{"id":732,"date":"2024-12-09T10:11:41","date_gmt":"2024-12-09T09:11:41","guid":{"rendered":"https:\/\/vraneseviclaw.com\/?p=732"},"modified":"2024-12-09T10:11:42","modified_gmt":"2024-12-09T09:11:42","slug":"how-to-prepare-for-starting-a-company","status":"publish","type":"post","link":"https:\/\/vraneseviclaw.com\/en\/how-to-prepare-for-starting-a-company\/","title":{"rendered":"How to prepare for starting a company?"},"content":{"rendered":"

Embarking on your own business venture is an exciting process, but many questions arise when starting the formal registration process.<\/span>\u00a0<\/span><\/p>\n

To ease this process for you, in this article you will find an explanation of several preparatory steps. Serbia is one of the attractive European destinations for setting up companies due to its low corporate tax rate, low company formation costs, and startup subsidies.<\/span>\u00a0<\/span><\/p>\n

In any case, we always advise you to choose a law firm specialized in corporate law.<\/span>\u00a0<\/span><\/p>\n

Since May 2023, applications for the establishment of a company can only be <\/span>submitted<\/span> electronically.<\/span><\/span><\/p><\/blockquote>\n

Choosing the legal form<\/span><\/span>\u00a0<\/span><\/h3>\n

You can start your venture as an entrepreneur or establish a company.<\/span>\u00a0<\/span><\/p>\n

An entrepreneur is defined as a legally capable natural person who carries out an activity for the purpose of generating income and is responsible for all obligations arising in connection with the performance of their activity with their entire property. Therefore, the responsibility of an entrepreneur is unlimited. Many people choose this form due to tax benefits.<\/span>\u00a0<\/span><\/p>\n

Furthermore, we have companies, which is the focus of this article. The most common choice is a limited liability company (LLC), but there are also partnerships, limited partnerships, and joint-stock companies.<\/span>\u00a0<\/span><\/p>\n

Which legal form you choose is a matter of personal preference, but we suggest you thoroughly study the companies mentioned. For example, a partnership consists of two or more partners who are unlimitedly jointly responsible for their entire property. If the founding act of the partnership contains a provision limiting the partners’ liability towards third parties, that provision has no legal effect.<\/span>\u00a0<\/span><\/p>\n

In a limited liability company, the liability of the members is limited to their shares in the company. However, knowledge is crucial here as well, because if you rely on limited liability in such a way that, for example, you dispose of the company’s assets as if they were your personal property, you may endanger yourself due to the provision on <\/span>piercing the corporate veil.<\/span><\/a> It is illustratively described in practice that there is a curtain between the limited liability company and its members, but if the members abuse the limited liability, the curtain can be lifted.<\/span>\u00a0<\/span><\/p>\n

Although we primarily follow the Law on Companies, if, for example, you want to establish a limited liability company whose predominant activity will be <\/span>financial leasing<\/span><\/a>, keep in mind that the Law on Financial Leasing also applies to the establishment of your company.<\/span>\u00a0<\/span><\/p>\n

Main business activity<\/span><\/span>\u00a0<\/span><\/h3>\n

A company has one main activity that is registered, but it can also perform all other activities that are not prohibited by law, regardless of whether they are specified in the founding act or statute. You can find the codes of activities in the Regulation on Classification of Activities (Official Gazette RS no. 54\/2010).<\/span>\u00a0<\/span><\/p>\n

Despite the freedom of choice provided by Article 4, Paragraph 1 of the Law on Companies, Paragraph 2 notes that if a special law conditions the registration or performance of an activity by issuing prior approval, consent, or another act of the competent authority, then such approval or consent must be obtained.<\/span>\u00a0<\/span><\/p>\n

Business name<\/span><\/span>\u00a0<\/span><\/h3>\n

A company operates under a registered business name. The law prescribes rules for the business name and if legal conditions are not met, the application will be rejected.<\/span>\u00a0<\/span><\/p>\n

The business name consists of the name, legal form, and the location of the company’s headquarters. The name is the characteristic part of the business name that distinguishes it from other companies; that is, it is the name you choose that represents your company and brand, and the full business name consists of the chosen name, the legal form you have chosen (LLC – limited liability company, GP – general partnership, LP – limited partnership, JSC – joint-stock company), and the location of the headquarters.<\/span>\u00a0<\/span><\/p>\n

There are restrictions on choosing a business name – it must not be misleading regarding the legal form of the company or its predominant activity, and it must not offend morality.<\/span>\u00a0<\/span><\/p>\n

