SMP

TAKE A SEAT

Serbia

Typical legal form for start-ups

društvo sa ograničenom odgovornošću (d.o.o.)

Brief information

Serbian start-ups usually choose the legal form of d.o.o. It offers the advantages of a simple incorporation, a low minimum share capital of less than one euro (RSD 100) and different choices concerning the corporate governance.

A PE/VC Fund may, under certain conditions, supervise its investment through an observer seat. If a Supervisory Board has been established, participation in this is also possible.

One or more directors manage the d.o.o. A supervisory body is not mandatory. However, investors can be granted observer seat status by contract. The observer may attend meetings of the management but has no right to vote.
In addition, an optional Supervisory Board may be set up to monitor the management of the company and reserve the right to approve certain management decisions.

A PE/VC Fund may in principle accept an observer seat, whereby the contractual structure is decisive in the individual case. The observer may not exercise any influence on the management decisions.
If a Supervisory Board has been established, participation in this is also possible.
PE/VC Funds may not participate in the Management.

Other legal form

akcionarsko društvo (a.d.)

Brief information

The legal form of a.d. is unusual in the start-up sector. Conversion into an a.d. is usually only carried out in preparation for an IPO or in specially regulated economic sectors.

In a monistically structured a.d., the investment may, subject to certain contractual conditions, be supervised by granting an observer seat status.
In a dualistically structured a.d., a PE/VC Fund may participate in the Supervisory Board.

The a.d. can be organized monistically or dualistically. In the monistically structured a.d., a Board of Directors manages the company. It consists of executive and non-executive directors.
There is no separate supervisory body. However, investors can be granted an observer seat status by contract. The observer may attend meetings of the Board of Directors but has no voting rights.
In the dualistically structured a.d., the Supervisory Board monitors the Management Board.

A PE/VC Fund may in a monistically structured a.d. in principle accept an observer seat, whereby the contractual structure is decisive in the individual case. The observer must not exercise any influence on the management decisions.
PE/VC Funds may not participate in the Board of Directors.
In a dualistically structured a.d., a PE/VC Fund may participate in the Supervisory Board.

The information in our toolbox provides managers of private equity or venture capital funds with an initial overview of certain framework conditions in the respective country. It does not provide advice on the law of any country, neither does it substitute such advice. Before taking over a board seat in a portfolio company, it is at all times necessary to seek expert advice. Our team is happy to assist you with all questions at any time.

In collaboration with: Kinstellar

Sources: Wegen/Spahlinger/Barth, Gesellschaftsrecht des Auslands 2. EL Januar 2018