Business law is the foundation of every successful business activity as it provides the legal framework that regulates relations between companies and ensures market stability. Through clearly defined rules, business law provides security to both companies and their business partners, which is crucial for achieving long-term success.
What is Business Law?
Business law is a branch of law that regulates relationships between companies, as well as relationships arising in connection with carrying out business activities. It is a specific legal area that prescribes rules governing the relationships between companies, commercial contracts, securities, banking contracts, competition protection, and other legal relations within a market economy.
Business law, or corporate law, is predominantly a part of private law, but due to the state’s involvement in regulating the market and protecting the public interest, it can also be seen as a branch of law with elements of public law. In practice, its mixed character enables a balance between private freedom of action and the protection of the general interest.
What are the Forms of Organizing Companies?
The organization of companies in Serbia is regulated by the Law on Business Companies, which provides several legal forms of operation. Each legal form has its specifics, advantages, and obligations, and the choice of the appropriate form depends on business goals, company size, and the level of risk owners are willing to take.
The most common forms of organizing companies are:
- Limited Liability Company (LLC): Suitable for small and medium-sized businesses. Members are only responsible up to the amount of their contribution, making it a popular choice.
- Joint Stock Company (JSC): Intended for larger companies wishing to raise capital by issuing shares. It can be public or private.
- Partnership: Established through an agreement between two or more persons who jointly bear responsibility for the company’s obligations.
- Limited Partnership: Combines features of a partnership and a limited liability company. Limited partners invest capital, while general partners manage the company and bear full responsibility.
- Entrepreneurs (PR): Intended for individuals who want to start their own business with simpler administration and lower establishment costs.
With the support of a business lawyer, the process of choosing a legal form becomes easier as the lawyer can analyze specific business goals and suggest the best option in accordance with legal requirements. Additionally, the lawyer can assist in preparing founding documentation and registering the company with the Agency for Business Registers, ensuring legal certainty from the outset of the business.
Establishing and Managing Companies
The establishment of a company requires careful planning and understanding of the legal steps that ensure lawful and efficient operation. With the support of a business law expert, establishing a company becomes simpler and safer, ensuring compliance with all legal requirements.
The first step in establishing a business entity is choosing the legal form, which depends on business goals and company size. A business lawyer can help you choose the most suitable legal form for your business, taking into account your specific business objectives.
Key obligations include registering the company with The Serbian Business Registers Agency (SBRA), preparing the founding document, depositing the founding capital, and obtaining the necessary permits for the specific activity.
Managing companies requires establishing governing bodies such as the assembly, board of directors, or CEO in accordance with the Law on Business Companies. It is also important for the company to keep business records and submit annual financial reports to ensure transparency and compliance with legal regulations.
Our law firm supports clients at every step of establishing and managing companies, from legal advice on selecting the legal form to preparing documentation and ensuring compliance with laws. This allows our clients to focus on growing and developing their business while the legal aspects remain in the hands of experts.
How Are Status Changes in companies Implemented?
Status changes in companies, such as mergers, acquisitions, changes in legal form, or company splits, represent complex processes involving legal, organizational, and financial aspects. These changes are carried out in accordance with the Law on Business Companies and require careful preparation and coordination. The process usually begins with a decision made by the competent authority of the companies, such as the assembly of members or shareholders, followed by the preparation of documentation that includes a plan for the status change, merger or acquisition agreements, and amendments to the founding documents. After that, the status change is reported to the Agency for Business Registers (APR) for official registration. With the support of a business lawyer, the process of status changes becomes safer and more efficient. The lawyer provides expert assistance in preparing documentation, interpreting legal obligations, and representing the client before relevant institutions. In this way, legal risks are minimized, and clients’ interests are fully protected throughout the entire process.
Status Changes and Reorganizations
Changes in legal forms, mergers, acquisitions, and reorganizations of companies represent complex legal processes that require a thorough understanding of legal regulations and practical application of law. With the support of a business lawyer, these processes can be carried out efficiently while minimizing legal and financial risks. A business lawyer provides assistance in preparing documentation, interpreting legal requirements, and representing clients before competent institutions. In addition, legal support ensures that all changes comply with the law, avoiding potential legal problems that could jeopardize the business.
It can be said that a specific area of business law is “Corporate Law.” This is a branch of law dealing with companies (Limited Liability Companies, Joint Stock Companies, Limited Partnerships, Partnerships) and entrepreneurs, specifically concerning issues related to the establishment, organization, and operation of companies; status changes; changes in legal form; and the dissolution of companies (deletion, forced liquidation, voluntary liquidation, bankruptcy). Corporate law was the subject of a separate text addressed by our legal team, so if you are interested in learning more about the topic of “corporate law,” additional information can be found by clicking on the following link.
As previously mentioned, business law in a broader context includes corporate law, while in a narrower sense, business law primarily deals with contracts in commerce, securities, banking contracts, and the operation of banks and other financial institutions.
Commercial Contracts
The general rules prescribed by the Law on Obligations also apply to commercial contracts, which are concluded between companies. According to these rules, such contracts can be verbal (it is sufficient to achieve agreement between the representatives of the companies on the essential elements of the legal transaction to establish an obligational legal relationship between them).
However, the complexity and dynamics of business operations often require that the parties define their mutual rights and obligations through written contracts. The conclusion of written contracts is recommended, especially due to the high likelihood of potential lawsuits between companies, which frequently occurs in practice. Commercial contracts most often relate to the trade of goods and the use of services, all aimed at achieving company profits. Contracts in business law have an obligational nature and are regulated by the Law on Obligations. There is a wide range of contracts that regulate business activities, both named and unnamed, with some of the most common being:
- Contract for the sale of goods,
- Transport contract,
- Construction contract,
- Brokerage contract,
- Shipping contract,
- Re-export contract,
- Storage contract, and others.
