Company’s division plan

The provisions of the Companies Act (“Off. Herald of RS”, Nos. 36/2011, 99/2011, 83/2014 – other law, 5/2015, 44/2018, 95/2018, 91/2019, 109/2021 and 19/2025) regulated the implementation procedure of status changes of the division and the spin-off.

Status change division and spin-off may involve one or several companies of the same or different legal form. They may not apply to a company in liquidation or bankruptcy unless the status change is conducted to measure reorganization following the bankruptcy act.

Division

A company may divide by simultaneously transferring all of its assets and obligations to:

Two or more newly incorporated companies (the division by incorporation) or
Two or more existing companies (the division by acquisition) or
One or more newly incorporated companies and one or more existing companies (the mixed division).

The company dissolves upon the completed status change without undergoing a liquidation procedure.

Spin-off

A company may divide itself by transferring a part of its assets and obligations to:

One or more newly incorporated companies (spin-off by incorporation) or
One or more existing companies (spin-off by acquisition) or
One or more newly incorporated companies and one or more existing companies (mixed spin-off).

The company continues to exist upon the completion of status change.

Company’s Draft Division Plan

To conduct a status change, the board of directors, i.e. supervisory board, if the company has a two-tier management system, prepares the following by-laws and documents:

Draft division plan, if only one company participates in the status change, as well as all the documents which are the Integral parts of the draft division plan, as follows:
– Proposal of a decision on amendments to the memorandum of association, i.e. articles of association of the recipient company, and, if the status change leads to the incorporation of a new company, a proposal of the memorandum of association, as well as a proposal of the articles of association of that company if such company is a joint-stock company;
– Divisional balance sheet of the transferring company, in case of a status change involving division or spin-off;
– List of the members of the transferring company with the designation of the par value of their shares, i.e. stocks in the recipient company, as well as shares, i.e. stocks they acquire in the recipient company;
– List of employees in the transferring company whose employment continues in the recipient company
Financial statements, with the auditor’s opinion, with the balance on the day that for no more than six months precedes the day of adoption of the decision of the general meeting on status change; A company may use the following documents as the financial statements:
– Latest annual financial statements with the auditor’s opinion, if no more than six months have elapsed from the end of the business year until the day of rendering of the decision of the general meeting on the status change or
– Semi-annual financial statements with the auditor’s opinion, if more than six months have elapsed from the end of the business year until the day of rendering of the decision of the general meeting on the status change.
Auditor’s report on the completed audit of the status change;
Report on the status change compiled by the board of directors, i.e. executive board, if the company has a two-tier management system;
Proposal of the decision of the general meeting on the status change.

Duty to Publish of the Company’s Draft Division Plan

The company publishes the company’s draft division plan on its internet page, if it has one, and serves it on the register of business entities for publication on the internet page of that register no later than 60 days before the day of holding a session of the general meeting at which the decision on status change is to be made.

Along with the company’s draft division plan, the notification to the members of the company about the time and place at which they may inspect the following documents and by-laws is also be published:

Draft division plan, if only one company participates in the status change, as well as all the documents which are the Integral parts of the draft division plan, as follows:
– Proposal of a decision on amendments to the memorandum of association, i.e. articles of association of the recipient company, and, if the status change leads to the incorporation of a new company, a proposal of the memorandum of association, as well as a proposal of the articles of association of that company if such company is a joint-stock company;
– Divisional balance sheet of the transferring company, in case of a status change involving division or spin-off;
– List of the members of the transferring company with the designation of the par value of their shares, i.e. stocks in the recipient company, as well as shares, i.e. stocks they acquire in the recipient company;
– List of employees in the transferring company whose employment continues in the recipient company
Financial statements, with the auditor’s opinion, with the balance on the day that for no more than six months precedes the day of adoption of the decision of the general meeting on status change;
Auditor’s report on the completed audit of the status change;
Report on the status change compiled by the board of directors, i.e. executive board, if the company has a two-tier management system;
Proposal of the decision of the general meeting on the status change.

