May 29, 2017

There are four main types of incorporation in Serbia:

  • Limited liability company (‘d.o.o.’)
  • Joint-stock company (‘a.d.’)
  • General partnership (‘o.d.’)
  • Limited partnership (‘k.d.’)

There is also the possibility of establishing a ‘branch’ or ‘representative’ office, or for a sole proprietor to register as an entrepreneur or ‘preduzetnik’ and establish an agency on his or her behalf, an option available to both citizens and foreigners.

Let’s take a closer look at the four main types of incorporation.

Limited Liability

The internationally recognized limited liability company, or in Serbia, the ‘društvo sa ograničenom odgovornošću’ (abbreviated to d.o.o. or DOO) operates in much the same way as it does elsewhere. The minimum initial capital is RSD 100 (approx. 1 EUR). Governing bodies are the annual general meeting of shareholders (AGM) and the managing director or board of directors. A d.o.o. may adopt either a single-tier structure, where there is no board of directors as such, but the AGM appoints one or more directors, answerable to the AGM; or a two-tier structure, in which in addition to the directors there is a supervisory board. The supervisory board has at least three members, who must not be directors or persons having a power of attorney for the company. The supervisory board appoints the directors, sets the company’s strategy and decides on directors’ remuneration. The board is itself appointed by the AGM for a four-year term. The shares of a d.o.o. may not be the subject of a public offering or be publicly traded.

Joint-stock 

In Serbia, this form of company is known as an ‘akcionarsko društvo’ (abbreviated to a.d. or AD) and may be founded by one or more individuals or companies. The minimum initial capital is RSD 3 million, except in special cases (banks, insurance companies, leasing companies etc), of which at least 25% must be paid up at commencement. Governing bodies are the annual general meeting of shareholders (AGM), the supervisory board and the managing director or board of directors. As with a d.o.o., these companies may have a single-tier or two-tier structure. Only the shares of an a.d. may be publicly traded, although they do not have to be.

Partnerships

A partnership may take the form of a general partnership (‘ortačko društvo’) or a limited partnership (‘komanditno društvo’). In either case, a partnership is founded between two or more natural or legal persons who wish to carry on business under a common registered name. There is no requirement for a partnership to have a minimum initial capital. In a general partnership, all partners are jointly and severally unlimited liability for the obligation of the partnership. In Limited partnership, at least one partner (general partner) bears unlimited liability for the obligation of the partnership, and the liability of at least one member (limited partner) is restricted to the value of entity. Partnerships are governed by partners.

Source: www.lawinserbia.com