On 8 June 2018 the Serbian Parliament has adopted the Law on Amendments and Supplements to the Law on Companies, published in the Official Gazette of the Republic of Serbia no. 44/18.
One of the top priorities of the recently adopted law is the harmonization with the Directive 2005/56/EC on Cross - Border Mergers of Limited Liability Companies, creating legal ground for establishments of Societas Europaea and European Interest Groups in line with the Regulation 2001/2157/EC on the Statute for a European Company and Council Regulation 1985/2137/EEC on the European Economic Interest Group. Relevant articles of the Law governing those topics will become applicable as of 1 January 2022.
In addition to the harmonization with EU regulations, legislators have introduced many changes with the aim of eliminating certain market inefficiencies. Some of the changes impacting joint stock companies that will be applicable as of 1 October 2018 include:
- Issuers will be obliged to announce notifications on shareholder meetings also on the CSD website;
- In addition to the call for shareholder meetings, issuers are obliged to deliver notifications on the decisions that are treated as disposal of high asset values;
- Shareholders (acting alone or jointly) owning at least 5% of shares are allowed to propose different decisions to be made to the initial agenda points, with explanations;
- Once the decision on cash dividend payment has been adopted, dividend has to be paid within a period of 6 months;
- Clarification regarding what is considered to be a disposal of high asset values;
- Squeeze out is to be performed irrespective of the liens, pledges or similar third party rights on the shares that are subject to squeeze out. Upon settlement of the squeeze out, the new shareholder becomes the owner of the shares without any third party rights assigned to them;
- Changed methods for the calculation of shares market values relevant for dissenting shareholders.
Impact on Investors: As of 1 October 2018 changes to the Law on Companies, aimed at improving overall investor environment by introducing deadlines for payments of dividends, increasing transparency related to shareholder meetings, strengthening the rights of shareholders, including the ones of dissenting shareholders, will be applicable. Furthermore, as of 1 January 2022, cross border mergers of limited liability companies and establishments of Societas Europaea and European Interest Groups will be possible.