All contracts to be considered legal and produce legal effects must meet certain conditions:
- the declaration of the intention must be given by a person who has the necessary legal capacity, serious – made to produce the legal effect, and not for any other purpose, free (that there is no defect of consent) – delusion, fraud and/or the threat, in the necessary form, that the desired legal actions are per law and morality
- that the basis of the contract exists
- that the condition is allowed and possible.
The sanction for non-fulfilment of these conditions is the invalidity of the contract, which can be different, depending on the type of defect.
For the most serious defects, the sanction is the nullity of the contract (absolute nullity), while for those who have a lower degree of violation, it is annulment – destruction (relative nullity). There is also a third sanction under contracts, recognized by legal science, which consists of non-existent contracts. Continue reading Invalidity of the Contracts
Since April 1, 2020, began implementation of the Law on Amendments to the Companies Act (“Off. Herald of RS”, Nos. 91/2019) by which two new legal institutes for limited liability companies were introduced:
- reserved own share and
- financial instrument – right to acquire a share.
Reserved Own Share
A reserved own share of a company within the meaning of the Companies Act shall be considered a share that the company acquires from a member of the company without consideration, for the purpose of granting a financial instrument – right to acquire a share.
A reserved own share cannot be pledged, nor can a reserved own share be disposed of, except in the manner prescribed by law. Continue reading Reserved own share and financial instrument
In accordance with the provisions of Companies Act company member can be expelled by resolution of the general meeting or by a court decision.
Expulsion of a Member by Resolution of the General Meeting
Persons who have, under the memorandum of association or otherwise, taken on the responsibility of paying, or entering a certain contribution to the company, are liable to the company for fulfillment of that obligation and are obliged to compensate damage caused to the company by failing or being late to carry out that duty. The memorandum of association, i.e. the articles of association in case of a joint stock company, may stipulate an obligation to pay liquidated damages for untimely performance, or failure to perform the obligation of entering a certain contribution to the company.
If the company member omits to perform his obligation, even in the additional term, the company may pass a decision to expel such member from the company,i.e. in case of a joint stock company, a decision to withdraw and annul without compensation the shares of that shareholder which have not been paid, i.e. for which no in kind contribution has been entered into the company. Continue reading Expulsion of a Company member