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Acts and Documents of Serbian Company

Acts and Documents of Serbian Company
Milan Šogorov Attorney at Law - Legal Consultant

There are a lot of acts and documents that one company will draft, write, sign and distribute. While some will be related to cooperation with Clients, Partners, Suppliers or Distributors, others will be concluded with employees, office landlords or banks.

The question is what acts and documents Serbian company has to keep permanently, who has access to company’s acts and documents, who has right to be informed with the content of those acts and documents and when can that right be denied?

Obligation to keep acts and documents

Serbian company is obliged to keep the following acts and documents:

  • The Founding Act;
  • Decision on registration of incorporation;
  • General Acts of the company;
  • Minutes of the sessions of the General Assembly and Decisions made by the General Assembly;
  • Act on the formation of each branch office or other organizational part of the company;
  • Documents proving the ownership and other property related rights of the company;
  • Minutes of meetings of the Supervisory Board, if the management of the company is two-tier;
  • Reports of the Director and the Supervisory Board of the company, if the management of the company is two-tier;
  • Records of the addresses of Directors and Members of the Supervisory Board;
  • Records of the addresses of Members of the company;
  • Contracts concluded by Directors, or Members of the Supervisory Board if the management of the company is two-tier and Members of the company, or related persons with the company.

All of the mentioned acts and documents must be stored at headquarters or at another place known and accessible to all Members of company.

Who has right to be informed with the content of those acts and documents and when can that right be denied?

At written request, the Director is obliged to make available all previously mentioned acts and documents, the Financial Statements of the company, as well as other documents related to the business operations of the company or to the exercise of the rights of Members of the company, to each Member of the company, as well as to the previous Members, for the purpose of inspecting and copying at his own expense, during working hours.

Additionally, the Director is obliged to inform every Member of the company without delay about the relevant facts related to the company’s operations or the exercise of the rights of the Members of the company. Also, each Member of the company has right to request in written that Director within eight days from the day of receipt of the request, at the expense of the Member send him/her a copy of every decision made by the assembly.

Denial of the right of access to company acts and documents and of the right to information

In only two cases can Director deny stated right to the Member of the company, one being when there is a justifiable fear that this right would be exercised for purposes contrary to the interests of company, or for purposes that are not related to membership of the company. Second case is if significant damage could be done to the company or its affiliate.

To make sure that your company operates in accordance with law we would recommend to contact experienced legal and business consultant and ask for their evaluation and professional opinion.

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Managing a Serbian Company

Managing a Serbian Company
Vuk Vučković Attorney at Law - Legal Consultant

The management of a Serbian company can be organized as one-tier or two-tier management. In the case of one-tier management, the organs of a company are the General Assembly and one or more Directors. On the other hand, in the case of two-tier management, the organs of a company are the General Assembly, the Supervisory Board and one or more Directors.

The General Assembly

The Assembly is composed of all members of the company. Unless otherwise provided in the Memorandum of Association, each member of the company has the right to vote in the General Assembly in proportion to the share, but that act cannot provide that the member of the company has no vote.

Its competence is very wide, and it includes making changes of the Founding Act, supervision the work of Directors and adopting Directors reports, if the management of the company is one-tier, election and dismissal members of the Supervisory Board and determines remuneration for their work, if the management of the company is bicameral. The General Assembly sessions may be regular and extraordinary, and they are convened by the Director, if the management of the company is one-tier or by Supervisory Board, if the management of the company is two-tier.

Directors

The company has one or more Directors who are legal representatives of the company. The number of Directors is determined by the Founding Act or by the Decision of the General Assembly. If the number of Directors is not determined by the Founding Act or by the Decision of the General Assembly, it is considered that the company has one Director.

The Director represents the company towards third parties in accordance with the Founding Act, the Decisions of the General Assembly and the instructions of the Supervisory Board, if the management of the company is two-tier. If the company has more than one Director, all Directors represent the company jointly, unless otherwise stipulated by the Founding Act or the Decision of the General Assembly of the company.

The director is entitled to remuneration for his work and may also be entitled to incentives through the allocation of shares.

