On 20 October 2017, Serbian Business Registry Agency (the “SBRA”) initiated a nationwide process of statutory winding-up of all companies which operate and exist contrary to the Serbian Companies Act (the “Act”).
Specifically, the Act enumerates 11 key reasons for an ex officio initiation of wind-up proceedings which include, inter alia, failure of a company to (i) appoint an authorized representative within 3 months as of the date it has dismissed the previous one, (ii) maintain its basic capital in accordance with the limits set out in the Act, (iii) provide to the SBRA financial statements of the company for the previous year by the end of the following year. Although the Act has been in force since 2014, the SBRA has only now started enforcing these provisions and issues over 1,000 decisions on a daily basis which result in initiation of wind-up proceedings of various companies.
The implication of statutory wind-up proceedings is quite straight forward – all creditors of any such company have a 6-month period (starting from the date the SBRA announced the winding-up of a company on its internet website) to initiate bankruptcy proceedings against the company in order to collect their due, but unpaid receivables. If the SBRA does not receive a notification from the court that bankruptcy proceedings have been initiated against any such company within 1 year from the date it has announced the winding-up thereof, it will remove the company from the companies’ registry.
Therefore, it is highly advisable that all creditors (especially ones having non-performing loans towards Serbian companies) keep their eyes wide open and track the SBRA’s notice board continuously as to avoid losing the opportunity to collect their due, but unpaid receivables.
By Milan Samardzic, Partner, and Igor Radovanovic, Senior Associate, Samardzic, Oreski & Grbovic