What is a branch office?
Both domestic and foreign legal entities can establish a branch office in the Republic of Slovenia. A branch office differs from the parent company in that it does not have the status of a legal entity, but it can carry out all the business activities of the parent company, albeit in a geographically separate area. A branch office is entirely capital-dependent on the parent company, meaning the parent company is liable for all obligations arising from the branch office’s operations. Additionally, there is no need for founding (initial) capital for its establishment. Since a branch office cannot exist independently, the cessation of the parent company also means the cessation of the branch office.
Branch Office or Business Unit? 
Unlike a branch office, a business unit (branch, detached unit, etc.) is part of the parent company. As such, it cannot independently conduct business but can perform different or the same activities as part of the parent company. Despite lacking official status, business name, and its own representative, it must be registered in the business register. To obtain the official status of a business unit, it is necessary to adopt a resolution to establish a branch office.
A branch office can be registered at the same or a different business address as the parent company.
What is a Subsidiary?
In the realm of corporate status law, the terms “parent company” and “subsidiary” are often used. These terms refer to a type of affiliated company. Affiliated companies are legally independent forms of companies that are capital or contractually linked in various ways. The key features of affiliated companies are mutual dependence and joint management. Typically, we distinguish between the controlling (parent) company and the dependent (subsidiary) company. Simply put, the relationship between the parent company and the subsidiary arises when the former establishes the latter or buys a capital share (or stock) in another, already existing company. A subsidiary has the status of an independent legal entity, so the parent company is not responsible for its debts. A subsidiary can be related to the “parent” only in terms of capital and strategy, and it can operate in a completely different field than the parent company. This also reduces the liability of the parent company (and its management).
Differences Between a Branch Office and a Subsidiary – Company Registration
The difference in the registration process between a branch office and a subsidiary is that a branch office can only be registered with a notary and entered into the court register. A subsidiary, however, is a capital company, meaning that its registration can also be carried out at a VEM/SPOT point. For a business unit, it is sufficient to be registered in the business register.
