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

If you have a company in Montenegro, do not forget that the deadline for harmonization of business with the new Law on Companies of Montenegro is approaching. The new Law on Business Entities has been published on the 3, July 2020 in the “Official Gazette of Montenegro” No. 065/20 and it came into force on 11 July of the same year. This new law regulates the key issues concerning the business entities and now it is harmonized with EU “company directives”. An objective of the European Union to achieve uniformity in laws of member states and future members is to facilitate free trade and protect citizens.

 

Deadline for compliance

Under the new Companies Act, all joint stock companies and limited liability companies are required to harmonize their organization with the law and register changes within nine months from the date of application of the law, while all other companies are required to do so within eighteen months. The first deadline is April 11, 2021. The second deadline is January 11, 2022.

What are the penalties if you do not make the adjustment within the legal deadline

If you do not make the adjustment within the legal deadline, the responsible person will be fined up to 2,000.00 Eur.

After that, the court will initiate the liquidation procedure of the company at your expense, and in the liquidation procedure, the director of the company is obliged to prove that there were no illegal actions.

Who is obliged to make a decision on re-registration. Owner or director?

The owner of the company has the obligation to make a decision on the harmonization of the company.

Who will be responsible for paying the fine?

If the adjustment is not made within the legal deadline, the owner of the company will be fined up to 2,000.00 Eur.

I opened a company that has not been operating for 10 years or more. What can I do?

Close the company yourself before the deadline. In that case, you will not pay the penalty due to the expiration of the term and you have no criminal liability.

How to avoid paying a fine?

If you want to avoid paying a fine, the only option left is to close the company yourself before the deadline.

Are there any instructions for customizing the company?

You need to study the Companies Act well. It will be easier for an expert dealing with this matter to solve all this. For a joint stock company, the adjustment process is much more complex and expensive, so be sure to hire an expert. According to the information gathered, the cost of adjusting the registration of a limited liability company – LLC is about 150 euros, and for a joint stock company is 1,000.00 euros.

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Costs of business harmonization in accordance with the new Companies Act

Limited Liability Company (LLC)

150,00EUR

JOINT STOCK COMPANY

1000,00EUR

If you need help in the business harmonization process, feel free to contact us

email: selecta.me@gmail.com

mob. +382 68355501

What is changing in the 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.
  1. 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.

Ako vam je potrebna pomoć u procesu usklađivanja vašeg poslovanja s novim Zakonom o trgovačkim društvima, slobodno nas kontaktirajte

e-mail: selecta.me@gmail.com 

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