Do not forget the deadline for harmonization of business with the new Law on Companies of Montenegro

The main changes introduced by the new law that we consider most important for the harmonization process:

The new law introduces a difference between share capital and net share capital, defining net share capital as the difference between the value of a company’s assets and the company’s liabilities. Non-monetary contributions may consist of objects or rights, however, work or services as non-monetary contributions may be possible only in legal entities established as partnerships or limited partnerships.
Companies of public interest are not a new form of company, but a type of LLC or AD that issues securities and other financial instruments on a regulated market in Montenegro or abroad.
A lot of changes have been introduced in AD, among which are:

• Shareholders’ rights are now prescribed in detail, establishing the property and non-property rights of shareholders;
• Introduction of two-tier management system consisting of assembly, the supervisory board, and management board. The companies still have the option to opt for a one-tier management system;
• The Board of directors consists of at least three members, save for the board of directors of a public interest company, which has to consist of at least five members. The Board of directors has to consist of at least 1/3 independent members while a public interest company`s board of directors has to consist of at least 2/5 independent members;
• Public interest companies have to appoint a secretary of the company, while other companies may decide to appoint a secretary if they wish. In companies where there is no secretary, the executive director is responsible for performing tasks within the secretary`s competence.

4. Changes to the LLC were not that broad, but still introduced important novelties:

• Assembly becomes a mandatory body of the LLC, save for LLC`s which consist of only one shareholder which can opt for Assembly;
• LLC can have additional bodies determined by the Act,
• LLC whose securities are listed on the Organized securities market in Montenegro or classified as large companies must have the same bodies as JSC;
• The shareholder can pledge his share or part of the share, but the pledgee has no right to vote until he becomes a member of the company.

• One more important harmonization obligation is that all entrepreneurs and partnerships that weren’t previously registered are now obliged to register within the Central Register of Business Entities within nine months from the date of entry into the force of the Act, i.e., 11 April 2021.