The Supervisory Board

A member of the Supervisory Board must meet the conditions prescribed by the Company Law, such as to has business capacity and must not be employed in the company. Determining the business strategy of the company, establishment of the Company’s accounting policies and risk management policies and deciding on initiating the procedure and giving Power of Attorney to represent the company in dispute with the director are just some of the tasks that Supervisory Board in obliged to cope with.

If you are not sure whether to organize company as one-tier or two-tier it would be good to speak to legal consultant. Also, if you know how you want to organize but you need help to register a company experienced legal and business consultants can help you to set up business on firm grounds.

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How to Register a Joint-Stock Company in Serbia

How to Register a Joint-Stock Company in Serbia
Vuk Vučković Attorney at Law - Legal Consultant

A Joint Stock Company is a company whose share capital is divided into shares that have one or more shareholders who are not responsible for the company’s liabilities. Consequently, a Joint Stock Company is responsible for its liabilities with all its assets. Beside this general information there are many other that are important and have to be taken into account when we are answering on the question how to register a Joint Stock Company in Serbia.

What documents are needed to complete this procedure?

List of documents that are needed to complete this procedure is quite long one. Therefore, here we will just mention them, and we will not go through every document. Having said that, the list of needed documents is as follows:

  1. Registration Application for the establishment of legal entities and other entities and entry in the unique register of taxpayers – joint stock company,
  2. Founding Act of the Company with certified signatures of members of the Company,
  3. Memorandum of Association of the Company signed by the members of the Company,
  4. Credit Institution’s Confirmation of the paid-in shares in cash, or the valuation of an authorized non-cash value appraiser or a certificate from the competent authority of the non-cash value assessment in accordance with the law,
  5. Several different Decisions, for all facts not stipulated by the Founding Act,
  6. Proof of payment of the state fee.

Shareholders who are founding a Joint Stock Company must sign the Founding Act, and their signatures are certified in accordance with the law governing the certification of signatures before the Public Notary. The founding shareholders also sign the first Memorandum of Association.

What is the minimum share capital of a Joint Stock Company in Serbia?

Subscribed shares that are paid in cash in accordance with the founding act shall be paid prior to the registration of the establishment in a temporary account with a commercial bank in the Republic of Serbia. Prior to the registration of the company, the shareholders who set up the company are obliged to pay or deposit deposits representing at least 25% of the share capital, whereby the paid-up amount of the cash part of the share capital may not be lower than the amount of the minimum share capital amounting to 3.000.000,00 RSD ( around 25.500,00 EUR).

What does the Memorandum of Association have to stipulate?

The Memorandum of Association of a Joint Stock Company contain in particular:

  1. Business name and registered office of the company,
  2. Predominant activity of the company,
  3. Information on the amount of subscribed and paid-up share capital, as well as data on the number and total nominal value of authorized shares, if any,
  4. Essential elements of the issued shares of each type and class in accordance with the law governing the capital market, and in the case of shares that do not have the nominal value and the amount of the share capital for which they have been issued, or accounting value, including any obligations, restrictions and privileges related to each class of actions,
  5. Types and classes of actions,
  6. Special conditions for the transfer of shares,
  7. The procedure for convening a General Assembly,
  8. Determining the organs of the company and their scope, the number of their members, regulating in more detail the manner of appointment and recall of these members, as well as the decision-making methods of those bodies.
  9. Other information in accordance with the Company Law or other competent Law.

If you need any additional information on how to register a Joint-Stock Company in Serbia, or you wish to know more on this topic in general, feel free to contact our team.

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The Share Capital of the Serbian Company

The Share Capital of the Serbian Company
Prof. Dr. Jelena Šogorov Vučković Legal & Banking Consultant

When registering a business, especially when registering Limited Liability Company or Joint Stock Company, the share capital is one of the most important parts of the process. This is also true when we talk about the share capital of the Serbian company. Due to complexity here we will resent basic information regarding share capital for Serbian Limited Liability Company.

What is minimum share capital for Limited Liability Company in Serbia?

The minimum share capital of a company is at least 100,00 RSD (around 0.87 EUR), unless a special law provides for a larger amount of share capital for companies performing certain activities. The members of the company are obliged to pay the registered founding capital within 5 years from the date of registration of the Founding Act. This means that you can register a company without previously paying share capital.

