Srbijagas, Jugoimport SDPR, Post of Serbia and Another 20 Public Enterprises to Be Turned into JSC or LLC

The Official Gazette, the Post of Serbia, Srbijasume, Srbijagas, Jugoimport SDPR, are just some of the 23 public enterprises in total which will change their legal form in the coming period, turning into either a joint-stock company (JSC) or a limited-liability company (LLC), as envisaged by the new draft law which has been adopted by the Government of Serbia.

Although the draft law does not say which public enterprises these will be, by searching the data in the register of the Serbian Business Registers Agency, N1 has come up with a list consisting of 23 public enterprises.

State owner in 305 companies

A public enterprise will be turned into a for-profit corporation. A for-profit corporation, according to the explanation of the law, is a business entity with a legal form of a JSC or LLC in which the Republic of Serbia has the status of a member, that is, a shareholder with over 50% of the founding capital of the company, as well as a business entity in which the Republic of Serbia has a controlling stock on another basis.

According to the available data of the electronic register of the Business Registers Agency, as pointed out, “as of May 9, 2023, the Republic of Serbia has 305 business entities in its portfolio. Of these, 266 are active business entities, 22 of which are in the privatization process, whereas two are undergoing liquidation and 37 are in bankruptcy proceedings.”

When it comes to the organizational form of those companies, it is said that there is a total of 184 LLCs, 91 JSCs, 23 public enterprises and seven companies of other type.

The new law envisages that the public enterprise “changes the legal form into an LLC or a JSC.”

– When changing the legal form, the founding capital of the public enterprise is converted into stocks or shares, depending on the form of the business entity. When carrying out the change of the legal form, the legal subjectivity and the business entity of the public enterprise are kept, without liquidation, without the cessation of operations and without legal continuity disruptions, whereby the company keeps its identity in the legal and business senses. The government adopts the act on the criteria for choosing the legal form of the for-profit corporation into which the public enterprise is transformed – says the draft law.

These companies are obliged to submit to the Ministry of Economy a list of the immovable property over which they have the right of ownership, that is, the right of use, “no later than within three years of the date of the beginning of the implementation of this law.”

– At the proposition of the Ministry of Economy, the government decides on the immovable property over which the for-profit corporations have the right of use, in line with the law, and which will be transferred into the ownership of the for-profit corporation, after which the for-profit corporation will carry out the registration of the right of ownership – says the draft law.

At the proposition of the ministry, the government, no later than a year from the date of the beginning of the implementation of this law, will adopt the necessary acts for the changing of the legal form of a public enterprise into the form of a JSC or LLC.

Directors to take an exam

The draft law also envisages, as said, “the regulation of the issue of corporate management in line with the best international practice.”

– The draft law envisages for the professional development of the representative of the Republic of Serbia in the GM of the for-profit corporation, the person who performs the function of the director of the for-profit corporation, the person in the supervisory board of the for-profit corporation 100% owned by the Republic of Serbia, as well as every person which meets the conditions for being appointed in the organs of the for-profit corporation, to be carried out in line with the Program of Professional Development in the Field of Corporate Management, which is adopted by the minister of economy, and which consists of an educational part for taking the exam, which includes corporate management lectures, and a written exam in order to test the corporate management knowledge – says the analysis of the effects of the new law.

The deadline for passing the exam will be one year from the coming into effect of the law for the current directors and representatives of the state in the management, that is, one year from the date of appointment, if the law has already come into effect.

For the purpose of testing the corporate management knowledge, the taking of the exams, as an entrusted task, is organized and carried out by the Chamber of Commerce of Serbia (CCIS).

Part of the strategy

The explanation of the draft law reminds that, on June 24, 2021, the government adopted the Action Plan for 2021-2023 for the implementation of the Strategy of State Ownership and Management of Business Entity Owned by Serbia for 2021-2027, as a public policy document which is adopted for the purpose of the implementation of the goals of the strategy.

In line with the defined goals, activities and measures in said documents, the Draft Law on the Management of Business Entities Owned by the Republic of Serbia has been prepared.

Vlada Republike Srbije

Ministarstvo privrede Republike Srbije

Privredna komora Srbije

Službeni glasnik Beograd

JP Pošta Srbije Beograd

JP Srbijašume Beograd

JP Srbijagas Novi Sad

Jugoimport-SDPR Beograd

Agencija za privredne registre Beograd

SBRA

change of legal form of public enterprises

Strategy of State Ownership

Draft Law on Management of Business Entities