What is corporate law?
The term corporate law entails the regulations governing companies, entrepreneurs (sole proprietors), and other legal entities, their status, internal organization, and mutual relations between founders. Commercial law, company law, and corporate law are very similar concepts and the text will use each name for this branch of law. Everything that accompanies a company from the procedure of a company formation in Serbia, operations, assumption of rights and obligations, relations between members of a legal entity, relations between members of a company and management (directors) of a company, obligations of members and directors towards the company itself as a legal entity, everything up to the termination of a legal entity through bankruptcy or liquidation falls under the branch of law called corporate law.
What is included in corporate law?
A corporate law attorney provides legal assistance that includes, among others, the following:
1. Company formation in Serbia (eg LLC), sole proprietorship, or other legal entity;
Company formation in Serbia entails the drafting of the Article of incorporation or Article of association, notarizing the article, and submitting an application for the company registration in Serbia at the Agency for Business Registers. The Article of association is the most important legal act of a limited liability company, and in case of misunderstandings between the founders, it represents the main source of resolution, along with the Companies’ Law, which is why the importance of that act is immeasurable. Opening a company in Serbia while in an employment relationship is practically a special model that involves a person, who is already employed, establishing a company for the purpose of carrying out a business activity, outside of his or her workplace.
2. Drafting of other internal acts (bylaws) of the business entity;
The internal acts of the company are important for the precise regulation of mutual relations between the founders and members of the legal entity. Members (founders) of a company may conclude a contract of members of the company, which is concluded between all or some individual members of the LLC in connection with the company. Also, contracts concluded by a legal entity in a broader sense represent commercial law, and the attorney at law from law office Pekic provides legal assistance in this regard.
3. Consulting in connection with the management of a company;
The management of a business entity is often faced with challenges that also have legal or tax implications. Before making a decision, it is important to consult a lawyer.
4. Taxes in Serbia;
The biggest interest of all businessmen is taxes. The correct tax burden of a company is the most important aspect of a business. Taxes in Serbia for foreigners are not very different from taxes for local population. The Republic of Serbia offers subsidies and tax breaks to companies under certain conditions. Law office Pekić advises businessmen to take advantage of these benefits and not to pay more taxes than they owe. Some of the subsidies also depend on the region in which the company operates, including the choice of headquarters, so prior to the establishment of the company in Serbia it can lead to different effects in terms of available state aid.
5. Legal Compliance - Consulting for compliance with all laws and governmental by-laws that bind every business entity;
The list of regulations and inspections that accompany the implementation of regulations is long. From market and tax inspections to environmental inspections to personal data protection, ensuring comprehensive compliance with all regulations can be a chore if you don't have a lawyer. The essence of every business is that you deal with your operations and strategy, and the lawyer ensures that you comply with the law. In the event that business entities do not comply with the regulations that oblige them, they risk being fined by the competent inspection authority in the amount of several million dinars each time.
6. Legal due diligence;
Verification of the company, its rights, and obligations is the most common during mergers and acquisitions of companies. The purchase of prospective companies in private ownership (eng. private equity), as well as the initiation of joint ventures, generally follows a comprehensive check of the company, through legal due diligence.
7. Merger and acquisition of companies;
In addition to conducting legal due diligence, the corporate law attorney in Serbia provides legal assistance in negotiations and drafts a share purchase agreement.
8. Representation during the change of legal form;
Change of legal form implies a process in which a business entity moves from one form of activity to another. For example, if a company was founded as a limited liability company (LLC) and now wants to become a joint-stock company (JSC), it must carry out the procedure for changing its legal form. A specific type of change in legal form is the change from a sole proprietorship to a company - legal entity - most often LLC. In that case, the sole proprietorship is simultaneously erased from the register of business entities and the registration of the establishment of a business company takes place, which takes over all the rights and obligations of the sole proprietorship.
9. Implementation of the vesting or ESOP in the company (Employee stock ownership);
Starting in 2020, the Companies’ law recognizes the right to acquire a share in a limited liability company as a financial instrument and prescribes the procedure for registering that right in the register. This institute, which is known internationally as vesting or ESOP (Employee stock ownership), enables companies to give their employees, consultants, and other affiliates a share in the ownership of the company under certain conditions - e.g. that employees stay in the company for at least two years. This benefit is a motivation for highly qualified personnel to join the work of an innovative startup or other company.
10. Consulting in the procedure of public-private partnership and concession;
In Serbia, the Law on Public-Private Partnerships and Concessions is in force, which comprehensively regulates this area. Many direct foreign investments in Serbia are carried out through a strategic partnership with a local company.
11. Representation in the public procurement procedure;
Companies that sell their goods and services to public sector entities (state-owned companies, state authorities, etc.) participate in the public procurement procedure, which is prescribed by the Law on Public Procurement, in order to make such a process transparent and legal. If the contracting authority, a public sector entity, conducts a public procurement procedure (tender) in such a way that you believe that it did not comply with the law, the Law on Public Procurement provides you with legal means to protect your rights.
12. Bankruptcy and liquidation proceedings;
Bankruptcy and liquidation proceedings are carried out in order to erase a company from the register, whereby the company ceases to exist. Bankruptcy proceedings are carried out when the company is over-indebted and cannot pay its obligations, while liquidation proceedings are carried out in other cases when the reason for closing down the company is not debts.
Company formation in Serbia from abroad, through a special power of attorney
Any legal and natural person, domestic or foreign, can establish a company (LLC, etc.), sole proprietorship, or other legal entity. Opening a company online, i.e. how to register a company in Serbia through a special power of attorney has been covered separately in the BLOG.
Corporate law attorney in Serbia
The Pekić law office provides legal assistance in all the aforementioned spheres of corporate law in the territory of our largest cities - Belgrade and Novi Sad, but also in other places throughout Serbia.
If you need legal assistance in the field of corporate law, for example, assistance with a company formation in Serbia, and you have an issue or need advice, or if you want to receive an estimate of the costs charged by our office, contact us by e-mail at [email protected] or fill out the contact form on the website or write to us in the inbox on Facebook messenger or Linkedin.