How can share capital be increased?

There are 5 different grounds on which the share capital of the Serbian Company can be increased:

  • new contributions of existing members or members joining the company;
  • converting reserves or profit of the company into share capital;
  • converting of claims from the company into share capital;
  • status changes that result in an increase in share capital;
  • conversion of additional payments into share capital.

How can share capital of the Serbian Company be decreased?

The share capital of a limited liability company may be reduced, but not below the minimum share capital in following situations:

  • to cover losses of the company;
  • to create or increase the Company’s reserves to cover future losses or to increase its share capital from the Company’s net assets;
  • in the cases referred to in Article 46, paragraph 3 and Art. 155 (withdrawal and cancellation of shares) and 159 (disposing of own share) of Company Law;
  • in case of cancellation of the reserved own share.

The share capital of a company is considered to be a decreased on the day of registration in the Register of Business Entities.

What documents you need to submit depend on the legal ground on which share capital is being increased or decreased.

If you want to know more about how to increase or decrease share capital in Serbian company, what documents are needed to complete company formation process, what are state fees and how long procedures last, contact Asst Office and we will provide you with all necessary information.

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Contributions for Legal Representatives of Serbian Company

Contributions for Legal Representatives of Serbian Company

Work, in addition to employment, includes the representation of a company on the basis of entry in the register of Serbian Business Register Agency, as well as the performance of management powers and management tasks in accordance with the law governing the status of companies. There many situations where contribution for legal representatives of Serbian company must be paid, and these are just few of them.

FOREIGN CITIZENS who are the Founders of a company

Foreign citizen – natural person – who is not a resident of the Republic of Serbia, can be a Founder and / or a Member of a company in Serbia. Which regulations will apply to the determination and payment of compulsory social security contributions for the Founder and / or a Member of a company depends on the circumstances of whether a contract has been concluded with the state of residence of Founder and/ or Member in the field of social security.

If a bilateral agreement is concluded, there is no obligation for that person to pay social security contributions under the regulations of the Republic of Serbia if two cumulative conditions are met:

  1. If the natural person submits a certificate that s/he is a resident of the country with which the social security contract has been signed, certified by the competent authority of that state, and
  2. If the natural person submits a certificate that s/he is compulsorily insured in the State of residence (Contracting State), certified by the competent authority of that State.

Failure to provide the above evidence, as well as in the case where no bilateral social security contract is concluded, the regulations of the Republic of Serbia in the field of compulsory social security shall apply.

Founders who do NOT work in their company and are NOT registered to represent the company but are in a working relationship in their company regarding jobs that are not representation

Founder or a Member of a company who is employed by his company is obligatory insured on the basis of employment as an employee. This person may perform any business activity in that company, as well as any other employee, except to represent the business of the company, due to the fact that for these jobs’ s/he is not registered in the Serbian Business Register Agency (it is understood that there is another person registered to represent the company).

Founders and / or Members of a company who have established an employment relationship in their company are entitled to earnings, reimbursement and other income based on the employment relationship in accordance with the law governing employment, a general act with the employer and a contract of employment. This person has all the rights and obligations on the basis of employment like any other employee.

Income Tax is calculated and paid at the rate of 10%.

Founders and / or Members of a company are entitled to a dividend or a share in the profits of the company in accordance with the general act of the company (which is taxed as capital income at the rate of 15%).

Founders who WORK in their company and are REGISTERED to represent the company but are NOT in employment with their company or with another employer

For individuals who are Founders or Members of a company, and are registered to represent that company in which they do not have an employment relationship (and are not employed by another employer), the contribution base is at least the lowest monthly contribution basis.
For these persons, as Founders or Members of a company, all three contributions are calculated and paid as follows:

1. For compulsory pension and disability insurance – 26%;
2. For compulsory health insurance – 10.3%;
3. For unemployment insurance – 1.5%.

The personal income tax is NOT calculated because the individual does not receive the contractual remuneration for his / her employment as a Founder or a Member of a company.

If you need trustworthy associates with experience and knowledge regarding contributions for legal representatives of Serbian Company contact Asst Office.