Registration of the Business Entities-Companies
Business entities can operate and be organized in various legal forms, including: (i) Entrepreneur, (ii) Limited Liability Company (LLC or Ltd), (iii) General Partnership, (iv) Limited Partnership, (v) Joint Stock Company, (vi) Representative Office of a foreign company, (vii) Branch Office of a company or Branch office of a foreign company, (viii) Cooperative and Cooperative Federation.
The Serbian Business Registry Agency is responsible for the company registration process, which varies depending on the legal form and includes specific characteristics. Company formation in Serbia is a strictly formal process, the registry provides prepared application forms and identification of the applicant is ensured by signature certification at the Notary public.
A Sole Proprietor, also known as an Entrepreneur, is an individual engaged in business commercial activities. Entrepreneur bears full responsibility for any liabilities stemming from their business activities, including their personal assets. Typically, an Entrepreneur operates under a designated business name, which includes the owner’s name, a description of the primary activity, the term “entrepreneur,” or its abbreviation “pr,” along with the office place of business.
For the registration of the Entrepreneur, the following documents must be submitted:
- Standard registration form;
- Photocopy of identity card for domestic individuals or passport copy for foreign citizens;
- If entrepreneurial activities require prior authorization, approval, or any other document from a competent authority, such permit or approval has to be provided;
- Evidence of registration fee payment.
A Limited Liability Company also known as LLC or Ltd is a business structure where one or more members hold shares in the company’s capital. Unlike sole proprietors, the members are shielded from personal liability for the company’s debts, except in cases of misuse of this protection. Both domestic and foreign individuals or legal entities can establish a Limited Liability Company. Typically, the minimum share capital required for the company formation in Serbia is 100 Dinars, unless specific activities necessitate a higher capital amount as per relevant laws. Each member’s share in the company corresponds to the value of their contribution to the share capital unless otherwise specified in the company’s Articles of Incorporation. Each member is entitled to only one share, any additional shares acquired are consolidated into a single share.
The contributions may be in cash or in assets, and they are expressed in local currency. The share capital of a Limited Liability Company does not need to be paid at the moment of registration, but it must be subscribed and specified in the Articles of Incorporation with a time limit for payment, which cannot be longer than 5 years starting from the adoption of the Articles of incorporation.
The management of the company may be organised as a single-tier or a two-tier system. In the case of a single-tier management system, company bodies shall include (i) a General Meeting and (ii) one or more Directors. In the case of a two-tier management system, company bodies shall include (i) a General Meeting, (ii) a Supervisory Board and (iii) one or more Directors.
For the registration of a Limited Liability Company, the following documents must be submitted:
- Standard registration form;
- Articles of incorporation (decision or agreement) with certified signatures of the members;
- Proof of the member’s identity (for nationals – photocopy of the identity card, for foreigners – photocopy of passport, or company extract if the founder is a legal entity,
- Decision on appointment of the representative, if not specified in the Articles of Incorporation;
- A bank statement verifying the payment of pecuniary share capital if it’s paid before registration, or a members agreement on assessing the value of non-cash contributions, if capital is entered prior to registration;
- Evidence of registration fee payment.
General Partnership is a company set up by two or more partners who are responsible for all of the company’s liabilities with all of their assets. Partners’ contributions in the partnership are of equal value, and they acquire shares equal to their contributions unless a different arrangement was made by the Agreement on Establishment. The partners’ non-cash contributions in the general partnership may be in the form of tangible or intangible assets, and exceptionally in the form of work or services.
For the registration of the founding of the General Partnership, the following documents must be submitted:
- Standard registration form;
- Establishment Agreement, with certified signatures of all partners;
- A photocopy of the identity card for domestic individuals or a passport copy for foreign citizens for each partner;
- Decision on appointment of the representative, if not specified in the Agreement on Establishment,
- A bank statement verifying the payment of pecuniary share capital if it’s paid before registration, or a members agreement on assessing the value of non-cash contributions, if capital is entered before registration;
- Evidence of registration fee payment.
