Natural and Legal Persons in Croatia: Some Distinctions

In Croatian bureaucracy, the phrases “fizika osoba” (natural person) and “pravna osoba” (legal person) are frequently used.  In this article, we will try to differentiate the two terms from each other.

A fizika osoba (natural person) is a human being with rights and responsibilities. A natural person is somebody alive. After birth, an individual becomes a natural person and gains legal competence. On the day of death or after being proclaimed deceased as a missing person, a natural person ceases to exist.

A pravna osoba (legal person) is a group of natural persons or property formed for a specific legal purpose. A legal person, such as a corporation or foundation, is a social creation having legal capacity. When launching, it gains legal capability, and when closing, loses it.

Natural and legal persons are participants in mandatory connections. Mandatory relationships between them can be created, modified, or ended by taking certain legal actions. These relationships can also be the results of other consequential legal events.

There are some distinctions between natural and legal persons about business capability. The legal person has no limit to business activity due to age. Whereas, the natural person can have limits due to their age. They can have:

Full legal capacity – acquired when a person turns 18 years of age or in the exception of minors if they get married;
Limited legal capacity – In cases when natural persons can perform businesses only under certain assumptions;
Completely incapable of business – Minors under the age of 18.

In Croatia, it is possible to start a business in a form of a natural or legal person.

Natural persons are:
Trade business (obrt);
Flat-rate trade business (paušalni obrt);
Family farm (OPG);
Self-employment (samostalna djelatnost).

Legal persons are:
Non-profit organization (udruga).

Natural and legal persons are responsible for commitments with their property. Their rights are separated and everyone is responsible for their debts or obligations.