Employee Profit-Sharing Under the New Regime: What Does ZUDDob-1 Mean for Corporate Law?
The new Employee Profit-Sharing Act (hereinafter: ZUDDob-1),[1] which began to apply on 11 March 2026, affects not only the tax sphere, but also corporate law. Although the key legislative changes are primarily linked to the amended tax treatment of this institute, the act also expressly regulates certain relationships that are otherwise governed by the Companies Act (hereinafter: ZGD-1).[2]
Like the previous act, ZUDDob-1 continues to provide for both the cash scheme and the share scheme, so the basic concept of employee participation in profits is not entirely new. The main novelty of the new regime lies in the broader range of possible forms of employee participation and in the more precise regulation of certain issues that overlap with the corporate law rules applicable to companies. This is most evident in the case of limited liability companies, as the new act, in addition to the existing solutions, expressly introduces for the possibility of employee participation in the ownership of the company through business shares. The previous Employee Profit-Sharing Act (hereinafter: ZUDDob)[3] provided only for the cash scheme and the share scheme, whereas ZUDDob-1 introduces an additional option that directly affects membership in a limited liability company, the structure of its shareholders, and the transfer of business shares.
For limited liability companies, it is particularly important that ZUDDob-1 also introduces certain specific corporate law rules that deviate from the general rules provided under ZGD-1. Thus, under an equity participation scheme, an employee may acquire only an independent business share, and not a share jointly held by several shareholders, even though this is otherwise permitted under Article 480 of ZGD-1. Such a rule prevents organisational complications and ensures clarity as regards the corporate rights attached to each individual employee’s share. At the same time, ZUDDob-1 does not alter Article 473 of ZGD-1, which limits the number of shareholders in a limited liability company to a maximum of 50. Accordingly, if the employee equity participation scheme would cause the company to exceed the maximum permitted number of shareholders, the required approval under Article 473 of ZGD-1 must be obtained. ZUDDob-1 also introduces a special rule regarding the transfer of such acquired business shares, by granting the company a right of first refusal that prevails over the shareholders’ right of first refusal under Article 481(4) of ZGD-1, pursuant to which shareholders, unless the articles of association provide otherwise, have priority over third parties in acquiring a business share on equal terms.
Another important aspect of the new regime is that it is not limited to a purely contractual model. If an employee profit-sharing agreement is not concluded within 45 days of the initiative being made, the company’s general meeting may, at the initiative of employees, management or a shareholder, itself adopt a resolution on employee profit-sharing, based on which management then prepares a profit distribution plan for employees. In this way, ZUDDob-1 places the issue of employee profit-sharing more firmly within the sphere of general meeting decision-making and makes it possible to establish the arrangement even in the absence of a concluded agreement, provided that the necessary support exists at the level of the general meeting. Since ZUDDob-1 does not specify the majority required for the adoption of such a resolution, a simple majority of the votes cast should suffice under Article 307 or Article 510 of ZGD-1, as applicable.
Unlike in the case of limited liability companies, the new act does not introduce the share scheme as a novelty for joint-stock companies, since that scheme was already provided for under ZUDDob. The new regime, however, addresses more expressly the legal consequences of implementing such a scheme in relation to ZGD-1. ZUDDob-1 provides that, where the share scheme is implemented through an increase in share capital, existing shareholders do not have pre-emptive rights to subscribe for the new shares issued for that purpose. This again constitutes an express exception to the general rule laid down in Article 337 of ZGD-1, under which existing shareholders generally have pre-emptive rights in the event of a share capital increase, although such rights may be excluded where the relevant substantive and procedural requirements are met.
The new act will likely attract most attention because of the amended tax treatment of employee profit-sharing. Nevertheless, it also has important implications for corporate law, as it expressly provides for certain exceptions to the general framework under ZGD-1 to facilitate the more effective implementation of employee profit-sharing. In any event, the new regime will be particularly relevant for companies wishing to allocate part of their profits to employees not merely as a reward for business performance, but also as an instrument for fostering their longer-term alignment with the company’s success.
[1] Official Gazette of the Republic of Slovenia, No. 14/26.
[2] Official Gazette of the Republic of Slovenia, No.65/09 – official consolidated text, 33/11, 91/11, 100/11 - Dec. US, 32/12, 57/12, 44/13 - Dec. US, 82/13, 55/15, 15/17, 22/19 - ZPosS, 158/20 - ZIntPK-C, 175/20 - ZIUOPDVE, 18/21, 18/23 - ZDU-1O, 75/23, 102/24, 77/25, 85/25 - ZLZD, 10/26 - ZdZEETD, 14/26 - ZUDDob-1.
[3] Official Gazette of the Republic of Slovenia, No. 25/08.