Loss of Sole Trader Capacity and Continuation of Performance of Activity by Heirs

The status and position of sole traders are regulated only by the provisions of the Companies Act (“Official Gazette of RS”, No. 36/2011, 99/2011, 83/2014 – other Law, 5/2015, 44/2018, 95/2018, 91/2019, 109/2021 and 19/2025) (from now on: the Law).

Article 91, paragraph 1 of the Law stipulates a general rule that a sole trader shall lose the capacity of a sole trader by deletion from the business entities register. Deleting sole traders from the business entities register has a constitutive effect and acts pro futuro.

Deletion of a sole trader shall be executed due to cessation of business operations. Sole trader shall stop doing business by notice of unregistering or by operation of law. Sole trader may not unregister at a date earlier of the day of filing the application on cessation of business operations with the competent registration authority.

Deletion from the register may not be done retroactively.

Cessation to conduct business by operation of law

Sole trader shall cease to conduct business by operation of law in the following cases:

Death or loss of legal capacity;
Expiry of time, if doing business was registered for a limited period;
If his business account was frozen for over two years incessantly, on the basis of initiative to initiate the process of deletion of the sole trader from the register, filed by the National Bank of Serbia or the Tax Authority;
If nullity of sole trader registration was established by a final judgment;
If a final act of a competent body imposed him a measure to stop doing registered business activity, and the sole trader within 30 days from finality of the act fails to register the termination of doing registered business activity for the time period imposed by the measure, i.e. fails to register the change in the activity or fails to unregister the activity;
In case of revocation of a permit, license, approval, consent, etc. which are in accordance with Article 4, paragraph 2 of the Law prescribed by a special law as a precondition for registration, and the sole trader within 30 days from the date of finality act which revoked the permit, license, approval, consent, etc. fails to register change of that activity or fails to unregister the activity;
In case of termination of permit, license, approval, consent, etc. which are in accordance with Article 4, paragraph 2 of the Law prescribed by a special law as a precondition for registration, and the sole trader within 30 days from the date of termination of permit, license, approval, consent, etc. fails to register the change of that activity, fails to unregister the activity, i.e. fails to submit proof of extension of validity of the permit, license, approval, consent, etc.
If the sole trader fails to register new seat address within 30 days from the finality of the judgment ordering the deletion of the registered address of the company’s seat
In other cases prescribed by law.

The registrar who keeps the register of business entities shall publish on the website of that register a notice on the sole trader when the reasons for deletion from the register have been obtained, with an invitation to unfreeze the bank account within 90 days from the date of publication of the notice, i.e. remedy the reason for deletion from the register in the following cases:

If his business account was frozen for over two years incessantly, on the basis of initiative to initiate the process of deletion of the sole trader from the register, filed by the National Bank of Serbia or the Tax Authority;
If a final act of a competent body imposed him a measure to stop doing registered business activity, and the sole trader within 30 days from finality of the act fails to register the termination of doing registered business activity for the time period imposed by the measure, i.e. fails to register the change in the activity or fails to unregister the activity;
In case of revocation of a permit, license, approval, consent, etc. which are in accordance with Article 4, paragraph 2 of the Law prescribed by a special law as a precondition for registration, and the sole trader within 30 days from the date of finality act which revoked the permit, license, approval, consent, etc. fails to register change of that activity or fails to unregister the activity;
In case of termination of permit, license, approval, consent, etc. which are in accordance with Article 4, paragraph 2 of the Law prescribed by a special law as a precondition for registration, and the sole trader within 30 days from the date of termination of permit, license, approval, consent, etc. fails to register the change of that activity, fails to unregister the activity, i.e. fails to submit proof of extension of validity of the permit, license, approval, consent, etc.;
If the sole trader fails to register new seat address within 30 days from the finality of the judgment ordering the deletion of the registered address of the company’s seat.

If the sole trader fails to unfreeze the bank account within 90 days from the date of publication of the notice, i.e. fails to remedy the reason for deletion, the registrar shall, within a further time limit of 30 days, ex officio, issue a decision on deleting the sole trader from the register.

Death or loss of legal capacity of the sole trader

In case of death or loss of legal capacity of the sole trader, an heir, i.e. a member of his family household (spouse, children, adopted children and parents), who is a legally capable natural person, may continue to do business upon closing of the estate on the basis of the probate decision, or by mutual agreement on continuing the business activity signed by all heirs, i.e. their members of family household.

A legally capable heir may continue with sole trader’s business even during sole trader’s lifetime if he exercises that right on the basis of a contract on the assignment and distribution of property during lifetime, in accordance with the regulations governing inheritance.

A legally capable heir of the sole trader i.e. a member of his family household (spouse, children, adopted children and parents), who is a legally capable natural person shall, within 60 days from the day of death of the sole trader, the finality of the decision determining the loss of legal capacity, i.e. concluding the contract on assignment and distribution of property during lifetime, report to the Register of Business Entities the continuation of business activities in accordance with the law on registration.

If special conditions are prescribed for performing the activities of a sole trader in terms of personal qualifications of the sole trader, a legally capable heir of the sole trader i.e. a member of his family household (spouse, children, adopted children and parents), who is a legally capable natural person must meet those conditions.

Last update: 28. 9. 2025.