Attorney Dragana Djordjevic » "Law on Business Companies" (2)

Company’s own shares – acquisition and disposal

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According to Companies Act (“Off. Herald of RS”, Nos. 36/2011, 99/2011, 83/2014 – other law, 5/2015, 44/2018, 95/2018, 91/2019 and 109/2021 – further: Companies Act) concept of shares is negatively determined, i.e. by the provisions of the Article 150 of the Companies Act shall be prescribed that a company’s shares are not securities and that a company’s shares may not be acquired, nor may they be disposed by forwarding a public offer in terms of the law regulating the capital market.

According to provisions of the Article 157 paragraph 1 of the Companies Act, a share or part of a share a company acquires from its member is considered to be own share of the company in terms of the Companies Act.

A limited liability company cannot acquire own share at its establishment but subsequently from its member due to certain legal situations, which are a specific exception type.

The company can achieve own shares exclusively based on the decision of the company’s assembly, and the founding act cannot transfer the decision on the acquisition of own share to the competence of another body of the company (the director or the supervisory board in the bicameral management system). Continue reading Company’s own shares – acquisition and disposal →

Termination of a company by a court decision

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Judicial liquidation reasons include those determined by the court after the criminal or civil proceedings.

As part of the criminal procedure, a security or protective measure prohibiting the performance of activities can be imposed on the company. After its pronouncement, the company must change its activity or start a voluntary liquidation procedure. The compulsory liquidation procedure is initiated if the company does not do so.

The Law on the Liability of Legal Entities for Criminal Offenses also allows for imposing a penalty of termination of the company. After delivery of the decision, the company must initiate the voluntary liquidation procedure within 30 days; otherwise, the Serbian Business Registers Agency initiates the compulsory liquidation procedure.

There are three reasons for liquidation related to the court’s decision in civil proceedings:

  1. Established invalidity of the founding act
  2. Established invalidity of establishment registration
  3. Ordered the termination of the company following the Companies Act. Continue reading Termination of a company by a court decision →

Business associations

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Business entities join business associations because, in this way, companies and entrepreneurs, especially micro, small and medium enterprises, can strengthen their position on the market, coordinate activities, reduce costs, master new knowledge and experience (know-how), improve products and services, acquire missing complementary advantages, promote their brands and business, and thus increase their competitiveness and innovation, which leads to market expansion and, ultimately, higher profits.

At the macro level, all this helps increase employment, entrepreneurship and self-employment, more balanced regional development, strengthening of the economic sector, export growth and economic progress.

Business associations are divided into two types:

  • business associations with legal status effect (business associations in the status sense) and
  • business associations without status-legal effect (business associations in the contractual sense).

Article 578 of the Law on Business Companies regulates business associations with status-legal effect, stipulating that a business association is a legal person established by two or more companies or sole traders to achieve common goals. Continue reading Business associations →