The Legal Framework for the Company Foundation

Establishment of a company, organization and registration of companies and other forms of organization are regulated by Law on companies, The Law on the Procedure of Registration with the Serbian Business Registers Agency, Rulebook on the content of the Business Entities Register and documents required for registration and the Decision on fees for registration and other services provided by the Serbian Business Registers Agency.

The provisions of the Law on Companies apply to the forms of business activities that are established and operating in accordance with special laws.

Legal entities:

Company

A company is a legal entity engaged in a business activity for the purpose of profit generation. A company shall acquire legal personality by registration in accordance with the law governing registration of economic operators.

Legal forms of companies shall be:

General Partnership

A general partnership shall be a company with two or more partners, natural persons and/or legal entities, with unlimited joint and several liability for the company’s obligations with their entire assets.

If a company’s Memorandum of Association or other agreement between partners contains a provision on limitation of partners’ liability to third parties, such provision shall be null and void.

Limited Partnership

A limited partnership shall be a company with minimum two members, at least one of which bears unlimited joint and several liability for the company’s obligations (general partner) and at least another one bears limited liability up to the amount of his/her outstanding contribution (limited partner).

General partners shall have the same status as partners in a general partnership

Limited Liability Company

A limited liability company shall be a company in which one or more company members (natural persons and/or legal entities), hold equity interests in the company’s share capital. Company members shall not be liable for the company’s obligations except in case if they abuse the rule of limited liability

Limited liability company members shall freely regulate their mutual relations and their relations with the company, unless provided otherwise by Law.

Joint Stock Company

A joint-stock company shall be a company the share capital of which is divided into shares held by one or more shareholders.

The shareholders shall not be liable for the company’s obligations except in case if they abuse the rule of limited liability. A joint-stock company shall be liable for its obligations with its entire assets. A joint-stock company shall be public (one that issued the securities) and non-public.

The founding shareholders of a company shall sign its Memorandum of association and its initial Articles of Association. The Memorandum of association of joint-stock company doesn’t change. The Articles of Association regulate the management of the company and other issues in accordance with the law.The Articles of Association, including any amendments and modifications thereof, shall be passed by the General Meeting by a simple majority of the total voting power, unless a higher majority is provided by the Articles of Association.

Entrepreneur

An entrepreneur shall be a natural person with full capacity who carries on a business activity for the purpose of profit generation and is registered as such accordance with the law.

An entrepreneur shall be liable for all obligations incurred in connection with the pursuit of his/her business activity with his/her entire assets, including any assets he/she acquires in connection with the pursuit of his/her business activity. An entrepreneur may entrust management duties to a natural person with full capacity, to manager. A manager must be employed by an entrepreneur.

An entrepreneur may decide to continue carrying on a business activity in the form of a company. Upon forfeiture of the entrepreneur status by deletion from the register and the registration of the company, the natural person concerned shall become liable with his/her entire assets for all obligations arising from his/her operations up to the time of deletion of the entrepreneur from the register.

Representative Office of a Foreign Company

A representative office of a foreign company means a separate organisational unit of a foreign company that may carry out preliminary and preparatory work leading to the conclusion of a transaction by that company.

A representative office shall not have legal personality and may only enter into transactions relating to its current operations. A foreign company shall be liable for any obligations towards third parties that may arise in the operations of its representative office.

Trade Association

A trade association means a legal entity formed by two or more companies or entrepreneurs to pursue common interests.

A trade association may not carry on a business activity for the purpose of gaining profit. Any issues in connection with trade associations that are not explicitly provided for in Law on Companies shall be governed mutatis mutandis by the regulations governing the status of associations. A trade association may not change its legal form to any form of company.

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