Guide to Select Code of Activity of Newly Established Company in Serbia
Feb 24, 2019
Feb 24, 2019
Setting up a company implies an obligation that, when applying, you must register a company’s core activity or the activity practiced by the company. Choosing the core activity is obligatory for all the legal persons and entrepreneurs who do their business to make a profit and gain.
The core activity is also called the code of activity. Besides the core activity, there are secondary activities.
The company’s main activity is practiced the most, bringing significant profit. The secondary activities are other activities the company does for which there are no legal boundaries.
It is considered that the core activity is the one that brings the most considerable profit for the company during a calendar year. Therefore, it is not forbidden for a legal person to profit from secondary activities, but other secondary activities mustn’t bring more profit.
In practice, there is often a question of whether or not a company can practice more than one activity. The answer is – it can but under certain conditions. The Company’s law regulates this question.
A legal person can not practice activities with legal boundaries or activities and jobs listed in the regulation as forbidden. Besides, it is impossible to practice activities for which you need special permits or licenses, except in cases where you already possess them.
If a specific code of activity does not need a special permit from a state, authorities, ministry, or similar, the law does not prevent it from being practiced. However, if it does, then certain conditions must be met.
The company law in our country prescribes that every company is legally obliged to register core activity, and that is the activity that will be practiced. But, on the other hand, the Law does not forbid the company to do other activities independent of whether they are registered or not or defined and precise by the statute, the Memorandum of association, and similar.
Get in touch with us, and we will help you to register your firm in 5 working days.
When setting up a company, the code of activity is submitted to the Business register agency. All secondary activities must not be enlisted in the application (they do not have to be registered). In the Business Register Agency, you can only record one activity that will bring the most significant profit after registering the company.
The legal person is obliged to register only one activity, but they can do other activities. This means that it can do other activities for which no special permit is legally allowed.
When the limited liability company is set up, one or more founders decide on setting up the Memorandum of Association (MoA). The Memorandum of Association is significant for companies, especially for setting up a limited liability company in Serbia.
In the Memorandum of association, all the information and characteristics of the company are defined – a legal form, the name of the company, the main office, the founders, an activity, the company’s goals, and other things. The founders of the LLC dedicate special attention to defining the core activity because that is the company’s core activity from which it will make gains and profit.
The Memorandum of association must contain additional activities done by the LLC which are not legally forbidden. The founders alone decide whether or not to enlist the other activities. If they are described, there are no boundaries on the number of additional activities.
The government of the Republic of Serbia issued the Regulation on the classification of activities which gives a detailed and precise definition of activities in our country. The regulation on the classification of activities is a sub-legal act that enlists all the activities which can be done by one legal person or all the activities the entrepreneurs or the LLC can do.
The activities are classified with this regulation according to the names, codes, descriptions, areas, or sectors they belong to. Every activity has its own:
The sectors of economic activities are:
After the company is registered in the BRA and records its core activity, it is impossible to re-register the activity. This means that the company can not attach the activity or add another activity to register an additional code.
One company can only register and have one core activity.
The entrepreneur and the LLC can demand a change of core activity or the existing code of activity and switch it with other core activities. The code activity can be changed when the additional activity becomes dominant or if the additional one starts to bring more profit.
The LLC can change its core activity with the founders’ consent at the board meeting. In that case, it is necessary to adopt the decision on the change of the Memorandum of Association and, after that, to submit the adopted change. This change must be submitted to the Business registers agency.
After recording the change, it is necessary to inform the Tax administration and the authorities. If the new code of activity represents the activity for which certain conditions must be met and special permissions, approvals or licenses are necessary. It is obligatory to submit the documentation to the authorities.