Bankruptcy and Liquidation
Bankruptcy and liquidation represent the final phases in the operation of companies, applied when the operation is no longer sustainable or when founders decide to cease operations. These processes are strictly regulated by the Law on Bankruptcy and the Law on Business Companies to protect the rights of creditors and employees and to ensure compliance with legal obligations by the companies.
Bankruptcy is implemented when a company becomes insolvent and is unable to meet its obligations. The goal of the bankruptcy procedure is the equal settlement of creditors and, if necessary, restructuring or selling the company’s assets. The process is initiated before the competent court, and the bankruptcy trustee leads the process under the supervision of the court. Liquidation, on the other hand, can be voluntary or forced. In the case of voluntary liquidation, the founders decide to terminate the company, and the procedure is carried out by settling all liabilities and distributing any remaining assets among the members. Forced liquidation is implemented when the company does not meet the legal conditions for continuing its operations.
With the support of a business lawyer, the bankruptcy or liquidation process can be carried out efficiently and in accordance with legal procedures. Business lawyers assist in preparing the necessary documentation, representing clients in court, and coordinating with creditors, ensuring legal security for all parties involved.
Our law firm takes pride in its extensive experience in drafting a wide range of contracts in the field of commerce, whether they are standard or specific contracts. With a deep understanding of business needs and the legal aspects of commercial activities, our team provides expert support during negotiations as well as in drafting contracts that are fully compliant with applicable laws and best serve our clients’ interests. Our legal team strives to ensure maximum security and protection of our clients’ rights through contracts, minimizing business risks. Our attention to detail and focus on achieving the best possible business outcomes make us a trusted partner that our clients can rely on.
Securities
Securities are written instruments in which the issuer commits to fulfilling the obligation stated on the document to its lawful holder. There are various types of securities, such as promissory notes, checks, shares, bonds, certificates, treasury bills, warehouse receipts, and negotiable bills of lading.
Certainly, one of the most significant and commonly used securities in our country is the promissory note. The law defines the promissory note as a written instrument in which one party orders another party to pay a specific sum of money to a third party, or to their order, at a specified time and place. The Law on Promissory Notes recognizes various types of promissory notes, such as drawn promissory notes and own promissory notes. It is important to note that promissory notes should not be given lightly, as they are documents on which enforcement procedures can be initiated.
Banking Transactions
Banking transactions, in accordance with the regulations of the Republic of Serbia, encompass all activities carried out by banks to provide financial services to customers. This includes receiving deposits, granting loans, managing payment transactions, and issuing guarantees and letters of credit. Banks are also involved in foreign exchange transactions, securities trading, providing payment services, and offering other financial services in accordance with the Law on Banks and other relevant regulations. Banks must operate in compliance with the regulatory requirements of the National Bank of Serbia, which aim to protect customer interests, preserve financial system stability, and prevent financial crime.
The most common banking transactions include: loan agreements, bank guarantees, safe deposit agreements, and monetary deposits, among others.
Our law firm offers comprehensive legal assistance to clients who wish to conclude banking contracts in accordance with the regulations of the Republic of Serbia. Whether dealing with loan agreements, deposits, guarantees, letters of credit, or other banking transactions, our legal team offers expert support at every step of the process. We provide professional legal assistance during negotiations, drafting, and reviewing contracts, ensuring that all terms comply with applicable legislation and that our clients’ rights are fully protected. With our experience and attention to detail, we enable secure and efficient conclusion of banking contracts, minimizing risks and ensuring business security.
Legal Services We Provide
- We provide oral and written legal advice,
- We regulate the legal relations of capital owners, amendments to founding documents, and members’ agreements,
- We draft complete status documentation for companies,
- We provide legal services for capital increases and decreases,
- We provide legal services for debt-to-equity conversions,
- We provide legal services for status changes of companies,
- We offer legal services in cases involving the rights of minority shareholders,
- We draft commercial and other contracts related to the client’s business, including active participation in negotiations with partners,
- We offer legal services in the context of employee relations,
- We advise clients on resolving business disputes with employees, and
- We assist with bankruptcy and liquidation procedures.
The choice of legal form depends on your business goals, the size of your company, and the level of risk you are willing to take. A limited liability company (LLC) is ideal for small and medium-sized businesses because it limits the owners’ liability to the amount of capital invested.
A sole entrepreneur is suitable for smaller businesses with simpler administration, but the owner bears unlimited liability for obligations. A joint-stock company (JSC) is best for larger companies that want to raise capital through the issuance of shares. With the support of a business lawyer, you can choose the legal form that best suits your needs and ensure the registration process is efficient.
The company registration process begins with preparing the founding act, defining the activities, and depositing the founding capital. After that, an application is submitted to the Business Registers Agency, along with supporting documentation. It is necessary to obtain a Tax Identification Number and, depending on the activity, possibly other permits. A lawyer can assist you in all stages, from preparing the documentation to completing the registration, to avoid mistakes and speed up the process.
Protection from unfair competition includes applying competition protection laws and confidentiality agreements. A lawyer can assist in identifying activities that harm your business, such as the misuse of trade secrets or defamatory practices by competitors. They can also prepare contracts that protect your interests and represent you before the relevant institutions in case of violations of legal rules.
In the case of insolvency, it is crucial to react quickly. A business lawyer can analyze your situation and suggest solutions such as debt restructuring, agreements with creditors, or initiating bankruptcy proceedings. Properly conducting the bankruptcy process ensures fair settlement of creditors and reduces legal consequences for you as the founder. Hiring a lawyer ensures the process is carried out according to the law and that your interests are protected.