Conversion of a sole proprietorship into a limited liability company based on case X

Accounting & Finance

Študent: Lidija Goričan

Lidija Goričan is a graduate of the Economics - Accounting module study programme at Academia, College of Short-Cycle Higher Education. She successfully defended her thesis paper in March 2023.


Diploma paper Lidija Goričan

The diploma thesis entitled ” Conversion of a sole proprietorship into a limited liability company based on case X” deals with the legislation, general facts and knowledge about the legal organizational forms of an independent entrepreneur and a limited liability company.

The differences between the two forms of the company are clearly presented, on the basis of which the entrepreneur decides which form is more favorable for him.

Legal organizational form s.p. is the one that most entrepreneurs decide on at the beginning of their career path, as it brings advantages, such as the fact that initial capital is not required and that lower profits are taxed lower according to the income tax scale, which is more profitable for the entrepreneur with lower business incomes.

For entrepreneurs whose income does not exceed 50 thousand euros (or 100 thousand in exceptional cases) per year, it is considered that they can only keep records of income, on the basis of which they are assessed a standardized amount of expenses in the amount of 20 percent, and they pay a 20 percent tax on this amount profit tax.

Even the form of a limited liability company has its advantages, such as the fact that the partner is not responsible for the company’s obligations with his personal assets, and a lower tax rate in case of high profits. d.o.o. also has greater credibility in the market.

When a company decides to transform, whether due to an increase in the volume of operations, tax benefits, retirement, the desire to obtain funds for investments or others, it makes sense to examine all options and, based on calculations, determine what is a better option for the company.

In the task, a simulation of the balance sheet and the profit and loss statement for the selected company for the past year is carried out for both s.p. as for d.o.o. We presented our proposal critically and justified it with findings based on theoretical starting points.

We have described the process of company transformation and the legislation that must be taken into account. In connection with the company’s operations, we also highlighted the current issue of unforeseen events, such as the pandemic and war, which affect the economy.

We proposed the way in which the company would best adapt to the rapid changes in the market and respond most flexibly to what is happening.


Diploma paper Lidija Goričan


Diploma paper Lidija Goričan

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