Business Registration in Montenegro.
Have you decided to start your own business in Montenegro?
First of all you should decide what form of business is the best for your business idea.
Montenegrin legislation provides business in the following legal forms:
- Individual entrepreneur
- Simple partnership
- Limited partnership
- Limited Liability Company
- Open Joint Stock Company
- Joint-Stock Company
- A branch of a foreign company.
The most popular legal form of business in Montenegro is a limited liability company or DOO (Drustvo sa ogranicenom odgovornoscu).
For small and medium businesses the optimal form of conducting business in Montenegro is "individual entrepreneur."
In order to clearly demonstrate the differences between two types of business activity let’s examine pros and cons of two most common legal forms - individual entrepreneur and limited liability company.
1. Simplified registration as an individual entrepreneur.
2. The ability to use the simplified system of taxation.
3. Exemption from the obligation to maintain accounting.
4. Cost of registration is minimal.
5. Profit from the business activity is owned by an entrepreneur, and he/she can use it immediately.
1. An entrepreneur is liable for his/her obligations with all his/her personal property.
2. There are some restrictions for the certain activities of individual entrepreneur.
3. Credit limitations.
4. The obligation to pay fixed contributions to extra-budgetary funds, regardless of whether an entrepreneur conducts activity.
5. The lack of opportunity to sell the business.
6. The law of the Republic of Montenegro "About Insurance of Deposits" does not apply to an entrepreneur, if such an account was opened for business purposes.
Limited Liability Company (DOO).
1. Responsibility for DOO obligations is limited to the amount of its contribution to the authorized capital. Company participants do not risk their personal property.
2. DOO party may leave the company at any time without the consent of other participants.
3. DOO can be sold or bought.
4. DOO pays insurance contributions to extra-budgetary funds, the amount of which depends on the profits earned in the reporting period.
1. A more complicated registration procedure requires a large number of documents to be provided during registration.
2. DOO is required to have the bank account, and the seal.
3. DOO is obliged to keep accounting and submit accounting reports.
4. Penalties for administrative violations in sphere of business activity are at times more for legal entities than for an entrepreneur.
Thus, for the development and maintenance of a large businesses with serious intentions DOO has a significant advantage over the IE. In the form of DOO there is capacity for further growth, which does not exist in the form of an individual entrepreneur. Unlike IE registration, the registration of DOO provides more opportunities for business development and founders revenue growth in the form of profit share at a substantially smaller property and reputational risks.
To enter a new level and scale of economic activity IE is forced to reorganize and to form a legal entity usually by registring DOO.
So, the choice is yours.
Steps to register a limited liability company (DOO):
1. Certification in the Principal Court of Montenegro (Osnovni Sud) of three copies of the Founders Agreement (Odluka).
2. Certification in the Central Court of Montenegro of passports photocopies of founders (osnivac), an authorized representative (ovlascenog lica) and General Director (izvrsnog direktora).
3. The transfer of the Founders Agreement and Statute (Statut), certified copies of passports of the founders and directors into the registry of the Industrial Court in Podgorica.
4. Receiving of confirmation of the company registration with registration number (Potvrda o registraciji) in the Central Register on the basis of the submitted documents, the completed form (obrazac za d.o.o.) and paid receipts to the part of Industrial Court and the Official Book of the Republic of Montenegro (Sluzbeni list RCG). Special reference number is given to every type of businesses.
5. After due time in the Official Book of the Republic of Montenegro in the section of companies foundation (Osnivanja) the confirmation of DOO registration is published. Afterwords in the "changes section" of the Official Book (Promjene) all the changes made to the DOO Charter are published, such as increasing of share capital.
6. Order of the main stamp and letterhead stamp.
7. Document registration with statistical authorities (zavod za statistiku), assigning the individual number to the enterprise (razvrstavanje po djelatnostima, preduzeca, poslovnih jedinica drugih oblika organizovanja). To obtain this document, it is necessary to fill out a form (obrazac za RJR-1), submit a copy of Confirmation of the company registration of CRIC (CRPS), have the stamp and paid receipt. The registration is made in the Industrial Court (Odsjek statistike stanovnistva zaposlenih, zarada i registara).
8. Certification of signatures authenticity of legal representative and persons authorized to sign bank documents.
9. Opening a bank account for the enterprise; for which it is necessary to provide the following documents:
- Originals and copies of the registration confirmation
- Documents from the statistical authorities
- Passport photocopies of the founders, the authorized persons, director, authorized persons signatures certified in the municipality
- Signed agreement with the bank for bank services
- Application for the opening of the company's account.
10. Acquiring the bank document confirming the account opening and account number (karton deponovanih potpisa).
11. Deposit to the account the amount corresponding to the registered capital of the enterprise.
12. Assigning the enterprise a location for the tax account and the tax office.
13. On the basis of the submitted documents with the tax inspection, obtaining the certification for company registration for PIB and PDV.
14. Sending the needed documents to the bank where the enterprise has an open account.
15. Signing of the lease agreement (Ugovor o zakupu) for an office (poslovni prostor) and its certification in the municipality or Court.
Required information from the office:
- Office must be located in a building with technical approvals, and meet the necessary sanitary and technical standards.
16. To obtain the municipal permission to use the office for its official opening it is necessary to provide the following documents:
- An official certified lease agreement for the office
- A certificate of the premise ownership from the part of its owner
- Authorization to use the office space, issued to the previous landlord to confirm that the room was previously used as an office
- The certification of company registration in Central Register of Legal Entities
- Documents confirming company registration in the local tax authorities
- Receipts confirming payments of state fees.
17. Getting permission for advertising installation.