Types of companies in Montenegro

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The Law on Business Organizations (“Zakon o privrednim društvima”) defines all legal obligations of companies that conduct their business in Montenegro. The first thing you need to know when you are planning to start your business in this remarkable country is the type of company you want to form.
In this article, we are going to provide a detailed guide on types of companies defined by Montenegrin law, so you can choose the one that fits your needs and preferences best.
So, let’s get to the bottom of it!

Limited Liability Company (LLC/D.O.O)

Limited Liability Company is probably the most common type of business organization in Montenegro. It is the perfect legal type for small and medium-sized businesses. If you opt for an LLC in Montenegro, then you will be liable for the debts and obligations of the company to the extent of your capital contribution. Of course, it does not mean that you cannot be held responsible for your wrongdoings. In Montenegrin law, like in many other Western legal systems, there is the concept of “Piercing the corporate veil”. What this means is that in some exceptional cases, you might be held personally accountable for the actions of your company.
All in all, if you want to form an LLC in Montenegro, the first step is to get your company registered at the Central Registry (CRPS).

Individual Entrepreneur

In Montenegrin law, an Individual Entrepreneur is a person who engages in business activity alone. While it is not exactly a company, it is still important that we talk about this type of business! If you are planning to start conducting business in your name, the Montenegrin law will consider you to be an Individual Entrepreneur. You will be personally liable for any responsibilities you acquire by doing business. Additionally, you will also have to register at the Central Registry of Montenegro (“for statistical purposes” as the law states).

General Partnership (GP/“O.D”)

Two or more people who engage in a general partnership will be equally responsible to the full extent of their personal assets. The Montenegrin law will consider you to be in a General Partnership even if you do not register in the Central Registry of Montenegro. This type of organization is the most common in start-up businesses since it is the easiest to manage. LLC, Joint Stock Company, and a Limited partnership all have to register with a unique name in the Registry, and LLC and JSC are required to have a structured hierarchy (directors, managers, etc.).

Limited Partnership ( LP/”KD”)

A limited partnership consists of two different types of members: Limited partners and General partners. General partners are responsible for the obligations of their company with the entirety of their personal assets, while limited partners are only liable to the extent of their contributions. Of course, different roles are assigned in the company depending on the partnership type they hold. It can be quite complex, so our advice is to read up on the Montenegrin Law on Business Organizations (you can find it online in English).

Joint Stock Company (JSC/”AD”)

Members of Joint Stock Companies in Montenegro are called shareholders. The assets and the obligations of the company are completely separated from that of its members. The way these types of businesses operate is fairly complex, so it is important to read the law and consult with the business professionals in Montenegro before deciding to form this type of company.

Stevan. M

Stevan. M

Stevan is a Montenegro based writer and consultant

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