The Serbian companies activities are regulated by the Law on Business Companies published in the Official Gazette of Republic of Serbia. Here are stipulated regulations regarding the legal forms of business, the dissolution and acquisition procedures, the rights of the shareholders etc. According to this, there are two types of accepted legal forms of doing business in Serbia: the companies (private or joint stocks) and partnerships (general or limited). The companies are based on share capital unlike the partnerships. It is mandatory for all the forms of business to register at the Serbian Business Registers Agency. The registration is based on an application that goes along with other relevant documents.
If an investor wants to start a business in Serbia, he/she must be aware of the legal requirements to be met in order to legally perform an economic activity in the country. The main obligations of a business company in Serbia include:
• to provide the necessary technical equipment to its employees;
• to assure a safe working environment;
• to protect and improve the environmental conditions;
• to obtain special permits and licenses for production, trade, distribution, preparation of hazardous or harmful products.
If these conditions are met, a Serbian company can lawfully engage in any commercial activity. If the Companies Act stipulates that specific activities must be done only by a particular type of company, these activities must not be performed in a different business type.
According to the provisions of the Companies Act, any Serbian company is founded through its articles of association drawn by the founders. The articles of associations must be signed by all the founders for a company to be established in Serbia. Depending on the type of company, several other documents must be prepared before incorporating a business. These include the following:
• a partnership agreement among the partners – for the founding of a general partnership or a limited partnership;
• a company agreement among the members in case of a limited liability company in Serbia;
• specific by-laws for the establishment of a joint stock company.
Under the requirements of this law, the founders of a Serbian company are called partners, general or limited partners and shareholders. The existence of a company in Serbia begins with its registration in the business registry. Our Serbian company formation specialists can give you further information about the founding procedures of a company.
The forms of businesses may be reorganized if certain criteria are met. The ways a company may change its status are by:
The merger can be combined with the division or the separation.
A merger can be by formation (when the shares are transferred by the merging companies to a third newly formed one) or by acquisition (when the shares are transferred to one of the parties). The companies are not subject of liquidation in case of a merger.
Just like the merger, the division can be by acquisition or by formation and the difference is that the division may take place between several companies.
The separation may be by acquisition, by formation of one or more companies or by acquisition and formation of one or more companies.
The main difference between separation and division and merger is that the company doesn’t cease to exist after the separation. Only a part of its shares are transferred to another company (already registered or newly formed).
The liquidation process of a company in Serbia is also ruled by the Law on Business Company and can take place only if the affected company has enough assets to pay its debts. If not, the bankruptcy procedures must be adopted. The company may be liquidated if:
- it’s not meeting the conditions of this law,
- hasn’t performed any business activity for more than one year,
- if there is only one partner left in a partnership,
- if the company period stated on the Articles of Association has expired.
The decision must be approved by the majority of the shareholders before it’s put into practice.
First thing a company must do after the decision is taken is to register it in the Business Registers Agency. A copy of this decision must be sent to all the known creditors. After this, the entity must publish the decision at least three times along with a mailing address where the claims can be sent. A claim is not taken under consideration if it’s not sent within 30 days from the announcement. During the liquidation, only the actions related to this are allowed. If not stated otherwise in the Articles of Association, the representative of the company has the authority as liquidator. At the court request, another liquidator may be appointed, if it’s demanded so. The liquidator name must be registered at the Business Serbian Registers Agency.
The balance sheet containing the assets and debts of the company must be delivered to the shareholders, no longer than three months after the decision of liquidation was registered. After paying the company’s debts, a new report with a proposal of distribution for the remaining assets must be approved by the shareholders. This report is prepared by the liquidator.
After finishing the liquidation process, a new report must be submitted in a general meeting and at the Registers along with a request of deleting it from the Business Registers Agency. Also the tax administration must be notified regarding deleting it.