisitions of more than 10% of a bank's shares by any person as well as for acquisitions by a bank of more than 10% of the shares in other banks or in other companies (Arts. 27 and 28 of the Banking Act).

¹² Zakon o izdavanju i prometu vrijednosnim papirima, Official Gazzette of the Republic of Croatia No. 107/1995, 142/1998.

¹³ Zakon o investicijskim fondovima, Official Gazzette of the Republic of Croatia No. 107/1995.

¹⁴ Zakon o pretvorbi društvenih poduzeća, Official Gazzette of the Republic of Croatia No. 19/1991, 45/1992, 83/1992, 16/1993, 94/1993, 2/1994, 9/1995, 21/1996, 118/1999 (decision of the Constitutional Court).

¹³ The organization, duties and obligations of the Croatian Privatization Fund are primarily provided for in the Law on the Croatian Privatization Fund (Zakon o Hrvatskom fondu za privatizaciju, Official Gazzette of the Republic of Croatia No. 84/1992, 70/1993, 76/1993, 52/1994, 87/1996). The precise tasks of the Croatian Privatization Fund have been established following the amendments to the Law on the Transformation of Socially-Owned Enterprises and the enactment of the Law on Privatization. However, it may be stated that the Fund has always been the main state body entrusted with the duty of carrying out the privatization process and of exercising the state's shareholder rights in commercial companies in which the state has been a shareholder.

¹⁶ Zakon o privatizaciji, Official Gazzette of the Republic of Croatia No. 21/1996, 71/1997, 73/2000. Currently the new Privatization Act is being prepared.

¹⁷ It must be noted, however, that commercial companies in some economic sectors (e.g., the oil industry, electricity, railways, post and telecommunications) have been explicitly excluded from the scope of the Law on Privatization. Their privatization is to be subject to special laws.

¹⁸ For more thereon, see infra.

¹⁹ Art. 473 of the LCC.

²⁰ Art. 474 of the LCC.

²¹ Art. 475 of the LCC.

²² The Croatian term in the LCC for a group of companies is koncern and this has been taken from German law.

²³ For control agreements and the integration of companies see infra.

²⁴ Art. 476 para. 1 of the LCC.

²⁵ Art. 476 para. 2 of the LCC.

²⁶ According to Art. 611 para. 1 of the LCC a commercial company is deemed to have the nationality of the country in which it is duly organized and in which it has its registered seat. Therefore, it may be concluded that for commercial companies in Croatia the theory of the registered seat applies.

²⁷ Art. 477 of the LCC.

²⁸ It must be emphasized that for companies with cross-shareholdings special rules apply which limit the exercise of their rights arising from holding shares in each other (Art. 511 of the LCC).

²⁹ The provisions of the LCC on companies with cross-shareholdings should, however, be analyzed together with the rules restricting the possibility of a company acquiring its own shares (Art. 233 et seq. of the LCC for marketable share companies). Hence, it is not entirely clear how it would be possible to encounter a situation of cross-shareholdings between companies in excess of, generally speaking, 10% of the shares, since that is the upper limit prescribed by the LCC for holding treasury shares. This question is open to discussion.

³⁰ E.g., these are the rules which prescribe the principal duty of the shareholders, that is to make contributions of at least the par value of shares, as well as the consequences of not abiding by that duty (Art. 212 et seq. of the LCC for marketable share companies and Art. 398 et seq. for limited liability companies); rules prohibiting repayment to the shareholders of the invested capital and the payment of interest on the investments made (Art. 217 of the LCC for marketable share companies and Art. 406 of the LCC for limited liability companies); as well as the aforementioned rules limiting the acquisition by a company of its own shares (Art. 233 et seq. for marketable share companies and Art. 418 of the LCC for limited liability companies).

³¹ Art. 487 et seq. of the LCC.

³² Art. 493 et seq. of the LCC.

³³ See Art. 10 para. 3 of the LCC.

³⁴ Art. 503 of the LCC.

³⁵ Art. 504 of the LCC.

³⁶ Art. 478 of the LCC.

³⁷ It is important to emphasize that the Takeover Law applies to all marketable share companies having their seat in Croatia and that there is no difference between marketable share companies whose shares are traded on a stock exchange and those whose shares are not. Nor is that distinction explicitly provided under the Law on the Issuance of and Transactions in Securities.

³⁸ There are exceptions to the general obligation to make a tender offer (Arts. 4 and 5 of the Takeover Law). Inter alia, the Takeover Law does not generally apply to the Croatian Privatization Fund. That solution does not seem to be appropriate, as it gives the state, even when acting hire gestionis, an unnecessary advantage in respect to other persons. Similar critical remarks have already been made concerning the exclusion of the state from the application of the provisions of the LCC on company groups. More thoroughly thereon see supra.

³⁹ Art. 3. paras. 1 and 2 of the Takeover Law.

⁴⁰ Art. 6. of the Takeover Law.

⁴¹ In addition to that, the significance of some other rules contained in the Takeover Law is doubtful, e.g., those regulating the role of the management board and the supervisory board of the target company, the above-mentioned rule excluding the Croatian Privatization Fund from the application of the Law, the rule regulating the point of time at which the obligation to make a tender offer arises, etc. More thoroughly thereon see Siniša, Petrović, “Preuzimanje dioničkog društva”, 49 Zbornik Pravnog fakulteta u Zagrebu (1999) 37Google Scholar; Boris, Porobija, “Zakon o postupku preuzimanja dioničkih društava – neke temeljne nedoumice”, 37 Pravo u gospodarstvu (1998) 510.Google Scholar

⁴² The notion of an “undertaking” within Competition Law is broader than the notion of a “commercial company” and includes any person who by performing business activities takes part in the transfer of goods and services (Art. 2 of the Competition Law).

⁴³ Art. 21 para. 2 of the Competition Law.

⁴⁴ Art. 21 para. 1 of the Competition Law.

⁴⁵ For a more detailed elaboration of the issue see Siniša, Petrović, “Okrupnjavanje gospodarskih subjekata i tr išno natjecanje”, 38 Pravo u gospodarstvu (1999) No. 4, 625–630Google Scholar. See also Deša, Mlikotin-Tomić, “Uvod u primjenu Zakona o zaštiti tr išnog natjecanja – koncentracije (Dio treći)”, 41 Računovodstvo ifinancije (1995) No. 12, 116.Google Scholar

⁴⁶ It should be emphasized that, according to Art. 15. of the Law on Accounting, the International Accounting Standards are applied in Croatia. Together with the relevant laws they form the inseparable accounting regulation.

⁴⁷ Art. 24 of the Law on Accountancy.

⁴⁸ The Law on Accountancy unfortunately incorrectly refers to the subsidiary as a branch office. In spite of this inappropriate term mentioned in the law, its application has in practice not resulted in any problems concerning the consolidated financial reports of company groups.

⁴⁹ Art. 25 of the Law on Accountancy.

⁵⁰ In the given context, the notion of the formation of company groups is to be understood along the lines of the German term Konzembildungskontrolle.