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Novelties In The Field Of Company Law In Serbia

What are the obligations for registering a company law in Serbia? In this article, we will detail the new novelties in the field of company law in Serbia.

On 17 November 2021 the National Assembly of the Republic of Serbia adopted the Law on Amendments to the Companies Act (Official Gazette of the Republic of Serbia no. 109/2021) thereby implementing significant changes.

Contents

So far we have assisted over 400 companies.

Registered Data

It will be required to register the information on gender of the natural persons that are registered in the relevant registry within Business Register Agency.

Registered Seat

As the very first thing, the amendments stipulate that the company’s seat is the place and address in Serbia from which the company’s business is managed and which is designated as such in the articles of incorporation, articles of association, or decision of the member’s meeting. Before these amendments came into power, the premises owner’s consent was not required for them to be registered as the company’s seat. As a result, there were many fictitious registered seats. Therefore, it is now envisaged that the interested person can file a lawsuit with the competent court requesting the deletion of the registered address of the company’s seat if the owner of the premises in question did not allow them to be used that way.

Registration On The E-Government Website

In addition to the already existing mandatory registration of e-mail addresses, from now on a company must be registered on the e-government portal for reasons of compliance with the Electronic Government Law. The Law stipulates that a public administration is obliged to deliver an act in the form of an electronic document to a party electronically and perform electronic delivery to a user of electronic administration services in a Single Electronic Inbox unless a special law provides for a different way of submitting documents. Furthermore, the Art. 15 of the Law prescribes that citizens and legal entities may use e-government services if they register as users of e-government services, after which they are provided with the use of the Single Electronic Inbox.

Compulsory Liquidation Of The Entrepreneur 

The novelty also refers to the regulation of the compulsory liquidation of the entrepreneur, where the cases in which the entrepreneur ceases to perform activities by force of law are specified. Namely, that is the case of revocation, i.e. termination of a permit, license, approval, consent, etc. prescribed as a condition for registration or a case when the final court decision rules the entrepreneur’s register seatto be deleted, and the entrepreneur does not register a new address within 30 days from the final court decision.

Nevertheless, the entrepreneur is allowed to avoid deletion from the register if he registers the termination of the registered activity within the prescribed period during which the measure is being imposed, registers a change of registered activity, or deregisters the activity when the measure of prohibition to perform the registered activity is imposed. The entrepreneur may also register the change of registered activity or deregister the activity in case of revocation of apermit, license, approval or consent, which are prescribed by a special law as a condition for registration of the particular activity, or submit the proof of regaining, obtaining or extension of the permit, license, approvals or consent in question.

Bankruptcy

Also, the adopted amendments harmonize the provisions of the Companies Act with that of the Bankruptcy Lawand prescribe that after the sale of the bankruptcy debtor as a legal entity( as a whole ), the value of the share capital of that company is to be registered in the amount of the purchase price paid. The legislator intended to preserve the legally prescribed minimum share capital, depending on the legal form of the acquired company. Namely, the amendments envisage that if the purchase price is lower than the minimum share capital, company registers the value of the share capital at the value of the minimum share capital prescribed for that legal form. In that case, the buyer is obliged to pay the missing amount up to the amount of the minimum share capital within six months from the day of the suspension of the bankruptcy procedure. Otherwise, a compulsory liquidation procedure shall be initiated against the company.

Rights And Protection Of Minority Members

Crucial amendment addresses the matter of the rights and protection of minority members of a joint stock companyand LLC.

The Law now prescribes the content of the notification that a person who has special duties towards the company submits to the competent body of the company to reporttheir jobs and activities in which there is a personal interest.

A limited liability company, as well as a joint stock company,are obliged to publish on their website, or on the website of the registers agency, the intention to conclude a legal transaction, for which approval concerning the personal interest is required, immediately after issuing such an approval, and no later than on the day of concluding that legal transaction, i.e. undertaking that legal action.

The approval mentioned above contains: a detailed description of the business or action in question, the personal business name of the related party, information on the nature of the relationship with the related party, the date and value of the transaction.

Protection of the rights of minority members also includes a claim for annulment of a legal transaction or legal action and compensation for damages against a person who has a personal interest in that business. It may be filed when approval is obtained and either the legal transaction is not concluded or the legal action is not undertaken at fair value.

If the competent court in the lawsuit procedure imposes a temporary restriction of the right to perform the function of director, member of the Supervisory Board, representative or procurator, the Business registers agency deletes that person from the relevant register.

Furthermore, the amendments introduce the obligation for a non-public joint stock company, as well as for a limited liability company, to, at the request of a shareholder, i.e. a member who owns shares or stakes representing at least five percent of the company’s share capital, no later than three days from the day of receipt of the request, provide the insight into the data on the amount and structure of the total remuneration for each director, i.e. executive director and member of the supervisory board, if the management of the company has a two-tier management system.

The amendments entered into force on 27 November 2021, nevertheless, due to their significance, the implementation of certain provisions has been postponed:
1. The obligation to create a user account on eGovernment portal will enter into force on 27 May 2023;
2. Provision referring to the addition to the registered data on natural persons will be applicable as of 1 June 2022;
3. Provisions concerning the address of the registered seat will enter into force on 1 June 2022.