Upon publishing the company’s draft division plan, it is deemed that the company’s creditors are also notified of the status change.

If only one company participates in the status change, the board of directors, i.e. supervisory board, adopts a company’s division plan if the company has a two-tier management system.

The company’s division plan contains, in particular, the following details:

Business names and seats of the companies participating in the status change;
Aim and terms under which the status change is performed;
Designation of the value of assets and amount of liabilities transferred by way of status change to the recipient company and their description, as well as how such transfer is made to the recipient company;
Data on the exchange of shares, i.e. stocks and, in particular:
– The ratio at which the shares, i.e. stocks in the transferring company, are exchanged for the shares, i.e. stocks in the recipient company, and the amount of cash payment, if any;
– The manner of taking over the shares, i.e. stocks by the recipient company and the date from which such shares, i.e. stocks, carry the right of participation in profit;
– The data on the special rights that the members of the transferring company holding special requests acquire in the recipient company;
Date from which the business activities of the transferring company terminate, if that company is dissolved upon the completed status change;
Date from which the transactions of the transferring company are deemed, for accounting purposes, as transactions performed on behalf of the recipient company;
All special privileges in the recipient company approved to the members of the board of directors, i.e. executive and supervisory boards if the company has a two-tier management system, of the companies that participate in status change;
Conditions under which the employment of employees shall continue in the recipient company;
Other issues relevant for the performance of status change.

Integral parts of the company’s division plan are:

Proposal of a decision on amendments to the memorandum of association, i.e. articles of association of the recipient company, and, if the status change leads to the incorporation of a new company, a proposal of the memorandum of association, as well as a proposal of the articles of association of that company if such company is a joint-stock company;
Divisional balance sheet of the transferring company, in case of a status change involving division or spin-off;
List of the members of the transferring company with the designation of the par value of their shares, i.e. stocks in the recipient company, as well as shares, i.e. stocks they acquire in the recipient company;
List of employees in the transferring company whose employment continues in the recipient company.

The company’s division plan shall be made in writing and certified in compliance with the law governing signature certification.

Decision on Status Change and Company’s Division Plan

In a decision on the status change, the general meeting approves the company’s division plan adopted by the board of directors, i.e. supervisory board, if the company has a two-tier management system.

In the case of a joint-stock company, the decision on the company’s status change is passed by a three-quarter majority of votes of the stockholders present, unless a higher majority is prescribed by the articles of association.

If, as a result of the status change, certain members of the transferring company become members of the recipient company, jointly and severally liable for its obligations, the decision on status change may be rendered only with their consent.

The general meeting shall, concurrently with rendering the decision on status changes:

Adopt the amendments of the memorandum of association, i.e. articles of association in case of a joint-stock company, if the company continues to operate;
Adopt the memorandum of association of a company which is created in the status change, as well as the articles of association of that company, if it is a joint-stock company;
Adopt a resolution on the share capital increase, i.e. decrease depending on the type of the status change.

If the exchange of shares, i.e. stocks in a different proportion, is affected by a status change, the decision on status change must contain a provision that it enters into force by issuing a written statement by the chairman of the board of directors, i.e. the chairman of the company’s supervisory board, if the company has a two-tier management system, that each member of the transferring company agreed that the exchange of the shares, i.e. stocks in a different proportion is affected by the status change, except for the members of the transferring company that use their right to payment instead of acquiring shares, i.e. stocks in the recipient company in accordance with Article 508 of the Companies Act.

In case of a joint-stock company, the decision on status changes shall contain a provision that it enters into force upon giving of a written statement by the chairman of the board of directors, as well as the chairman of the supervisory board, if the company has a two-tier management system, that all of the dissenting stockholders were fully paid up for the value of their stocks following Article 475 of the Companies Act.

Entry into Force of the Company’s Division Plan

The company’s division plan enters into force when approved by the decision on status change by the company’s general meeting, which carries out the status change unless that plan envisages entering into force later.

Last update: 28. 9. 2025.

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