Limited Liability Companies (LLC) and Joint-Stock Companies are the most popular business entities that entrepreneurs elect to form in Montenegro. While there are other types of companies on offer, LLCs and Joint-Stock Companies carry significant benefits for foreign investors.
LLCs and Joint-Stock Companies only require one shareholder to establish with the upper limit for an LLC being 30 shareholders. The founding members of an LLC can also be the shareholders and directors of the company. There are countless benefits that come with setting up an LLC or a Joint-Stock Company in Montenegro. The setup and establishment of an LLC are usually faster, cheaper and easier than that of a Joint-Stock Company.
The share capital requirement for an LLC in Montenegro is €1. This makes it affordable to start up a smaller LLC in Montenegro while benefiting from the minimal risks attached to company formation and company liquidation that LLCs offer.
Limited Liability Companies (LLC) are business entities that are established in order to protect the business owners and members of the business. The members of the company are protected because no one is personally liable for the debts and liabilities of the company. Every individual is only liable for his/her share capital and not a cent more.
Joint-Stock Companies are similar to LLCs because they share a lot of the same attributes such as limited liability with only one shareholder required in order to establish the company. However, the minimum share capital required of the shareholders of a Joint-Stock Company is €25 000. Joint-Stock Companies are designed for larger businesses. While the minimum share capital is much higher than that of an LLC, the members of the business can still benefit from not being liable for more than the share capital they contribute should the company be liquidated.
To summarize, limited liability means that the personal assets of the members of the company are protected under the LLC and Joint-Stock Companies. In other cases, when a company which is not an LLC or Joint-Stock Company goes into debt, the government will be able to recover this debt by claiming the personal assets of the business members such as their houses, cars, and other valuable assets to the value of the debts and liabilities owed if the company is liquidized. Under an LLC or Joint-Stock Company, however, the government can only access the share capital contribution of the company members in the case of company liquidation.
This ensures that there is less of a risk to the founders and the shareholders of the company. The requirement to sign one’s house, car, or other valuable items over as collateral is a key determining factor as to whether or not one would be willing to branch out and accept the risk of forming a company in a foreign jurisdiction.
A country like Montenegro, which is working hard to attract and retain foreign investors, knows that safety is an important factor that business owners will take into account when considering the countless locations they can invest their money. Therefore, Limited Liability Company formation is one of the best options that Montenegro could offer to potential investors. Joint-Stock Companies are an excellent choice for larger companies looking to set up in Montenegro. There is something for every entrepreneur in Montenegro.
Montenegro offers company formation and operation with minimal risk to the up-and-coming entrepreneur and the well-established businessman.