Latest Changes In Liquidation of Companies in Serbia

SHORTENED PROCEDURE OF COMPULSORY LIQUIDATION IN APPLICATION FROM 1 JUNE 2022

 

The latest amendments to the Law on Companies (“Official Gazette of the RS”, No. 36/2011, 99/2011, 83/2014 – other law, 5/2015, 44/2018, 95/2018, 91/2019, and 109 / 2021, the “Law“), have amended the provisions relating to compulsory liquidation.

 

In the first place, two more reasons have been added for initiating the procedure of compulsory liquidation of a company:

 

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

 

  1. the company does not register a new registered office address within 30 days from the day of the finality of the act of the competent authority rejecting the application for registration of a change of registered office address;

 

As the question of whether bankruptcy proceedings could be initiated against a company in compulsory liquidation due to the impossibility of settling debts to creditors, this legal gap was resolved by adding a new article that answers the question.

 

If a previous bankruptcy procedure is opened during the compulsory liquidation procedure – the compulsory liquidation procedure is terminated, and if after that the proposal for initiating bankruptcy procedure is rejected, i.e. the procedure is suspended due to withdrawal of the proposal for initiating bankruptcy procedure, the compulsory liquidation procedure continues. Also, if bankruptcy proceedings are opened during the compulsory liquidation procedure – the compulsory liquidation procedure is suspended.

 

The shortened compulsory liquidation procedure will be applied from the beginning of June this year.

 

If according to the Law, there are reasons for initiating this procedure, the companies will not be given a period of 90 days to eliminate these reasons and avoid compulsory liquidation, but they will cease to exist in a relatively short period of time.

 

The possibility for the members of the company to agree on the division of the property of the company remaining in the procedure of compulsory liquidation was abolished, as well as the possibility to request that the court arrange the transfer of the property. All that remains is a solution that stipulates that members or shareholders, according to the Law itself, acquire the company’s property in proportion to the size of their shares.

 

However, there are still many doubts, such as situations that have not been resolved when the company’s assets include indivisible rights (claim to deliver something, pledge rights, etc.).

 

It remains to be seen how a shortened compulsory liquidation procedure will be implemented in practice.