Limited Partnership is a company with a minimum of two members, in which at least one member has unlimited liability for the company’s performance (general partner), while at least one other member has limited liability up to the value of his/her agreed contribution (limited partner). Limited partner and general partner divide the profit and cover the debts in proportion to their shares in the partnership if the Agreement on Establishment does not stipulate otherwise.
For the registration of a Limited Partnership, the following documents must be submitted:
- Standard registration form;
- Agreement on the establishment, with certified signatures of the members;
- Evidence of member identity, such as a photocopy of the identity card for nationals and copy of passport for foreigners, or company extract if the founder is a legal entity;
- Decision on appointment of the authorized representative, if not specified in the Agreement on Establishment;
- A bank statement verifying the payment of pecuniary share capital if it’s paid before registration, or a member’s agreement on assessing the value of non-cash contributions, if capital is entered before registration;
- Evidence of registration fee payment.
A Joint Stock Company is an entity where capital is divided into shares, which can be owned by one or more shareholders. The shareholders are not personally liable for the company’s debts, except in cases of misusing this limited liability. The company itself is liable for its obligations with all its assets. Shares of the company are issued in dematerialized form and registered under the name(s) of the owner(s) with the Central Securities Depository and Clearing House.
To initiate the company formation process, incorporation documents must be prepared. Articles of incorporation need to be signed by each founder and their signatures must be certified. This document encompasses vital details including shareholder information and their contributions, share particulars (such as number, type, class, and nominal value), company specifics (like business name, location, and primary activity), and a declaration from each founder affirming the company’s establishment and their commitment to contributing funds. Furthermore, the Statute, an obligatory document for Joint Stock Companies, governs the company’s internal organization and management. It comprehensively outlines all essential company information and is registered in compliance with the law. Subscribed shares which are, in accordance with the Articles of Incorporation payable in cash, shall be paid prior to registration into a temporary account with a commercial bank in the Republic of Serbia. Prior to registration of the company, the shareholders who intend to establish a company are obliged to pay or to enter contributions that represent at least 25% of the capital, where the amount of the paid capital cannot be less than the minimum of the share capital which is in the amount of 3,000,000.00 dinars. The nominal value of shares cannot be less than 100,00 dinars.
The management of a company may be organised as a single-tier or a two-tier system. In the case of a single-tier management system, company bodies shall include (i) a General Meeting and (ii) one or more Directors or a Board of Directors. In the case of a two-tier management system, company bodies shall include (i) a General Meeting, (ii) a Supervisory Board and (iii) one or more Executive Directors or an Executive Board.
For the registration of a Joint Stock Company, the following documents must be submitted:
- Standard registration form;
- Articles of incorporation with certified signatures of the members;
- Company Statute with certified signatures of the members;
- Statement of the crediting institution confirming the cash payment of share value, or assessment report by the certified assessor of the non-cash investment value or confirmation of the relevant authority about the value of the non-cash investment, in accordance with the law;
- Decision on appointment of Director or Chairman and members of Board of Directors, if not specified in the Statute;
- Decision on appointment of members of Supervisory Board, in case of a two-tier system, if not specified in the Statute;
- Decision on appointment of members of the Executive Board, in case of a two-tier system,
- Decision on appointment of the representative, if not specified in the Statute;
- Evidence of registration fee payment.
A Representative Office of a foreign company serves as its organizational unit, empowered to undertake preliminary and preparatory measures to finalize legally binding agreements on behalf of the company. Not constituting a separate legal entity, the representative office operates within the bounds of its current activities, capable of entering into legally binding agreements pertinent to its operations.
The foreign company bears responsibility towards third parties for any liabilities arising from the activities of its representative office, which is established through a decision made by the competent body of the foreign company.
For the registration of the Representative Office, the following documents must be submitted:
- Standard registration form;
- Decision on formation of Representative Office;
- Company certificate/excerpt issued by the register in which the foreign company is registered, translated by the sworn translator;
- Evidence of bank accounts used by the foreign company for business transactions;
- A statement from the authorized representative of the foreign company, affirming the company’s acceptance of all liabilities arising from the business activities of the representative office. This statement must be certified by the relevant authority and translated by a sworn translator;
- Evidence of registration fee payment.
