Valuation of securities - special and general rules

Valuation of the contribution in kind consisting of the securities

Fixing the value of a contribution in kind, which is consisting of the securities is done in two ways:

  • by applying of the special rules which are prescribed by Article 57 of the Law on Companies or
  • by applying of the general rules, which are prescribed by Article 51 of the Law on Companies, for appraisal of the value of a contributions in kind which ought to be entered in other goods.

Valuation of securities by applying of the special rules

According to the provisions of Article 57 of the Law on Companies fixing the value of the contribution in kind, which is consisting of securities, shall be valid if the following conditions are met:

  • Date of fixing of a valuation of the value – not later than 60 days before the date of making of such contribution in kind which is consisting of securities to a company
  • Method of calculating ot the value – The value of a contribution in kind, which is consisting of securities, shall be determined as the weighted average price of those securities commanded in a regulated market or a multilateral trading platform within the meaning of the law governing the money market in the six months preceding the valuation date. The average price and weighted average price are not identical. Weighted average price better expresses the average of trading with securities, because it takes into account the quantity, while the average price takes into account only the amounts. Weighted average price is calculated for a period of six months from the day preceding the date of determination of weighted average values.
  • The quantity of securities trading – It is essential that in the period of six months preceding the valuation date a certain the trading volume of the securities are achieved, in such a way that:
    – the trading volume of the securities concerned in that period was minimum 0.5% of their total issued number;
    – during minimum three months of that period, the trading volume of the securities was minimum 0.05% of their total monthly issued number.

Valuation of securities by applying the general rules

Company may decide to fix the value of a contribution in kind, which is consisting of securities, by applying the general rules, which are prescribed by Article 51 of the Law on Companies, in the following cases:

  • if the conditions set out in paragraph 2 of Article 57 of the Law on Companies are not met, which refer to the quantity of securities trading, or if the previous cited conditions are met
  • if between the date of valuation referred to in paragraph 1 of Article 57 of the Law on Companies and the date of making of a contribution in kind to a company circumstances arose which significantly affected the value of such contribution in kind, in which case the application of this method of valuation is required.

Valuation of the contribution in kind consisting of the securities

According to the provisions of Article 51 of the Law on Companies the value of a contribution in kind in an company the following persons are authorized to apprise:

  • a certified court expert, an auditor or another specialist authorised by a competent national authority of the Republic of Serbia to appraise specific assets or rights or
  • an eligible company that complies with all legal requirements for appraisal of the assets or rights covered by the appraisal concerned.

An appraisal of a contribution in kind must have been done within maximum one year before the date of making of a contribution in kind and it shall be registered and published in accordance with the law on registration.

If a company fails to act in accordance with paragraph 3 of Article 57 of the Law on Companies in other words if a company not make a valuation of the contribution in kind, which is consisting of securities, by applying the general rules, company members whose equity interests or shares accounted for minimum 5% of the company’s share capital shall be entitled to seek a valuation of the contribution in kind from the competent court in non-litigious proceedings before the expiration of 90 days of the date of making of the contribution in kind.

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Entering and changing data of the company »

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