Change in Share Capital

Change in share capital and the role of entities with limited liability and joint stock company is possible under conditions stipulated by the Law on Companies, and based on the decision of the General Meeting.

Change in share capital and the stake apply to a share capital increase, as well as reduce, but not below the minimum share capital stipulated by the Law on companies.

Increase of Share Capital of a Limited Liability Company

Minimum share capital of a limited liability company shall be 100 RSD, unless a higher amount of share capital is provided for by a special law for companies engaging in specific activities.

Share capital of limited liability company shall be increased through:

  • new contributions by of existing members or an acceding member
  • conversion of company’s reserves or profit to share capital
  • swap (conversion) of debt to share capital
  • status changes that result in share capital increase
  • swap (conversion) of additional pay-ins to share capital.

For the realization of the registration of increase of share capital of the limited liability company the following documents are required:

  • the application for the registration of increase of the registered capital of a limited liability company
  • decision of the company’s general meeting on the increase of registered capital
  • bank certificate of payment of the contribution in cash or agreement of the shareholders on the appraisal of the contribution in kind or certificate of the competent authority on the appraisal of the contribution in kind, if the capital increase is made through new contributions of company shareholders or the conversion of additional payments into share capital
  • evidence confirming the existence of debts owed to the company, if the registered capital is increased through conversion of the company debt into capital
  • annual financial statement, if the same is not registered pursuant to the law, when the increase of registered capital is effected through conversion of company reserve funds or profit into registered capital.

Reduction of Share Capital of a Limited Liability Company

Reduction of share capital of a limited liability company can be without the application of provisions on creditor protection or with the application of provisions on creditor protection.

Reduction of share capital without the application of provisions on creditor protection shall be made in the following cases:

  • reduction due to withdrawal and cancellation of shares
    – the application for the registration of a reduction of the registered capital of a limited liability company arising from withdrawal or cancellation of shares
    – the decision of the company’s general meeting on the withdrawal or cancellation of shares
  • share capital reduction without change in net assets (for the purpose of covering losses and creating/increasing reserves for covering future company’s losses):
    – application for registration of reduction of share capital of a limited liability company due to reduction of share capital without change in net assets of the company
    – company general meeting resolution on reduction of share capital.

Share capital reduction with the application of provisions on creditor protection shall be carried out in two steps:

  • First stepregistration of the resolution on reduction of share capital and its publication for a period of three consecutive months starting from the date of registration:
    – application for the registration of the resolution on reduction of share capital of a limited liability company and disclosure of resolution to creditors through the Agency’s website
    – company general meeting resolution on the reduction of capital (not more than three months old)
  • Second stepreduction of capital as a result of the implementation of the published decision on reduction:
    – application for the registration of reduction of share capital of a limited liability company occurring as a result of the implementation of the decision on share capital reduction
    – certified declaration by the company’s competen body stating that creditors’ claims have been secured or settled, i.e., that the creditors did not file a lawsuit with the court of jurisdiction within the prescribed deadline, or proof that the court of law has rejected the motion to order the enforcement of security instruments to protect these creditors.

Change of Share Capital of a Joint Stock Company

A joint-stock company must have minimum share capital in the amount of 3,000,000,00 RSD, unless a higher amount is provided by a special law.

Share capital of a joint stock company may be increased:

  • through new contributions (including conversion of debt into capital, except in case of public joint-stock companies)
  • conditionally, in accordance with Article 301 of the Law on Companies (conditional capital increase)
  • from the company’s retained earnings and reserves available for such purposes (increase from company’s net assets)
  • as a result of status change.

A joint stock company’s share capital may be reduced through:

  • withdrawal and cancellation of shares held by shareholders
  • cancellation of company’s own shares
  • reduction of par value of shares, or of their accounting value in case of non-par shares.

For the realization of registration of changing the share capital of a company the following documents are required:

Increase in Share Capital of a Joint Stock Company

Increase in the share capital of a joint-stock company will always be carried out in two steps:

  • First stepregistration of a resolution on increasing share capital:
    – application for registration of a resolution on increasing the share capital of a joint stock company
    – resolution of the competent body on increasing share capital (not more than six months old)
  • Second step – share capital increase as a result of the implementation of a registered decision:
    – application for the registration of increase in the share capital of a joint-stock company  occurring as a result of the implementation of the resolution on increasing share capital
    – certificate from the Central Securities Depository that the shares have been entered in the Central Securities Register.

Increase in the share capital of a joint-stock company occurring as a result of the exercise of rights of convertible bond holders and warrant:

  • First stepregistration of the decision on issuing convertible bonds and warrants:
    – application for the registration of the decision on issuing convertible bonds and warrants,
    – a decision on issuing convertible bonds and warrants
  • Second stepincrease in the share capital occurring as a result of the implementation of the resolution on issuing convertible bonds and warrants:
    – application for the registration of increase in the share capital occurring as a result of the implementation of the resolution on issuing convertible bonds and warrants,
    – certificate from the Central Securities Depository that convertible bonds and warrants, have been entered in the Central Securities Register.

The Reduction of the Registered Capital of a Joint Stock Company

A. Reduction of share capital without the application of provisions on the protection of creditors of the company, when the share capital is reduced through a one-step process. This is applicable to cases of cancellation of shares (Article 320 of the Law on Companies), and cases when share capital is reduced without changing the company’s net assets (Article 321 of the Law on Companies):

  • application for the registration of reduction of share capital – cases when provisions on creditor protection do not apply and the capital reduction is subject to immediate registration
  • resolution of the competent body on reduction of share capital.

B. Reduction of share capital with the application of provisions on the protection of the company’s creditors when the share capital is reduced through a two-steps process. This includes all other cases exclusive of those mentioned in Articles 320 and 321 of the Law on Companies:

  • First stepregistration of the resolution on reduction of share capital and its publication for a period of consecutive three months starting from the date of registration:
    application for registration and disclosure of the resolution on reduction of share capital of a joint-stock company to the creditors through the Agency’s website
    – resolution of the competent body on reduction of capital (not more than three months old)
  • Second stepreduction of capital as a result of the implementation of the published resolution on reduction:
    – application for the registration of reduction of share capital of a joint stock company as a result of the implementation of the resolution on reduction of share capital
    – certificate of reduction from the Central Securities Depository.

Payment and Contribution of Subscribed Capital

The Payment of Subscribed Cash Capital

  • limited liability company.
    – application for the registration of payment of subscribed cash capital to a limited liability company
    – a bank certificate of payment
  • Joint stock company
    – application for the registration of payment of subscribed cash capital to a joint stock company
    – a share certificate issued by the Central Registry.

The Contribution of Subscribed Non-cash Capital

  • limited liability company or a joint stock company
    – application for the registration of non-cash contributions into a limited liability or a joint stock company
    – shareholder agreement on the appraised value of the non-cash contribution or the appraised value of a non-cash contribution
  • public joint-stock company
    – application for the registration of non-cash contributions into a public joint stock company
    – appraisal of non-monetary contributions by a licensed appraiser.

For all of these changes it is necessary to attach a proof of payment of the fee for change of data!