Grounds for Compulsory Liquidation

The Serbian Business Registers Agency (SBRA) initiates the compulsory liquidation procedure when it determines the existence of any of the following grounds:

• the company has not had a registered legal representative for more than 90 days;
• the company’s term of duration has expired and has not been extended;
• the company has no registered seat;
• the company has failed to align its operations with the law;
• a court has declared the company’s founding act null and void;
• the company has not submitted its financial statements in accordance with the law;
• or in other cases prescribed by law.

 Course of the Procedure

The procedure is initiated by an SBRA decision, which is published on the Agency’s official website. From that date, the company obtains the status “in compulsory liquidation”, which is entered into the register.

The company is given a 90-day period to eliminate the reason that led to the initiation of the procedure (for example, by appointing a representative, registering a seat, submitting financial statements, etc.). If the company fails to do so within the prescribed period, the SBRA issues a decision to delete the company from the register.

Legal Consequences

Upon deletion from the register, the company ceases to exist as a legal entity, and any remaining assets after the settlement of liabilities are transferred to the company’s founders, in proportion to their ownership interests.

In certain cases, liability for the company’s obligations may be extended to members or legal representatives, particularly if their actions or omissions caused harm to creditors.

Conclusion

Compulsory liquidation aims to ensure legal certainty and integrity of the business environment by removing inactive, fictitious, or non-compliant entities from legal circulation. Therefore, it is essential for companies to regularly fulfill their legal obligations — especially those related to registration, appointment of representatives, and submission of financial statements — in order to avoid the initiation of this procedure.

Contact

For any additional questions regarding compulsory liquidation of a company, or if you wish to prevent the legal consequences of liquidation, you can contact us at office@iliclegal.rs or by phone at +381 64 236 08 79.