On June 8, 2018, the Parliament of the Republic of Serbia adopted the Law on Changes and Amendments to the Law on Business Enterprises, which entered into force on 9 June 2018.
Newspapers should overcome certain problems that occurred during the application of earlier provisions, and harmonization with the law of the European Union was also made. Most provisions have been postponed since October 1, 2018, and the provisions concerning cross-border merger and merger of companies, European economic interest groups and European joint stock companies are applicable from January 1, 2022. From June 9, 2018 the provisions concerning the valuation of the value of the non-cash role and the determination of the market value of the shares are applied. An overview of the most important changes is given below:
Qualified electronic signature
In accordance with the E-Government concept, the possibility of verifying signatures on the founding act, if it is an electronic document, is replaced with a qualified electronic signature, and in the case of a digitized document, a qualified electronic signature, or a qualified electronic signature of the person authorized for authentication. The founding act made as an electronic, or digitized document, is registered in electronic form.
Use of stamps
It is envisaged that the obligation to use stamps in business letters and other company documents can not be prescribed by special regulations. Additionally, the provisions of other laws and regulations, which provided for the use of seals, were abolished.
Business Name
It is now envisaged that the prior consent of the competent authority is necessary not only for the use of the name of Serbia in the business name, but also for the derivatives of these words, as well as the three-letter “SRB”. The possibility that the abbreviated business name contains an acronym of words from the name and description of the subject of business has been introduced.
Procur
It is envisaged to procure issues by decision of the director, board of directors or executive board, unless otherwise determined by internal acts. A joint procurator was abolished and only the possibility of limiting the authority of the procurator was foreseen by supposing the legal representative of the society.
Determination of the market value of shares and securities
The method of determining the market value of shares, as well as the value of securities and money market instruments, has changed, when they make a non-cash stake. The same is now defined as the weighted average price realized on the regulated market, ie multilateral trading platform in the sense of the law governing the capital market, for a period of six months.
The condition that is required is that in that period the realized volume of turnover amounted to at least 0.5% of their total issued number and that in the same period more than 1/3 of trading days were traded on a monthly basis.
Approval of a legal transaction in case of personal interest
The approval of a legal transaction or transaction whose value exceeds 10% of the carrying amount of the total assets of the company in case of personal interest is introduced. In this case, the company is obliged to obtain a report on the assessment of the market value of the goods or rights that are the subject of such legal transaction or legal action. It also prescribes the obligation of the company to publish a detailed notice on its website or on the website of the Business Registers Agency after its approval.
Decrease in share capital in d.o.o.
Share capital in d.o.o. can be reduced only in specific cases: loss of society;
creating or increasing the company’s reserves to cover future losses or to increase the core capital from the company’s net assets;
capital increase due to the withdrawal and cancellation of shares and distribution to members, as well as due to transfer to a member or a third party for remuneration.
Own shares
The reasons from which the company can acquire own shares are narrowed. The Company may cancel its own share, only in certain cases, when it is obliged to carry out the procedure of reducing the share capital. If a company does not have its own share in the distribution of members of the company or the transfer of a member of the company or a third party to compensation within three years from the date of acquisition, it shall be obliged to cancel its own share and conduct the procedure of reducing the share capital.
Restoring additional payment
It is stipulated that the company is obliged to pay additional payments not only to the present members of the company, but also to the former members of the company. In addition, at the request of a member of the company, additional payment is considered to be a full or partial fulfillment of the obligation to pay the subscribed money role. Also, in the case of a transfer of a share, the company is obliged to return the additional payments to the transferor of the share, unless the transfer agreement provides otherwise.
Deadline for dividend payment
The law introduces a novelty in the form of a mandatory deadline for the payment of a dividend that can not be longer than six months from the date of making the decision on dividend payment.
High value assets
The acquisition, ie the disposal of high value assets, does not include the simultaneous establishment of a pledge right, a mortgage or other security, in order to secure its own obligation under a loan agreement, loan or other legal transaction. In this case, the highest value of a single legal transaction is taken as the value at which assets of great value are determined.
Branch of the company
Each branch of the domestic and foreign company is obliged to register with the Business Registers Agency.
In the event of a cessation of a company in which it is a branch, the branch does not have to cease to exist. Namely, in the case of a status change of the founders of the branch, there is a possibility to make a decision, or the consent of the legal successor of the founders of the branch, to continue the work of the branch. In that case, the branch continues to exist and operate, with the change of business name.
The Branch Education Decision must also contain the e-mail address. When registering a branch, the founder’s financial statements must also be submitted.
Representative office of the company
The decision on the education of a representative office of a foreign company must contain an e-mail address and this address is registered.
Cross-border merger and merger of companies
The law introduces the possibility of cross-border mergers and mergers of companies in which at least two companies are involved, one of which is registered in the territory of the Republic of Serbia and at least one is in the territory of another EU Member State or the European Economic Area.
European Joint Stock Company
The law provides for the possibility of establishing a European joint stock company (Societas Europea) in the form of a joint stock company, with a minimum core capital of 120,000 euros in dinar equivalent.
European Economic Interest Grouping
European Economic Interest Grouping is a legal entity founded by at least two companies, entrepreneurs or other legal or natural persons performing an agricultural or other activity, of which at least one is registered on the territory of the Republic of Serbia and the other in the territory of another EU Member State or European Economic Area.
Source: KPMG