A company’s branch office operates as an independent organizational division, conducting business activities within the legal framework. It operates under the company’s name and on its behalf but does not possess legal entity status. The company assumes unlimited liability for obligations to third parties arising from the branch office’s activities. The establishment of a branch office typically requires a decision by the company’s assembly or partners, unless specified otherwise in the Articles of Incorporation or the Statute.
For the registration of the Company’s branch office, the following documents must be submitted:
- Standard registration form;
- Decision on branch office formation;
- Decision on appointment of a representative of the branch office, in a case if the representative is different from the representative of the company founder of the branch office;
- Evidence of registration fee payment.
The Foreign Company’s Branch Office is its separate organizational unit through which the company performs business activity in the Republic of Serbia, in accordance with the law. The branch office is established by a decision of the competent authority of a foreign company. A foreign company’s branch office has its principal activity, but it can perform all other activities permitted by the law, regardless of the fact whether they have been specified by the decision on the establishment of the branch office. Despite not possessing legal entity status, the Foreign Company’s Branch Office holds resident status for taxation purposes and is obliged to submit annual financial statements.
For the registration of the Foreign Company’s branch office, the following documents must be submitted:
- Standard registration form;
- Decision on foreign company branch office formation;
- Company founder certificate/excerpt issued by the register in which the foreign company is registered, translated by the sworn translator;
- Evidence of bank accounts used by the foreign company for business transactions;
- A statement from the authorized representative of the foreign company, affirming the company’s acceptance of all liabilities arising from the business activities of the branch office. This statement must be certified by the relevant authority and translated by a sworn translator;
- Evidence of registration fee payment.
A Cooperative represents a collective of individuals organized according to cooperative principles such as voluntarism, solidarity, democracy, economic participation, equal management rights, independence, cooperative education, and collaboration. Its primary objective is to pursue economic, social, and cultural interests. Cooperatives come in various forms including farming (both general and specialized such as cereal, fruit, wine, livestock, beekeeping, homemade, etc.), housing, consumer, trade, health, youth, and student, as well as other types tailored for production, trade in goods and services, all in accordance with relevant regulations.
For the registration of a Cooperative, the following documents must be submitted:
- Standard registration form;
- Agreement on the establishment, evidencing certified signatures of the members;
- Documentation confirming the identity of cooperative members, including a photocopy of a personal ID card for Serbian nationals, and a passport copy for foreign nationals, or a company excerpt from the register if the founder is a legal entity;
- Record of the constitutive assembly meeting;
- Cooperative rules;
- Book of members (only for cooperatives with membership fees);
- Bank confirmation of the payment of the cash contribution if such contribution is payable and/or cooperative members’ agreement regarding the appraised value of the non-cash contribution or appraisal of the value of the non-cash contribution if applicable (only for the Cooperatives with contributions);
- Decision on the appointment of the Chairman and members of the Board of directors (if any);
- Decision on the appointment of Chairman and members of the Supervisory board (if any);
- Evidence of payment of the registration fee.
Cooperative federations are independent and professional business interest organizations that are established in order to promote cooperative activities and protect their common interests. Cooperative federations are established by types of cooperatives and for a specific territory.
For the registration of a Cooperative Federation, the following documents must be submitted:
- Standard registration form;
- Agreement on cooperative federation establishment;
- Cooperative federation rules;
- Decision on the appointment of the Chairman of the federation, and/or other representative if not specified in the Agreement on establishment;
- Decision on the appointment of Chairman and members of the Board of directors and Supervisory board;
- Evidence of registration fee payment.
Attorney at law Damir Petrović
The information contained herein has been provided only for the purpose of general information and cannot be considered as a legal opinion or legal advice. Accordingly, the Law Firm Petrovic Mojsic & Partners disclaims all responsibility and accepts no liability concerning actions taken or not taken based on any or all the contents contained herein.
