10. Nov 2017
The compulsory liquidation is rather new legal institute in Serbian legislation, firstly established as such in the Companies Act passed in 2011 (“Off. Gazette of the Republic of Serbia”, no. 36/2011, 99/2011, 83/2014 – state law and 5/2015) (hereinafter: the Law). However, as the Ministry of Economy and Regional Development in its elaboration no. 011-00-163/2012-06 from 8 June 2012, by the request of the Serbian Business Register Agency, determined that there is a need of postponing the implementation of the provisions of Law which refer to the compulsory liquidation, until the amendments to the Law which will regulate the procedure of compulsory liquidation in more detail are adopted, all for the purpose of legal security, therefore the implementation of the subject provisions after the passing of the Law had been postponed.
As the recent amendments of the Law were announced to the public, the Serbian Business Register Agency issued an announcement on 20 October 2017, that as of that date, it will start with procedures of compulsory liquidation over the companies which fulfil the conditions prescribed by Articles 546 and 547 of the Law.
The provisions of the Articles 546 – 548 of the Law regulate the following issues:
- reasons for the initiation of the procedure,
- the initiation of the procedure,
- the possibility of opening a bankruptcy procedure over the company in the procedure of a compulsory liquidation,
- the termination of a compulsory liquidation, or the company’s deletion from the register, and
- legal consequences of the company’s deletion from the register, due to liquidation procedure.
The reasons for the compulsory liquidation procedure initiation are prescribed by the Article 546 of the Law, while the Article 547 of the stated Law prescribes that the procedure is being initiated ex officio by the registrar who is in charge of the business registers agency, in case the conditions prescribed by the Article 546 are fulfilled. In accordance with the aforementioned, the Business Registers Agency ex officio transfers the company’s status into “in compulsory liquidation” and at the same time publishes an announcement about it on the website of the Serbian Business Registers Agency, in the continuous duration of 6 months. Some of the reasons for the company’s entry into the status of a compulsory liquidation are the nonexistence of a registered legal representative of the company, nullity of the founding act, or nullity of registration established by a final court decision, as well as the non-compliance of the company with the provisions of the Law.
If one of the bankruptcy reasons is fulfilled according to the Law on Bankruptcy (“Off. Gazette of the Republic of Serbia”, no. 104/2009, 99/2011 – state law, 71/2012 – decision of the Constitutional Court and 83/2014), the bankruptcy procedure may be initiated over the company in compulsory liquidation.
If the Registry does not receive the decision of the competent court on the commencement of a bankruptcy procedure within one year from the date of the announcement about the compulsory liquidation, or if a company in the status of compulsory liquidation does not eliminate the reasons due to which it is in such a status, the registrar ex officio deletes the company from the register.
Having in mind all the abovementioned, it may be concluded that the aim of implementation of the compulsory liquidation institute is that all companies in the Republic of Serbia should perform their business activities in accordance with legal provisions, which will in future ensure and strengthen the lawful business operations in Serbian economy.