Preparation of Founding Act – The First Step to Form a Company in Serbia
Dec 10, 2022
Dec 10, 2022
A founding act is the first and the most important document you need to have if you want to open a company in Serbia as an LLC.
A bank account, registration to the Tax Administration, mandatory social insurance, and all the other steps come after. A draft of a founding act is the first step when starting a company, i.e., an LLC.
There have to be certain general legal acts when starting a company. One of them is the Founding Act, which represents a contract about the starting of a company.
A limited liability company in Serbia can be a single-member or a multi-member, i.e., one or more founders could start it. When establishing a company in Serbia, the following documentation should be attached:
A founding act is a general legal act of a business company that is made while establishing a company and is made by one or more founders of the said company. It regulates the management of a company and all other issues of importance for business.
If one person establishes an LLC, it’s called a single-member company; if two or more people founded it, it’s called a multi-member company. Therefore, the Founding Act has two forms, depending on the number of founders.
The founding act is done as follows:
It’s important to emphasize that the founding act could exist in a written form or as an electronic document.
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A founding act of a business company should contain: the following
We will describe the process of making a founding act in the following pages, but we recommend consulting with a bookkeeping agency for help with preparation.
1. Information about company members: Founders and company members could be individuals and legal entities. For individuals, basic data is included: full name, personal identity number, and the address of residence (for every individual). Legal entities should include a business name, company registration and tax identification numbers, and company headquarters.
2. Business name and headquarter: The company’s founding act contains the business name and the headquarters. Mandatory data include name, legal form, address, and headquarters location. Also, it must be written in Cyrillic or Latin. A company with a short business name could also be included in the founding act. A short business name only includes the legal form’s name and label.
3. Business activity: Following the classification of the company activity, the company is required to submit its desired field of activity in the founding act. It contains four digits – the code and the name of the activity.
4. The total amount of company capital: The founding act of a company must include a registered part of total capital, which is: the total registered monetary amount and total registered non-monetary amount.
A minimal basic capital for a limited liability company is 100 dinars (less than one Euro). Therefore, the size of a member’s share in a company depends on the amount of his stake in the total capital.
5. Amount of monetary shareholding capital and non-monetary stake: For each founder, the amount, type, and value of the stake are stated separately. The monetary amount is stated if the money is given as a stake. If a non-cash stake is given, a description, type of stake, and its value are stated.
6. Time of payment of monetary stake or contributing a stake to the basic capital: If a stake is not paid, it has to be paid to the company account at least until the defined date. The deadline is the same for the non-stated non-monetary stake. The legal deadline for payment or stake entry is five years.
7. The members’ share: In the founding act, the share of every member is displayed in percentages.
8. Company’s body and jurisdiction: Every LLC founding act, whether a single-member or multi-member limited liability company, needs to have management bodies stated. Also, it is advisable to state their jurisdictions.
9. Legal representative: Another piece of information that should be included in the document is the legal representative’s name. It is the entity responsible for and representing the company. It is named as a CEO in the founding act, and his name, surname, address, and personal identification number are stated.
10. Duration and termination of an LLC: The Founding Act should contain information about the period of the founding of a company, whether it’s indefinite or a defined period. Also, it must state how the company ceases to exist and deletes itself from the Business Registry.
11. Other topics: It is recommended that the founding act contains additional elements for regulating issues important for establishing a company and business, shares transfer, purchase rights, and others. Also, it can contain total expenses for setting up a company, special benefits, business conditions, signing issues, and more.
The company’s founding act becomes effective only when it is signed by the founder and certified by the seal of the person authorized to verify the signatures, manuscripts, and transcripts (the notary). Therefore, all founders must sign the founding act and consent to its contents, verifying it with the notary.
In the case of an electronic document, a personal signature may replace a qualified electronic signature. The notary should also affirm the signature verification form for the legal representative (OP form), which is submitted to the bank to open a business account.
The founding act of an LLC may be changed by a decision of the shareholders’ general meeting, and members must vote on the decision. In other words, the company’s founding act can be changed only by voting and if most voters agree with it.
Another important thing is that all changes to the founding act must be registered with the Business Registers Agency. After each change, the clarified text of the founding act is drawn up and then sent to the business register to record the change.
The founding act may be void in the following cases:
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