Amendments to the Company Law Adopted

by ZS Law

The National Assembly of the Republic of Serbia adopted the Law on the Amendments to the Company Law (hereinafter: the Law) on December 7, 2018 and the Law came into force on December 9, 2018.

Although starting from October 1, 2018 companies registered in the Republic of Serbia are no longer obliged to use their stamps, the Law defines and explains in a more precise manner that all documents (e.g. all kind of legal transactions, agreements/contracts that are carried out or concluded by a company, etc.) are valid and that could not be made null and void or objected in a court procedure even if a company’s stamp has not been placed on them. This rule applies even if a company sets out in its internal acts that a company has and uses a stamp while performing its business activities.

The Law improves the protection of minority shareholders by prescribing that the court will pronounce a measure of provisional restriction of the right to perform the function of director, member of the supervisory board, representative or procurator for a period of 12 months, if in the proceedings conducted on the complaint of a company member against persons with special duties towards the company, it is established that there exists a violation of the rules on approving jobs in which are of a personal interest. Also, envisaged is the obligation of the court to, upon validity of the decision, submit such decision to the Business Registers Agency for registration in the Central Record of Provisional Restrictions of the Rights of Persons Registered with the Business Registers Agency.

In order to foster good corporate governance, the Law introduces a new Article 368a which, naturally, applies only to open joint-stock companies. Thus, an open joint-stock company is obliged to make available on the company’s website the following accurate and up-to-date information about the members of a board of directors/supervisory board: profession and the previous position of the members of a board of directors/supervisory board and the information regarding their current membership in other boards or positions they may have in other companies as well.

Finally, the latest amendments are made in respect of the procedure for acquisition and/or disposal of high-value assets. The exception to the general rule is made in a case where a general meeting of an open joint-stock company has made a decision by which the general meeting approves the acquisition and/or disposal of high-value assets for the purpose of concluding a public contract in accordance with the law which governs the public-private partnership and concessions, prescribing that any further modification/alteration of such public contract does not require a new decision by which the general meeting approves the acquisition and/or disposal of high-value assets.

If you have any questions regarding the above, please contact Igor Živkovski, Živković Samardžić Corporate and M&A Partner (