Law office Cvjeticanin&Partners presents summary of company types

Foreign investors can conduct business as an entrepreneur or found a company in the form of:

• Joint Stock Company (a.d.),
• Limited Liability Company (d.o.o.),
• Limited Partnership (k.d.),
• General Partnership (o.d.).

The most common company type is a Limited Liability Company, which requires merely RSD 100 for incorporation.

Businesses can be also registered as:

• Entrepreneur,
• Representative offices,
• Branches,
• Business Association.

Joint Stock Company (a.d.)

Shareholders – A Joint Stock Company is founded by one or more legal entities and/or natural persons.

Minimum share capital is RSD 3.000.000.

Share and Contribution Requirements – The registered value may not be less than RSD 100. A shareholder’s contribution can be made in money or in kind, but not in labor or services.

Management of a business organization can be arranged as a one-tier or two-tier system.

In the one-tier system the company organs are:

• Shareholders
• One or more Managing Directors, i.e. Board of Directors

In the two-tier system the company organs are:

• Shareholders
• Supervisory Board
• One or more Executive Directors, i.e. Executive Board.

The Articles of association determine the type of Joint Stock Company.

There are higher minimum capital requirements for companies acting as:

• Banks – RSD equivalence of €10 mn
• Insurance companies:
  • Life insurance – RSD equivalence of €2 mn
    • Voluntary pension insurance – RSD equivalence of €3 mn
    • All types of life insurance – RSD equivalence of €4 mn
  • Non-life insurance:
    • Accident and voluntary health insurance-RSD equivalence of €1 mn
    • Motor and railway vehicles total insurance and obligatory insurance – RSD equivalence of €2.5 mn
    • Other forms of asset insurance, risk insurance, and other types of non-life insurance – RSD equivalence of €2 mn
    • All types of non-life insurance – RSD equivalence of €4.5 mn
    • Reinsurance – RSD equivalence of €4.5 mn
• Leasing companies: RSD equivalence of €100,000.

Limited Liability Company (d.o.o.)
Shareholders – legal entities and/or natural persons.

Minimum Capital – RSD 100  (approximately 1 eur).

Share and Contribution Requirements – A member’s contribution to a Limited Liability Company may be made in money or in kind including past, but not future labor or services. The shares are freely transferable between the partners. A share may be transferred to a third party, in which case other members of the company and the company have pre-emptive rights.

The members of the company have pre-emption rights of shares which are the subject of transfer to a third party, except if specifically excluded by the law or memorandum of association. Management of a business organization can be arranged as a one-tier or two-tier system.

In one-tier system company organs are:

• Shareholders
• One or more Directors.

In two-tier system company organs are:

• Shareholders
• Supervisory Board
• One or more Directors.

Limited Partnership (k.d.)

Partners – Two or more natural persons.

Minimum Capital – No minimum equity requirements.

Other Features – A Limited Partnership is a company established for performing business activities within the framework of a mutual firm. In this form of a company, a general partner is jointly and severally liable for the obligations of a partnership, while a limited partner bears the risks and obligations only to the extent of his or her investment.

General partners manage the business and represent the company. Limited partners are not allowed to manage business and to represent the company.

General Partnership (o.d.)

Partners – Two or more.

Minimum Capital – No minimum equity requirement.

Other Features – In a General Partnership, partners may contribute in money or in kind, including past or future labor and services. All partners bear the unlimited liability for the obligations of the general partnership.

Representative Offices

Under this type of business in Serbia, a foreign mother company is required to take responsibility for all obligations that may occur as a result of the representative office’s performance. The office has to be registered with the Business Registers Agency.

A representative office does not have the capacity of a legal entity.

A representative office can only conduct business in the scope of its own activity.

The foreign company is liable for obligations arising from the business of his representative office toward third parties.

Company Branches

Domestic and foreign companies may establish one or more branches as their organizational parts. A branch does not have a legal personality, but conducts business activities in the name and on the behalf of the company. A branch is a registered entity in accordance with the Law on Registration of Business Entities.