Attorney Dragana Djordjevic » "Joint stock company" (2)

Decision on the acquisition of company and its legal effect

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Provisions of the Companies Act shall regulate concept and types of status changes, as well as procedures for conducting status changes, registration, and legal consequences of registration of status changes.

A company in a status change – the transferring company reorganizes itself to the effect that it transfers assets and obligations to another company – the recipient company, while its members acquire shares, i.e. stocks in that company.

The acquisition represents a type of status change.

One or more companies may be acquired by another company by transferring all assets and obligations to that company, whereby the acquired company dissolves without undergoing liquidation procedure. Continue reading Decision on the acquisition of company and its legal effect →

Types and clases of stocks which issue company

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The stocks issued by the company are issued in their dematerialized form and read in the name of a stockholder, and the provisions of those regulations governing the capital market are applied to the registration of the issue of stocks, their legal holders, transfer of stocks, transfer of rights deriving from stocks, limitation of rights deriving from stocks and entry of third party stock rights into Central Securities, Depositary and Clearing House (hereinafter: Central Registry). A stock is indivisible.

A resolution on the issue of stocks, i.e. other securities has to contain all their essential elements pursuant to the regulations governing the operation of the capital market. Issuing of stocks and other securities by public offering is done pursuant to Companies Act and the law governing the capital market.

It is considered that a stockholder in relation to a joint stock company and third parties is a person who is entered in the Central Registry as a legal holder of a stock, and the day of entering in the Central Registry is the day of acquiring the stock. Continue reading Types and clases of stocks which issue company →

Decision on status change

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Status changes which are stipulated by the Companies Act (“Official Herald of RS”, Nos. 36/2011, 99/2011, 83/2014 – other law, 5/2015 and 44/2018) are: acquisition, merger, division and spin-off.

By-Laws and Documents which are necessary for the implementation of the status change

For the purpose of conducting 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 agreement on status change, i.e. draft division plan, if only one company participates in the status change, as well as all the following documents which are the integral part of the agreement on status change:
    – 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 precedes for no more than six months the day of adoption 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. Continue reading Decision on status change →