Abstract

The article analyzes the issue of an advance refund towards an expected dividend in a limited liability company (art. 194–195 of the Commercial Companies Code). The crucial doubts regard determination of the subject matter of art. 195 § 1¹ of the Commercial Com-panies Code, ergo, the concept of profit and loss, and when an advance refund should occur in situations provided for in art. 195 § 1¹ of the Commercial Companies Code. Doubts are also raised by the legitimacy regarding the lawmaker referring to profit and loss, in art. 195 § 1¹ of the Commercial Companies Code, as an indication of the obligation to refund an advance. In this regard, the author opts for understanding profit and loss as a net profit and loss. Simultaneously, he questions the legitimacy of the lawmaker referring to the sug-gested values as an indicator of a necessity for an advance refund. The author believes that the authoritative moment for the assessment of suffered losses or a level of profit gained by a company is the moment of the approval of the financial statement. Subsequently, the author analyses the necessity of an advance refund when a company gained profit which was at least equal to the amount of withdrawn advances, however, there was no dividend withdrawal because of allocation of the profit to other purposes. Therefore, the crucial part of the analysis is the assessment of whether a company may demand an advance refund also when it gained profit that was at least equal to withdrawn advances, but the partners did not pass a resolution regarding dividend withdrawal. The author discusses competing positions of the doctrine and opts for the approach that excludes the possibility of a demand of an advance refund by a company, and that the advance was withdrawn legitimately and within authorization stipulated in the partnership agreement. However, the author does not exclude the possibility to clarify the conditions of an advance withdrawal and refund in the partnership agreement regarding the analyzed situation.