Company liquidation in Montenegro is the cessation of business operations. The process is covered by the Law on Business Organization, the Law on Bankruptcy and Insolvency of Insurance Companies, the Business Organization Insolvency Law, and the Law on Bank Bankruptcy and Liquidation Proceedings. The law that governs will depend on the type of liquidation conducted and the kind of company liquidated. Our specialists in company formation in Montenegro can help you close your company.
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Types of company liquidation in Montenegro
If you decide to close a company in Montenegro, it is important to know that here are 2 different types of company liquidation:
- Voluntary liquidation: this decision is taken by the company members and it can only be initiated in the situation of no liabilities and when all the company debts can be paid from the assets.
- Compulsory liquidation: it is taken by the Court and the specialized authorities have the role to supervise the liquidated company.
Our team of experts can take care of this process regardless of the type of liquidation your company is going through.
| Quick Facts | |
|---|---|
| Applicable law(s) |
– Law on Bankruptcy and Insolvency of Insurance Companies, – Business Organization Insolvency Law, – Company Act, – Law on Bank Bankruptcy and Liquidation Proceedings. |
|
Conditions to liquidate a company |
– completion of activities on the Montenegrin market, – limited duration of the business as prescribed by the Articles of Association, – failing to comply with the Company Law, – inability to pay company debts. |
|
Types of procedures |
Voluntary and mandatory company liquidation can be completed in Montenegro. |
| Voluntary company liquidation | Voluntary winding up is possible when the decision is made by the shareholders. |
| Compulsory company liquidation |
Compulsory liquidation occurs from reasons such as bankruptcy. |
| Appointment of a liquidator in a voluntary procedure |
The liquidator is appointed during the Shareholders’ General Meeting. |
| Appointment of a liquidator in a mandatory procedure |
In this case, the liquidator is appointed by a judge of the Commercial Court. |
| Authorities to notify in case of liquidation |
– Trade Register, – tax authorities. |
| Requirement to notify other parties (YES/NO) |
Yes, all creditors must be notified on the company liquidation. |
| Notice requirements | 5 days from the decision. |
| Additional accounting requirements to comply with (if any) |
Yes, a final financial statement must be prepared and filed by the liquidator. |
| Company liquidation time frame (approx.) |
A few weeks for voluntary termination, a few years for judicial proceedings. |
| De-registration with the Tax Office in Montenegro required (YES/NO) |
Yes. |
| Trade Register deletion requirement (YES/NO) |
Yes, the company must be de-registered from the Companies House. |
| Company liquidation support (YES/NO) | Yes, you can rely on our Montenegrin company formation agents for support during the liquidation procedure. |
Steps to close a company in Montenegro
When it comes to company liquidation in Montenegro, there are some important steps to follow in this matter:
- Meeting of the shareholders where the decision of closing the business is voted;
- Signing the official liquidation notification with the Companies Register or Register of the Commercial Court, depending on the case;
- Organizing the appointment of the liquidator, who is usually one of the directors elected by the majority of the company members;
- Publishing the notification of liquidation in the official legal publisher of Montenegro, named the Official Gazette;
- Notifying the creditors regarding the decision to close a company in Montenegro;
- Creating a final financial statement of the company in order to pay all taxes and comply to all administrative procedures;
- Liquidating the assets of the business in order to finalize the remaining payments for creditors and other authorities involved;
- Filing for deletion of the company to the official authorities involved in this process.
Closing a company in Montenegro under the Law on Business Organization
Winding up a company in Montenegro is not as easy as opening one and it takes more time, but the process is not very complicated if you do not have outstanding debts and you paid the taxes required. Under the Law on Business Organization, a company may be liquidated voluntarily. Companies can conduct voluntary liquidation in Montenegro as long as the financial resources of the business exceed its debts. This means that the company is able to pay off all its debts using its existing assets. The articles of association must provide for voluntary liquidation after the happening of a specified event or after a certain number of years since the company was formed. The decision can also be made through a meeting of the shareholders.
Our experts in Montenegro company formation can guide you through this process.
Law on Bankruptcy and Insolvency of Insurance Companies in Montenegro
If you open a company in Montenegro engaged in the insurance business, the Law on Bankruptcy and Insolvency of Insurance Companies governs the liquidation process. Company liquidation in Montenegro for insurance companies is commenced when the Insurance Supervision Agency of Montenegro has assessed that the business is no longer improving and has not complied with the solvency requirement or has not performed all its obligations.
We are also at your disposal if you want to close a company in Montenegro that operates in another field. We also have an infographic on this subject below:
Montenegro Law on Bank Bankruptcy and Liquidation Proceedings
This law specifically governs the liquidation of banks in Montenegro. The body in charge of liquidating banks is the Central Bank of Montenegro. Before the actual liquidation process, the bank shall first be rehabilitated. This means that certain measures are imposed and adopted to try to save the bank from insolvency. If the bank is still unable to remain solvent after the rehabilitation process, liquidation commences. Similar insolvency procedures are available before winding up a company in Montenegro.
Business Organization Insolvency Law in Montenegro
If you open a Montenegro company and it does not gain as much profit as you hoped it would, you have the option of liquidating it. The process of winding up a company in Montenegro under the Business Organization Insolvency Law in Montenegro involves the jurisdiction of the courts. This usually happens when the company can no longer pay its debts. A petition has to be filed with the Commercial Court by either the debtor or the creditor.
Why close a company in Montenegro?
There are several reasons to terminate a company in Montenegro, such as:
- The bankruptcy of the company, which requires filing for company liquidation in the Court;
- The company’s exit from the market or the completion of its business activities in Montenegro;
- Shareholders disputes or misunderstandings;
- Shareholders common agreement;
- Reaching the end of the decided time-frame in the case of opening the company for a limited period.
Considering your motives, if you are planning to end company registration in Montenegro with a liquidation procedure, our experts team can support you through the deletion stages. Here is also a video on this subject:
Time frame of company liquidation in Montenegro
Depending on the type of liquidation and the complexity of the situation that the company encounters, company liquidation in Montenegro can last about:
- Shorter voluntary liquidation can take up to 7 days in the case of no liabilities left;
- If the company goes through bankruptcy, the process of liquidation cand take up to 60 days;
- In more complex cases, liquidation can take up to 1 year if there are claims that have no solution and the liquidation process goes to Court.
If you need assistance with company liquidation in Montenegro, please do not hesitate to contact us. Our experts in company formation in Montenegro have handled many liquidation cases.