Law office Vesić Nikolić in the following text presents the basic characteristics of the liquidation procedure of companies on the territory of the Republic of Serbia, the conditions for initiation, the course of the procedure, as well as the consequences of the liquidation of the company.

The procedure itself is carried out on the basis of the Law on Business Companies ( hereinafter: Law ), as well as the Law on the Registration Procedure in the Agency for Business Registers.

Terms

Liquidation of the company can be carried out when the company has enough funds to settle all its obligations. It is initiated by the decision of the competent authority of the company, which is registered with the Agency for Economic Registers. On the day of registration of the decision on liquidation and publication of the announcement on the initiation of liquidation, in accordance with the law on registration, the procedure is considered to have started.

In the decision to initiate liquidation, the company appoints a liquidation administrator. With the appointment of the liquidation manager, all representatives of the company cease to have the right to represent the company. If the company does not appoint a liquidation administrator in the decision to initiate liquidation, all legal representatives of the company become liquidation administrators. The liquidation administrator represents the company in liquidation and is responsible for the legality of the company’s operations. The liquidation administrator is responsible for the damage he causes in the performance of his duties to company members and company creditors.

The announcement on the initiation of liquidation from Article 526 of the Law is published for 90 days on the website of the register of economic entities and contains in particular: 1) an invitation to creditors to report their claims; 2) the address of the headquarters of the company, i.e. the address for receiving mail from Article 20 of this law, to which creditors submit claim reports; 3) a warning that the creditors’ claims will be barred if the creditors do not report them no later than 30 days after the expiration of the advertisement period from paragraph 1 of this article.

Consequences of opening liquidation

After the initiation of the liquidation procedure, the business name of the company is changed by entering the mark in liquidation in accordance with the provisions of Article 22, paragraph 5 of the Law on Business Companies.

Within 30 days from the start of the liquidation, the liquidation manager prepares the initial liquidation balance sheet as an extraordinary financial report in accordance with the regulations governing accounting and auditing, and submits it to the partners, general partners, or the assembly for adoption within the same period. Failure to submit financial reports is an economic offense based on the law governing accounting.

The company is obliged to record all received claims reports, as well as claims from Article 534, paragraph 4 of the Law, in the list of reported claims and to compile a list of recognized and disputed claims. The company may, within 30 days from the date of receipt of the claim report, dispute the creditor’s claim, in which case it is mandatory to inform the creditor about it within the same period with an explanation of the claim dispute.

It is important to note that during the liquidation, the company can suspend the liquidation and continue with the business by the decision of the partners, general partners, or assembly.

Also, if it is determined from the initial liquidation balance sheet or the initial liquidation report that the assets of the company are not sufficient to settle all creditors’ claims (over-indebtedness), the liquidation manager is obliged to submit a proposal for the initiation of bankruptcy to the competent court within 15 days from the date of drawing up the initial liquidation balance sheet , that is, the initial liquidation report.

Completion of liquidation

The liquidation is terminated by making a decision on the termination of the liquidation from Article 540, paragraph 3 of the Law. Upon completion of the liquidation, the company is deleted from the register of economic entities in accordance with the law on registration, and in the case of a joint-stock company, the deletion is made after submitting a request to the Central Registry for the listing of financial instruments from the register. If the partners, general partners, or the assembly do not make a decision on the adoption of the documents from Article 540, paragraph 1, point. 2), 3) and 4) of this law within 60 days from the date of submission of those documents for adoption by the liquidation manager, that decision can be replaced by a written statement of the liquidation manager on non-acceptance of those documents.

Compulsory liquidation

In addition to voluntary liquidation procedure, the Law also provides for compulsory liquidation, regulated by Articles 546 – 548. Compulsory liquidation is initiated if:

1) a legally binding act imposed a measure on the company: (1) prohibiting the performance of activities, and the company does not start liquidation within 30 days from the date of legal force of that act; (2) bans on performing a registered activity, and the company does not register the deletion or change of that activity or does not start the liquidation within 30 days from the date of legal effect of that act; (3) revocation of a permit, license or approval for performing a registered activity, and the company does not register the deletion or change of that activity or does not start liquidation within 30 days from the date of legal effect of that act;

2) within 30 days from the day the company was founded, and the company does not register an extension of the company’s duration or does not start liquidation within that period;

3) the partnership, in the event of the death of a partner, remains with one partner, and none of the heirs of the deceased partner, in accordance with Article 119 of the Law, shall be entered in the register as a member of the partnership within three months from the date of the legally binding end of the probate procedure, i.e. the partnership remains with one partner for other reasons, and the missing member does not join the company within three months from the date of termination of the partnership status or the company does not change its legal form within that period or does not start liquidation withinthat period;

4) a limited partnership, in the event of the death of a general partner, remains without a general partner, and none of the heirs of the deceased general partner, in accordance with Article 137 of the Law, is entered in the register as a member of the partnership within three months from the date of the legally binding end of the probate proceedings, i.e. a limited partnership the company is left without a general partner or limited partner for other reasons, and the missing member does not join the company within three months from the date of termination of membership, or the company does not change its legal form or start liquidation within that time;

4a) if the buyer of the bankrupt debtor as a legal entity, in accordance with Article 45, paragraph 5 of the Law, does not pay the missing amount up to the amount of the minimum basic capital within six months from the date of suspension of the bankruptcy proceedings;

5) the nullity of the registration of the establishment of the company in accordance with the law on registration or the nullity of the founding deed of the company in accordance with Article 14 of the Law has been established by a final judgment;

6) the termination of the company was ordered by a final judgment in accordance with Art. 118, 138, 239 and 469 of the Law, and the company does not start liquidation within 30 days from the date of finality of the judgment;

7) the company remains without a legal or temporary representative, and does not register a new one within three months from the date of deletion of the legal or temporary representative from the register of business entities;

7a) the company, within 30 days from the date of finality of the act of the competent authority rejecting the application for registration of change of address of the headquarters, does not register the new address of the headquarters;

8) the company in liquidation is left without a liquidation administrator, and does not register a new one within three months from the date of deletion of the liquidation administrator from the register of economic entities;

9) the adopted initial liquidation report is not submitted to the register of business entities in accordance with Article 536, paragraph 6 of the Law; 10) the company fails to submit annual financial reports to the competent registry by the end of the previous business year for two consecutive business years preceding the year in which the financial reports are submitted;

11) the company fails to submit the initial liquidation balance to the competent registry in accordance with the law regulating accounting;

12) in other cases provided by law. Reasons for forced liquidation from Article 19 and Art. 27 and 28 of the Law and reasons from paragraph 1, item 1), 5), 6) and 10) of this article are reasons that cannot be eliminated.

Compulsory liquidation is carried out ex officio by the registrar. The company is given the opportunity to avoid deletion from the register if it corrects the deficiency within the prescribed period.

The consequence of forced liquidation is the deletion of the company from the register of business entities.

Sources: Law on Business Companies, Law on the registration procedure in the Agency for Business Registers, Rulebook on the contents of the register of business entities and documentation required for registration

Belgrade, 2022, June 30