The business name is in the Serbian language, in Cyrillic or Latin script. If you choose, for example, the Latin script in the founding act, the same script must be used for the business name in the registration application. Furthermore, the name can be in a foreign language or contain individual foreign words in the Latin script, Arabic or Roman numerals, and special characters. Therefore, the name can contain these elements, but not the entire business name.<\/span>\u00a0<\/span><\/p>\n

One of the most important things when choosing a business name is that the name must not be identical to the name of another company. The registrar checks whether, at the time of registration, there is already a company with the same or similar name or if the name is reserved. If they find that there is the same or similar name, the application will be rejected. Even if, for example, the name is spelled differently but pronounced the same, it can be determined that the name is similar and lead to the rejection of the application.<\/span>\u00a0<\/span><\/p>\n

Can I reserve a name?<\/span><\/span>\u00a0<\/span><\/h4>\n

Sometimes there is a need to reserve a desired name. As mentioned above, the name is linked to the company’s brand. If your choice is available (you have searched the register and found that there is no same or similar name), you can reserve the name. This way, you know that at the time of company registration, that name will surely be yours.<\/span>\u00a0<\/span><\/p>\n

The right to reserve a name is prescribed by Articles 39 and 40 of the Law on Registration Procedure at the Agency for Business Registers; the reservation is initiated by submitting an application with proof of payment of the reservation fee. The name is reserved for 60 days from the date of publication and can be renewed for an additional 60 days.<\/span>\u00a0<\/span><\/p>\n

Company headquarters<\/span><\/span>\u00a0<\/span><\/h3>\n

The company’s headquarters is the place and address in Serbia from which the company’s business is managed and is determined by the founding act, statute, or the decision of the assembly\/partners\/general partners. The address includes the city, municipality, settlement, street or square, house number, floor, and apartment number and is recorded in the registration application and founding act (for LLCs).<\/span>\u00a0<\/span><\/p>\n

Make sure that you really have the right to use a space as the headquarters address because the Law on Companies allows an interested party to file a lawsuit with the competent court to request the deletion of the registered headquarters address if the person who has property rights did not allow the use of the space.<\/span>\u00a0<\/span><\/p>\n

Delivery is made to the address you have chosen as the company’s headquarters. The law allows you to have a separate address for receiving mail in Serbia, which you also register.<\/span>\u00a0<\/span><\/p>\n

Furthermore, you must provide an email address for receiving electronic mail, which is registered, and register as a user of e-government services.<\/span>\u00a0<\/span><\/p>\n

Document preparation<\/span><\/span>\u00a0<\/span><\/h3>\n

If you are starting a company, you need to prepare the founding act and the registration application. As an example, we will mention the founding act of an LLC. If an LLC is founded by a single person, the memorandum of association takes the form of a decision of incorporation, and if it is founded by two or more people, it is called the agreement on association. A joint-stock company, in addition to the memorandum,\u00a0also has articles of association.<\/span>\u00a0<\/span><\/p>\n

Although various templates are available on the internet, we suggest caution. The founding act should be tailored to your company and needs as well as follow legal changes.<\/span>\u00a0<\/span><\/p>\n

The Companies Act\u00a0prescribes mandatory elements of the memorandum of association. Thus, it is mandatory that the founding act of an LLC contains information about the members of the company (including their place of residence), business name and headquarters, main activity, total amount of capital, amount of cash contribution and\/or description of non-cash contribution of each member, determination of bodies and their competencies, each member’s share in the capital expressed as a percentage, and the time of payment or contribution to the capital.<\/span>\u00a0<\/span><\/p>\n

When a company is founded, the signatures on the founding act are certified, and the certification of signatures can be replaced by a qualified electronic signature of the company’s members, unless it is contrary to the regulations governing the trade of real estate.<\/span>\u00a0<\/span><\/p>\n

Therefore, the Law on Companies prescribes the mandatory elements that the founding act must have. If everything is properly entered in the founding act (decision or agreement) and if there are no other obstacles, the registration should go smoothly. Beyond these mandatory elements, there is freedom of contracting in accordance with our legislation, so the relations of members and the functioning of the company can be individualized as long as it is within legal regulations.<\/span>\u00a0<\/span><\/p>\n

Note: This text does not constitute legal advice, but rather the personal opinion of the author.\u00a0<\/em><\/p>\n

\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Embarking on your own business venture is an exciting process, but many questions arise when starting the formal registration process.\u00a0 To ease this process for you, in this article you will find an explanation of several preparatory steps. 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